PTBA advises return filing date extension; points out deficiencies

PTBA advises return filing date extension; points out deficiencies

KARACHI: Pakistan Tax Bar Association (PTBA) has asked Federal Board of Revenue (FBR) to extend the last date for filing income tax returns up to December 31, 2019 as the return form still has many deficiencies.

In a letter sent to FBR Chairman Syed Shabbar Zaidi, the PTBA advised extension in date of filing of income tax return of individuals, salaried individuals and Association of Persons (AOPs) for the year 2019.

The PTBA informed the FBR chairman the facts that due to late uploading of draft return 2019 on 23rd of August, 2019 through SRO 951 of 2019 and delayed final notification of Income Tax return 2019 of Individuals, Salaried Individuals & AOPs, wherein; final draft was uploaded on 02nd of September, 2019 through SRO 979 of 2019 which shows lapse of statuary period of two months (62 days) and it was all due to the negligence of the Federal Board of Revenue.

On 27th September, 2019 FBR issued manual income tax return form vide SRO 1160 of 2019 dated 27th September which is still not available on Excel format, so the small volume taxpayers could file their returns of income for the year 2019 within stipulated time.

The FBR once again introduced another fixed tax regime and issued draft rules for Small Shopkeepers and Traders under section 99B and 99C of the Income Tax Ordinance, 2001 in the month of July, 2019 and the high ups were busy in consultation process with Shopkeepers and Traders but no result and could not come on one page till to date for filing of returns under fixed tax regime.

Similarly, the PTBA added, the month of September was just wasted in adjustment of system and in development of its smoothness creating further lapse of one month and even working of IRIS is not smooth till to date like expiring of feeding page with the lapse of few minutes, abnormal logging out and taking longer time in surfing are the major reasons in delay filling of returns. Few of the discrepancies are being reproduced hereunder for your kind attention as filing of income tax returns has been seriously affected by these lacunas:

i. Return / Statement of Final Taxation for Individuals, Salaried Individuals and AOPs is forcibly accompanied with Wealth Statement, which is a separate requirement under Section 116 of the Income Tax Ordinance, 2001;

ii. Non-residents are not able to file their income tax return without Wealth Statement and details of personal expense which is not binding upon them as per statue;

iii. Tax return of a Salaried Individual still lacking certain details of assets/liabilities in Wealth Statement which is not in accordance with section 116 of the Ordinance;

iv. There is a single field/ column for foreign income only contrary to the requirements of section 103(8) read with section 104 of the Ordinance that provides computation of foreign income/ loss and adjustment and carry forward of losses;

v. There is no option to declare foreign income with their respective heads of income and instead only figure sums it all which does not give the fair picture of the foreign income;

vi. Tax on income from Pensioners Benefit /Behbood Certificates account is not being properly worked out.

vii. IRIS system is not calculating accurate tax on the income above Rs. 1,200,000/- in certain cases.

Furthermore, the PTBA said it was strange to see that an embargo was imposed vide circular C.No.2()Cond./I.Tax/2018 dated 05th of September, 2019 wherein all the Chief Commissioners were directed to make sure the deposit of admitted tax liability before 30th September, 2019 to grant extension in filing of Income Tax Return for tax year 2019. Which is not possible as even till to date there are number of deficiencies in Income Tax Return 2019 and demanding income tax before calculation of tax through IRIS is just like day dreaming.

Besides, as per law and statutory time period for filing of income tax return is Ninety (90) days under section 118 of the Income Tax Ordinance, 2001 read with rule 34 of the Income Tax Rules, 2002 while on the contrary only (28) days have been given here between 2nd of September and 30th of September 2019 for online filing and only (1) one working day available for manual filing.

Keeping in view of the above problem the date of filing of Income Tax return of Individuals, Salaried Individual & AOPs for the year 2019 be extended up to 31st December, 2019 in order to facilitate the genuine taxpayers of the country, who are regularly contributing in the National Exchequer as their moral and legal obligation, the PTBA said.