FBR Grants Extension for Post-Deadline Tax Return Filing for Tax Year 2023

FBR Grants Extension for Post-Deadline Tax Return Filing for Tax Year 2023

Karachi, November 2, 2023 – In a move aimed at alleviating the concerns of taxpayers, the Federal Board of Revenue (FBR) has decided to allow post-deadline return filing for the tax year 2023.

However, those who file their returns after the original deadline are obligated to pay a fine, as confirmed by sources within the FBR.

The extended deadline for the submission of income tax returns for tax year 2023 lapsed on October 31, 2023. By the deadline, the FBR received a total of 2.9 million returns, significantly lower than the approximately 5 million returns filed during the preceding tax year.

This predicament has left a substantial number of taxpayers on the edge, as any severe action taken by the FBR could result in penalties and potential prosecution. Sources from within the FBR have stated that under the Income Tax Ordinance of 2001, taxpayers are permitted to achieve compliance by filing their returns and paying the required fines.

According to tax laws, in cases where an individual fails to furnish a return of income as mandated under section 114 within the due date, they shall be liable to pay a penalty.

This penalty is calculated as the higher of either 0.1% of the tax payable for each day of default or a fixed amount of rupees one thousand for each day of default.

However, it is important to note that the minimum penalty shall be rupees ten thousand in case of individuals with seventy-five percent or more of their income derived from salary. In all other cases, the minimum penalty shall be rupees fifty thousand.

Moreover, the maximum penalty shall not surpass two hundred percent of the tax payable by the individual for that particular tax year. Additionally, the amount of the penalty will be reduced by 75%, 50%, and 25% if the return is filed within one, two, or three months, respectively, after the due date or extended due date of return filing as specified by the law.

For clarification, the expression “tax payable” is defined as the tax chargeable on the taxable income based on the assessment made or treated to have been made under sections 120, 121, 122, or 122D of the tax law.

Taxpayers remain hopeful that tax authorities will consider extending the deadline by a day or two, especially given the considerable representations and appeals received by the FBR from stakeholders.

This decision to allow post-deadline return filing provides some relief to those who missed the initial deadline, allowing them to rectify their tax filing status by paying the prescribed penalties. However, it is essential for taxpayers to take this opportunity seriously and ensure their compliance with the tax laws to avoid further financial implications.