Return filing for tax year 2019 must for salary income above Rs400,000

KARACHI: Persons having salary income above Rs400,000 are required to file income tax returns for tax year 2019 as slabs revised through Finance Act, 2019 will be applicable for tax year 2020, officials said on Thursday.

The officials said that there were misconceptions about the filing of income tax returns for tax year 2019 by the salary persons due to changes brought in Income Tax Ordinance, 2001 through Finance Act, 2019.

As per the amendment the minimum threshold for filing income tax returns for tax year 2020 has been increased to Rs600,000 for which the return filing will be due in September 2020. However, the salary persons are required to file income tax returns on the basis of minimum threshold of Rs400,000.

The date for filing of income tax return has been extended to January 31, 2020. The actual date for filing of income tax returns for tax year 2019 was September 30, 2019. However, since then the FBR extended the date for five times.

The tax officials said that the persons required to file income tax returns before the applicable of new tax rates should discharge their liabilities in order to avoid penal action.

The tax rates for salary persons under Income Tax Ordinance, 2001 prior to amendments through Finance Act, 2019 are as follow:

Where the income of an individual chargeable under the head “salary” exceeds fifty per cent of his taxable income, the rates of tax to be applied shall be as set out in the following table, namely:—

01. Where the taxable income does not exceed Rs400,000: the tax rate shall be zero percent

02. Where the taxable income exceeds Rs400,000 but does not exceed Rs800,000: the tax rate shall be Rs1,000

03. Where the taxable income exceeds Rs800,000 but does not exceed Rs1,200,000: the tax rate shall be Rs2,000

04. Where the taxable income exceeds Rs1,200,000 but does not exceed Rs2,500,000: the tax rate shall be 5 percent of the amount exceeding Rs1,200,000

05. Where the taxable income exceeds Rs2,500,000 but does not exceed Rs4,000,000: the tax rate shall be 65,000 + 15 percent of the amount exceeding Rs. 2,500,000

06. Where the taxable income exceeds Rs4,000,000 but does not exceed Rs8,000,000: the tax rate shall be 290,000 + 20 percent of the amount exceeding Rs4,000,000

07. Where the taxable income exceeds Rs. 8,000,000: the tax rate shall be Rs1,090,000 + 25 percent of the amount exceeding Rs8,000,000

Provided that where the taxable income exceeds eight hundred thousand rupees the minimum tax payable shall be two thousand rupees.

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