Salaried persons denied adjustments against deduction

Salaried persons denied adjustments against deduction

ISLAMABAD: Salaried persons have been denied adjustment of tax credits against the deduction at source. The amendment has been introduced through Finance Bill, 2022.

The government on June 10, 2022 presented federal budget 2022/2023 and announced various taxation measures.

The Finance Bill, 2022 proposed amendment to sub-section 1 of Section 149 of Income Tax Ordinance, 2001.

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Under the present laws, employers are required to deduct / withholding tax at the time of payment to their employees. The employers are also authorized to adjust withholding tax paid by employees against other source of income.

However, through the proposed amendment employers would not be allowed to adjust deduction under Section 62, 63 and 64.

Finance Bill also recommended changes in Alternate Dispute Resolution (ADR).

Through the Finance Bill, 2022 amendment to Section 134A of Income Tax Ordinance, 2001 has been suggested.

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The text of proposed amended Section 134A is as follow:

“134A. Alternative Dispute Resolution. — (1) Notwithstanding any other provision of the Ordinance, or the rules made thereunder, an aggrieved person in connection with any dispute pertaining to—

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(a) the liability of tax of one hundred million and above against the aggrieved person or admissibility of refund, as the case may be;

(b) the extent of waiver of default surcharge and penalty; or

(c) any other specific relief required to resolve the dispute; may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any court of law or an Appellate Authority, except where criminal proceedings have been initiated.

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