The Federal Board of Revenue (FBR) has shed light on the criteria for determining resident individuals for taxation under Section 82 of the Income Tax Ordinance, 2001.
The section, which was updated up to June 30, 2021, outlines various conditions that an individual must meet to be considered a resident individual for a given tax year.
Section 82 of the Income Tax Ordinance, 2001 begins by stating that an individual shall be deemed a resident individual for a tax year if the individual is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and eighty-three days or more in the tax year. This condition emphasizes the importance of physical presence within the country as a key determinant for tax residency.
Additionally, the section introduces another condition for tax residency, stating that an individual can be considered a resident if they are an employee or official of the Federal Government or a Provincial Government posted abroad during the tax year. This provision acknowledges the unique circumstances of government employees who may be serving their duties abroad but are still considered residents for tax purposes.
It’s noteworthy that Section 82 emphasizes the cumulative nature of the 183-day requirement. This means that the individual can achieve the required number of days through multiple visits or a continuous stay within the specified period.
However, it is essential for taxpayers and stakeholders to note that the information provided is based on the text of Section 82 of the Income Tax Ordinance, 2001, as of the last update on June 30, 2021. Amendments made through the Finance Act, 2021, have been incorporated into the Ordinance, and taxpayers should be aware of any subsequent changes that may impact their tax residency status.
As part of the disclaimer issued by Team PkRevenue.com, it is crucial to highlight that while efforts are made to provide the correct version of the text, the team is not responsible for any error or omission. Taxpayers and professionals are advised to verify the latest amendments and updates from official sources to ensure compliance with the current tax regulations.
Section 82 of the Income Tax Ordinance, 2001 plays a crucial role in determining the tax residency status of individuals in Pakistan. The conditions outlined in the section provide clarity on the factors that contribute to an individual being classified as a resident for tax purposes. As tax laws evolve, it is imperative for taxpayers to stay informed about any amendments or changes that may impact their tax obligations.
