In a move to streamline the process of disclosing undisclosed assets, expenditure, and sales, Section 120B of the Income Tax Ordinance, 2001 has outlined specific limitations on proceedings under the Assets Declaration Act, 2019.
The provision aims to provide clarity and a structured framework for individuals opting to declare their undisclosed assets and expenditures under the specified scheme.
As per the updated version of the Income Tax Ordinance, 2001, incorporating amendments through the Finance Act, 2021, the text of Section 120B is as follows:
Section 120B: Restriction of Proceedings
(1) Where any person, eligible to declare undisclosed assets, expenditure, and undisclosed sales under the Assets Declaration Act, 2019, chooses to declare such assets, expenditures, or sales to fulfill their tax obligations, no proceedings shall be initiated under the Income Tax Ordinance, 2001, in respect of the said declaration.
(2) Despite the provisions of any other existing law, Sub-section (3) of Section 216, with the exception of clauses (a) and (g) of Sub-section (3) of Section 216, ensures the confidentiality of information related to individuals making declarations under the Assets Declaration Act, 2019. Any particulars or information received through such declarations remain confidential.
The primary objective of Section 120B is to incentivize taxpayers to voluntarily disclose their undisclosed assets, expenditures, and sales under the Assets Declaration Act, 2019. By doing so, individuals can regularize their financial matters and contribute to the formalization of the economy.
The provision not only sets a clear framework for the declaration process but also offers a safeguard by restricting proceedings under the Income Tax Ordinance, 2001 for those availing themselves of the Assets Declaration Act, 2019. This approach aims to encourage compliance and transparency while providing individuals with a mechanism to rectify any irregularities in their financial affairs.
The confidentiality clause in Sub-section (2) of Section 120B adds an extra layer of protection for individuals making declarations. It assures them that the information they provide under the Assets Declaration Act, 2019 will be handled with the utmost confidentiality, except in cases explicitly outlined in Sub-section (3) of Section 216.
As always, individuals and entities are encouraged to stay informed about the latest amendments and provisions in tax laws to ensure compliance with regulations and make informed decisions about their financial responsibilities. The FBR remains committed to creating a tax system that is transparent, fair, and conducive to economic growth.
