In a move to enhance transparency and accountability, the Federal Board of Revenue (FBR) has implemented stringent regulations requiring professionals such as doctors, lawyers, and accountants to maintain meticulous records of payments received from clients or patients for income tax purposes.
According to FBR officials, the new regulations stipulate that professionals, including medical practitioners, legal practitioners, accountants, auditors, architects, engineers, among others, must keep the following records:
(a) Serially numbered and dated patient-slip/invoice/receipt for each transaction of sale or receipt, containing essential details: (i) Taxpayer’s name or the name of the business or profession, address, national tax number, or CNIC, and sales tax registration number if applicable. (ii) Description, quantity, and value of medicines supplied or details of treatment/case/services rendered (excluding confidential details), along with the amount charged. (iii) Name and address of the patient/client, with an exception for general medical practitioners.
(b) Daily appointment and engagement diary concerning clients and patients, excluding general medical practitioners.
(c) Daily record of receipts, sales, payments, purchases, and expenses, with a single entry for daily transactions under different heads.
(d) Vouchers of purchases and expenses.
FBR officials emphasized that taxpayers deriving income chargeable under the head ‘Income from Business’ must maintain proper books of accounts, documents, and records encompassing various aspects, including money transactions, sales and purchases of goods and services, assets and liabilities, and, for certain activities, detailed cost breakdowns related to materials, labor, and other inputs.
Moreover, the regulations allow taxpayers utilizing fiscal electronic cash registers or computerized accounting software to issue cash memos, invoices, or receipts generated electronically.
Duplicate copies and electronic or computer records of the aforementioned documents must be retained by the taxpayer and form an integral part of the records to be maintained under these regulations.
The stipulated time frame for maintaining these records is six years after the end of the tax year to which they relate. However, an exception is made in cases where any proceeding under the Ordinance is pending before any authority or court. In such instances, taxpayers must retain records until a final decision is reached in the proceedings.
The FBR believes that these measures will not only streamline tax compliance but also contribute to a more transparent and accountable professional landscape. The emphasis on maintaining detailed records reflects a commitment to combating tax evasion and ensuring that professionals fulfill their tax obligations effectively.
