ISLAMABAD: Federal Board of Revenue (FBR) has updated the rate of fine and penalty for failure to file annual return of income by a person, who has taxable income or required to file return of income under the law.
The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.
According to the Ordinance, where any person fails to furnish a return of income as required under Section 114 of the Ordinance within due date, then such person shall pay a penalty equal to 0.1 percent of the tax payable in respect of that tax year for each day of default subject to a maximum penalty of 50 percent of the tax payable provided that if the penalty worked out as aforesaid is less than Rs40,000 or not tax is payable for that tax year such person shall pay a penalty of Rs40,000/.
Provided that if 75 percent of the income is from salary and the amount of income under salary is less than Rs5 million, the minimum amount of penalty shall be Rs5,000.
Explanation: For the purpose of this entry, it is declared that the expression ‘tax payable’ means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under Section 120, 121, 122 or 122C.