KIBOR+ additional amount to be paid for delayed refunds

KIBOR+ additional amount to be paid for delayed refunds

Section 171 of Income Tax Ordinance, 2001 explains KIBOR (Karachi Interbank Offered Rate) plus additional amount to be paid for delayed refunds.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following is the text of Section 171 of Income Tax Ordinance, 2001:

171. Additional payment for delayed refunds.—(1) Where a refund due to a taxpayer is not paid within three months of the date on which it becomes due, the Commissioner shall pay to the taxpayer a further amount by way of compensation at the rate of KIBOR plus 0.5 per cent per annum of the amount of the refund computed for the period commencing at the end of the three month period and ending on the date on which it was paid:

Provided that where there is reason to believe that a person has claimed the refund which is not admissible to him, the provision regarding the payment of such additional amount shall not apply till the investigation of the claim is completed and the claim is either accepted or rejected.

(2) For the purposes of this section, a refund shall be treated as having become due —

(a) in the case of a refund required to be made in consequence of an order on an appeal to the Commissioner (Appeals), an appeal to the Appellate Tribunal, a reference to the High Court or an appeal to the Supreme Court, on the date of receipt of such order by the Commissioner; or

(b) in the case of a refund required to be made as a consequence of a revision order under section 122A, on the date the order is made by the Commissioner; or

(c) in any other case, on the date the refund order is made.

Explanation.—For the removal of doubt, it is clarified that where a refund order is made on an application under sub-section (1) of section 170, for the purpose of compensation, the refund becomes due from the date refund order is made and not from the date the assessment of income treated to have been made by the Commissioner under section 120.

(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

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