Salaried individuals require keeping tax certificate for six years

Salaried individuals require keeping tax certificate for six years

ISLAMABAD: Salaried individuals are required to keep tax / salary certificate for minimum six years for assessment and audit purpose.

The FBR issued Income Tax Rules, 2002 (updated September 08, 2020). Under these rules taxpayers require to keep tax record for at least six years.

(1) Taxpayers deriving income from Salary:

Salary certificate indicating the amount of salary and tax deducted there from.

(2) Taxpayers deriving income from property:

(a) Tenancy agreement. if executed;

(b) Tenancy termination agreement, if executed;

(c) Receipt for amount of rent received; and

(d) Evidence of deductions claimed in respect of premium paid to insure the building, local rate, tax, charge or cess, ground rent, profit/interest or share in rent on money borrowed, expenditure on collecting the rent, legal services and unpaid rent.

(3) Taxpayers deriving income from capital gains:

(a) Evidence of cost of acquiring the capital asset;

(b) Evidence of deduction for any other costs claimed; and

(c) Evidence in respect of consideration received on disposal of the capital asset.

(4) Taxpayers deriving income from other sources:

(a) Dividends:

Dividend warrants.

(b) Royalty:

Royalty agreement

(c) Profit on debt:

(i) Evidence and detail of profit yielding debt;

(ii) Evidence of profit on debt and tax deducted thereon, like certificate in the prescribed form or bank account statement; and

(iii) Evidence of Zakat deducted, if any.

(d) Ground rent, rent from the sub-lease of land or building, income from the lease of any building together with plant or machinery and consideration for vacating the possession of a building or part thereof:

(i) Lease agreement; and

(ii) Lease termination agreement.

(e) Annuity or Pension: Evidence of amount received.

(f) Prize money on bond, winning from a raffle, lottery or cross word puzzle:

Evidence of income and tax deducted thereon, like certificate in the prescribed form.

(g) Provision use or exploitation of property:

Agreement.

(h) Loan, advance, deposit or gift:

Evidence of mode of receipt of a loan, advance, deposit or gift i.e. by a crossed cheque or through a banking channel

(i) General:

Evidence of deduction for any other expenditure claimed.

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