Karachi, December 6, 2023 – The Federal Board of Revenue (FBR) in Pakistan has notified updated record-keeping requirements for businesses with an annual turnover of up to Rs 500,000.
The new guidelines were unveiled through an amendment to the Income Tax Rules, 2002, applicable for the tax year 2024.
According to Rule 30 of the Income Tax Rules, 2002, the FBR outlined specific record-keeping requirements for different categories of taxpayers falling under the “Income from business” category. These regulations are designed to ensure that businesses maintain accurate and comprehensive financial records.
For Taxpayers with Business Income up to Rs. 500,000 and New Taxpayers:
1. Serially numbered and dated cash memos, invoices, or receipts for each transaction of sale or receipt, including details such as the taxpayer’s name, business name, address, national tax number or CNIC, and sales tax registration number (if applicable).
2. Daily record of receipts, sales, payments, purchases, and expenses, with a single entry for each category on a daily basis.
3. Vouchers of purchases and expenses.
It’s worth noting that for transactions not exceeding Rs. 100, taxpayers have the flexibility to maintain one or more cash memos per day.
For Taxpayers with Business Income Exceeding Rs. 500,000 and Specific Business Categories (Wholesalers, Distributors, Dealers, and Commission Agents):
1. Similar requirements as for taxpayers with income up to Rs. 500,000, with additional details for transactions exceeding Rs. 10,000, including the name and address of the customer.
2. Cash book and/or bank book or a daily record of receipts, sales, payments, purchases, and expenses.
3. General ledger or an annual summary of financial activities under distinctive heads.
4. Vouchers of purchases and expenses, including the name and address of the payee for transactions exceeding Rs. 10,000.
5. Quarterly inventory of stock-in-trade for businesses dealing with the purchase and sale of goods.
For Professionals (Medical Practitioners, Legal Practitioners, Accountants, Auditors, Architects, Engineers, etc.):
1. Serially numbered and dated patient-slip, invoice, or receipt for each transaction, including details such as the taxpayer’s name, business or profession, address, national tax number or CNIC, and sales tax registration number (if applicable).
2. Daily appointment and engagement diary for clients and patients.
3. Daily record of receipts, sales, payments, purchases, and expenses, with a single entry for each category.
4. Vouchers of purchases and expenses.
For Manufacturers with Turnover Exceeding Rs. 2.5 Million:
1. Similar requirements as for taxpayers with income up to Rs. 500,000, with additional details for transactions exceeding Rs. 10,000, including the name and address of the customer.
2. Cash book and/or bank book.
3. Sales day book and sales ledger (where applicable).
4. Purchases day book and purchase ledger (where applicable).
5. General ledger.
6. Vouchers of purchases and expenses, including the name and address of the payee for transactions exceeding Rs. 10,000.
7. Stock register of stock-in-trade supported by gate inward and outward records and quarterly inventory of all items of stock-in-trade.
These record-keeping requirements are integral to promoting financial discipline and ensuring compliance with tax regulations. Businesses and professionals are urged to familiarize themselves with these guidelines and implement them to avoid any penalties or legal repercussions. The FBR’s initiative aligns with the broader goal of creating a more transparent and accountable business environment in Pakistan.
