ISLAMABAD: Federal Board of Revenue (FBR) may extend the date for filing income tax returns and wealth statements for tax year 2019 due to delay in issuance of return forms and considering problems faced by taxpayers in filing returns.
The last date for filing annual income tax returns is September 30, 2019 for salaried persons, business individuals, Association of Persons (AOPs) and companies having special financial year.
The FBR uploaded the draft return form for tax year 2019 on August 23, 2019 through SRO 951(I)/2019 and then issue the final notification of Income Tax return 2019 of Individuals, Salaried Individuals & AOPs, September 02, 2019 through SRO 979 of 2019.
This shows lapse of statuary period of two months (62 days) and it was all due to the negligence of the FBR, Pakistan Tax Bar Association (PTBA) said in a letter sent to FBR chairman on September 27, 2019.
The PTBA said that on September 27, 2019 FBR issued manual income tax return form vide SRO 1160 of 2019 dated 27th September which is still not available on Excel format, so the small volume taxpayers could file their returns of income for the year 2019 within stipulated time.
The tax bars in the country have pointed out discrepancies due to which the filing of income tax returns was seriously affected:
i. Return / Statement of Final Taxation for Individuals, Salaried Individuals and AOPs is forcibly accompanied with Wealth Statement, which is a separate requirement under Section 116 of the Income Tax Ordinance, 2001;
ii. Non-residents are not able to file their income tax return without Wealth Statement and details of personal expense which is not binding upon them as per statue;
iii. Tax return of a Salaried Individual still lacking certain details of assets/liabilities in Wealth Statement which is not in accordance with section 116 of the Ordinance;
iv. There is a single field/ column for foreign income only contrary to the requirements of section 103(8) read with section 104 of the Ordinance that provides computation of foreign income/ loss and adjustment and carry forward of losses;
v. There is no option to declare foreign income with their respective heads of income and instead only figure sums it all which does not give the fair picture of the foreign income;
vi. Tax on income from Pensioners Benefit /Behbood Certificates account is not being properly worked out.
vii. IRIS system is not calculating accurate tax on the income above Rs. 1,200,000/- in certain cases.
The FBR may also extend the last date for filing the income tax returns as it had received small amount of returns by September 29, 2019 as against last year’s returns of around 2.5 million.
Tax experts said that if FBR could able to receive around 0.5 million returns by September 30, 2019 even then it would be shortfall of 2 million returns.
The experts believed that due to steps toward broadening of tax base by the FBR it is expected that more returns would be filed for tax year 2019.
They said that as per law and statutory time period for filing of income tax return is Ninety (90) days under section 118 of the Income Tax Ordinance, 2001 read with rule 34 of the Income Tax Rules, 2002 while on the contrary only (28) days have been given here between September 02 and September 30, 2019 for online filing and only (1) one working day available for manual filing.