The Federal Board of Revenue (FBR) has clarified the provisions of Section 115 of the Income Tax Ordinance, 2001, shedding light on specific categories of individuals who are exempted from the requirement of filing a return of income under the tax law.
This information comes following the issuance of the updated Income Tax Ordinance, 2001, which incorporates amendments introduced through the Finance Act, 2021, up to June 30, 2021.
Section 115 of the Income Tax Ordinance, 2001, deals explicitly with persons who are not obligated to furnish a return of income for a tax year. The exemptions are outlined in subsection (3) of the said section, focusing on sub-clauses (iii), (iv), (v), and (vi) of clause (b) of subsection (1) of section 114. The specific categories of individuals exempted are as follows:
(a) A Widow: Widows are granted relief from the requirement to file a return of income, recognizing the unique challenges they may face. This exemption acknowledges the need to ease the administrative burden on this particular demographic.
(b) An Orphan Below the Age of Twenty-Five Years: Orphans, defined as individuals without living parents, who are below the age of twenty-five years, are also relieved from the obligation to submit a return of income. This provision is designed to extend support to vulnerable individuals during their early years.
(c) A Disabled Person: Persons with disabilities are included in the list of those exempted from filing returns. This recognizes the additional challenges and financial constraints that individuals with disabilities often encounter, providing them with a measure of relief from the tax return requirement.
(d) Non-Resident Person Owning Immovable Property: In the case of ownership of immovable property, a non-resident person is exempted from filing a return of income. This exemption is likely aimed at simplifying tax procedures for non-resident property owners, streamlining the process and reducing bureaucratic hurdles.
The clarification of Section 115 aims to ensure that the tax laws are sensitive to the diverse circumstances of individuals, offering relief to those facing specific challenges or situations. These exemptions are not only a recognition of the unique needs of certain groups but also contribute to a more inclusive and equitable tax framework.
It is essential for individuals falling within these exempt categories to be aware of their status and rights under the tax law. However, it is crucial to note that tax laws are subject to change, and individuals are advised to stay updated with the latest amendments and seek professional advice if needed. The FBR continues to work towards enhancing transparency and clarity in tax regulations for the benefit of all taxpayers.