About six days are left in the new deadline given by the Federal Board of Revenue (FBR) for filing income tax returns. The revenue body extended the date for filing annual returns up to October 31, 2022.
The last date was September 30, 2022 for filing income tax return for tax year 2022. However, due to various issues on the online portal and complaints of stakeholders the date was extended.
The FBR extended the date for filing income tax returns for tax year 2022 up to October 31, 2022 through Circular No. 16 of 2022.
Stakeholders are still not satisfied with the performance with the online portal of the FBR for filing income tax returns.
Tax practitioners said that subject to some exemptions, tax rate of 20 per cent had been imposed on deemed income calculated at five per cent of fair market value of capital assets situated in Pakistan.
The fair market has been defined in Section 68 of the Income Tax Ordinance, 2001 and has also been notified by the FBR through number of SROs.
READ MORE: No audit of IT sector due to fixed tax regime: FBR chairman
The tax practitioners pointed out that filing income tax returns by providing details of immovable property under Section 7E were uphill task and many returns were not completed due to cumbersome procedure.
Senior tax officials, however, said that the return filing portal was functioning smoothly and large number of taxpayers had already discharge their national duty by filing their returns.
They said that the all the taxpayers other than corporate taxpayers are required to file annual return of income for tax year 2022 by October 31, 2022.
They said that taxpayers including salaried persons, business individuals, association of persons (AOPs) and companies other than having account year July to June are required to file the return of income.
READ MORE: Electricity withholding tax not applicable on ATL domestic consumers
The corporate entities having financial year between July 01 to June 30 are required to file their income tax returns by December 31 every year.
The FBR through SRO 978(I)/2022 dated June 30, 2022 issued income tax return form for tax year 2022 giving statutory time to taxpayers for making compliance in filing of return.
Section 14 of Income Tax Ordinance, 2001, highlighted the categories of taxpayers, who are required to file their annual return of income and wealth statement.
According to Income Tax Ordinance, 2001, following class of taxpayers are required to file return of income:
READ MORE: Tax rates on goods, passenger transport vehicles during 2022-2023
— every company
— every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year
— any non-profit organization as defined in clause (36) of section 2;
— every person whose income for the year is subject to final taxation under any provision of this Ordinance
Any person not covered by above clauses are also required to file return of income who,—
(i) has been charged to tax in respect of any of the two preceding tax years;
(ii) claims a loss carried forward under this Ordinance for a tax year;
READ MORE: FBR notifies tax rates on brokerage, commission during 2022-2023
(iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;
(v) owns a flat having covered area of two thousand square feet or more located in a rating area;
(vi) owns a motor vehicle having engine capacity above 1000 CC;
(vii) has obtained National Tax Number; or
(viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;
(ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or
(x) is a resident person being an individual required to file foreign income and assets statement under section 116A.
READ MORE: Non-ATL to pay 200% more tax on motor vehicle purchase during 2022-2023
The FBR said that filing of income tax return is also mandatory for persons or classes of persons notified by the Board with the approval of the Minister in-charge.
It further said that return of income is also mandatory for every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.
