Karachi, August 17, 2023 – The Federal Board of Revenue (FBR) has taken a significant step by outlining the categories of individuals who are required to file their annual income tax returns for the tax year 2023.
The FBR referred to Section 114 of the Income Tax Ordinance, 2001, which sets out the criteria for mandatory income tax return filing for this year.
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As per the guidelines outlined in Section 114:
Companies: Every company, regardless of its size or nature, is required to submit an annual income tax return.
Individuals with Taxable Income: Individuals (excluding companies) whose taxable income exceeds the maximum threshold not subject to taxation as per the Ordinance for the year are obligated to file their income tax return.
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Non-Profit Organizations: Non-profit organizations defined in clause (36) of section 2 are also included in the mandatory return filing category.
Final Taxation Subjects: Individuals whose income for the year is subject to final taxation under any provision of the Ordinance must also file an income tax return.
Other Individuals: Individuals not covered by the above categories are required to file if they meet any of the following criteria:
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Have been subjected to taxation in either of the two previous tax years.
Claim a carried forward loss as per the Ordinance.
Possess immovable property with an area of 500 square yards or more, or own flats in specific regions.
Own immovable property with an area of 500 square yards or more in a rating area.
Own flats with a covered area of 2000 square feet or more in a rating area.
Own vehicles with an engine capacity exceeding 1000CC.
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Hold a National Tax Number (NTN).
Hold a commercial or industrial electricity connection with an annual bill surpassing Rs. 500,000.
Are registered resident individuals with various professional bodies or associations.
Are resident individuals required to file foreign income and assets statements under section 116A.
Persons Notified by the Board: Individuals or groups of individuals designated by the Board with the Minister’s approval are also included in the mandatory return filing category.
Additional Criterion: Additionally, every individual whose ‘Income from Business’ ranges from Rs. 300,000 to Rs. 400,000 in a tax year is required to file their income tax return.
The FBR’s move aims to ensure greater transparency and compliance with tax regulations across various sectors of the economy. This step emphasizes the importance of accurately reporting income and contributing to the nation’s revenue collection efforts.
Disclaimer: The information is derived from the Income Tax Ordinance and is intended solely for educational purposes. It does not carry any legal obligations. Individuals are strongly advised to consult the Federal Board of Revenue (FBR) to determine their specific requirements for filing tax returns.
