Karachi, November 17, 2024 – The Federal Board of Revenue (FBR) has clarified the implications of Section 182A of the Income Tax Ordinance, 2001, emphasizing its importance for individuals and entities failing to file their income tax returns within the due date.
Section 182A targets non-filers, laying out penalties and restrictions for those who fail to submit their tax returns as required under Section 114 by the deadline specified in Section 118 or any extensions granted under Section 214A or Section 119.
According to the FBR, the primary consequences of non-compliance under Section 182A include:
1. Exclusion from the Active Taxpayers List (ATL): Non-filers will not be included in the ATL for the tax year in which they miss the deadline. However, they can be reinstated by filing the return late and paying a surcharge:
— Rs. 20,000 for companies
— Rs. 10,000 for associations of persons (AOPs)
— Rs. 1,000 for individuals
2. Forfeiture of Tax Benefits: Non-filers will lose the right to carry forward losses under Part VIII of Chapter IV for the relevant tax year.
3. Refund Restrictions: Refunds will not be issued to individuals or entities during the period they remain excluded from the ATL.
4. No Additional Payment for Delayed Refunds: Non-filers are not entitled to additional payments for delayed refunds under Section 171 during the period of exclusion from the ATL. The time spent outside the ATL will not be considered for calculating delayed refund payments.
These measures, which have been in place since Tax Year 2018, are designed to enforce compliance and encourage timely filing of tax returns. The first Active Taxpayers List incorporating these provisions was issued on March 1, 2019, as per the Income Tax Rules, 2002.
The FBR reiterated that timely filing of tax returns ensures inclusion in the ATL, offering benefits such as reduced withholding tax rates and expedited refunds. Section 182A serves as a critical mechanism to promote compliance and discourage tax evasion.
Taxpayers are urged to understand these provisions and file their returns promptly to avoid penalties and disruptions in tax-related benefits.
