Finance Act 2020: Suppression of sales to be taxed under income from business

Finance Act 2020: Suppression of sales to be taxed under income from business

ISLAMABAD: An attempt of a businessman to suppress sales chargeable to tax in order to reduce tax liability shall be taxed under the head of income from business, according to Finance Act 2020 recently passed by the National Assembly.

Officials at Federal Board of Revenue (FBR) said that amendment has been made to Section 111 of the Income Tax Ordinance, 2001 in order to bring concealed business activity shall be treated as income from business.

According to the amendment:

(a) The amount credited, value of the investment, money, value of the article, or amount of expenditure shall be included in the person’s income chargeable to tax under the head ‘income from other sources’ to the extent it is not adequately explained; and

(b) The suppressed amount of production, sales or any amount chargeable to tax or of any item of receipt liable to tax shall be included in the person’s income chargeable to tax under the head ‘income from business’ to the extent it is not adequately explained.