KARACHI: Income tax return filing has increased to a new record high of 2.76 million as people making compliance to avoid 100 percent additional tax on persons not appearing on Active Taxpayers List (ATL).
The income tax return filing increased to 2.76 million on the basis of returns filed till January 12, 2020 for tax year 2018.
Sources in Federal Board of Revenue (FBR) attributed the record increase in return filing to the amendment to Income Tax Ordinance, 2001 through Finance Act, 2019.
In the last budget 2019/2020 a new Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which persons not appearing on ATL would liable to pay 100 percent more withholding tax on certain transactions.
The ATL for tax year 2018 issued on March 01, 2019 in which 1.59 million names were appeared of those taxpayer, who filed their returns by due date.
However, later the FBR granted extension in date for filing returns due to introduction of a tax amnesty scheme.
The extension for filing income tax returns for tax year 2018 was granted up to August 09, 2019.
The return filing up to August 09, 2019 for tax year 2018 jumped up to 2.5 million from 1.59 million returns, which were part of the first ATL issued March 01, 2019.
The insertion of Tenth Schedule to Income Tax Ordinance, 2001 speed up the return filing by taxpayers in order to avoid higher tax rate on certain transactions.
Previously, people filing their annual income tax returns after due date were not allowed to appear on the ATL. However, another provision was added to the main statute under which persons by paying penalty can include their name to ATL.
Therefore, since August 09, 2019 the FBR received around 260,000 tax returns for tax year 2018 till January 12, 2020.
The FBR will issue ATL for tax year 2019 on March 01, 2020 and till then the prevailing ATL will be applicable for the purpose of withholding tax rates on certain transactions.