Section 100BA of the Income Tax Ordinance, 2001 introduces special provisions for persons not appearing on the Active Taxpayers’ List (ATL).
Incorporated through the Finance Act, 2021, and updated up to June 30, 2021, the provision aims to ensure a more rigorous approach to the collection or deduction of advance income tax, as well as the computation of income and tax payable for individuals not listed on the ATL.
Text of Section 100BA – Special Provisions for Persons Not on ATL:
Section 100BA of the Income Tax Ordinance, 2001, outlines the special provisions applicable to individuals not on the Active Taxpayers’ List. The section reads as follows:
100BA. Special provisions relating to persons not appearing in active taxpayers’ list.
(1) The collection or deduction of advance income tax, computation of income and tax payable thereon in respect of a person not appearing on the active taxpayers’ list shall be determined in accordance with the rules in the Tenth Schedule.
(2) The provisions of the Tenth Schedule shall have effect notwithstanding anything to the contrary contained in this Ordinance.
(1) Determination of Tax for Non-ATL Individuals: Section 100BA(1) specifies that the collection or deduction of advance income tax, along with the computation of income and tax payable for individuals not on the ATL, shall be determined in accordance with the rules outlined in the Tenth Schedule. This signifies a distinct and focused approach to tax assessment for individuals not currently listed on the ATL.
(2) Primacy of the Tenth Schedule: The importance of the Tenth Schedule is emphasized in Section 100BA(2), as it states that the provisions of the Tenth Schedule shall have effect notwithstanding anything to the contrary contained in the Income Tax Ordinance, 2001. This underscores the specific applicability and precedence of the Tenth Schedule in cases covered by Section 100BA.
(3) Rigorous Tax Compliance for Non-ATL Individuals: By introducing special provisions for non-ATL individuals, Section 100BA reinforces the commitment of the Federal Board of Revenue (FBR) to ensuring comprehensive tax compliance. The provisions are designed to address the unique circumstances and challenges associated with taxpayers who are not currently on the ATL.
(4) Tailored Approach to Tax Assessment: The use of the Tenth Schedule in determining the tax obligations of non-ATL individuals suggests a tailored and specialized approach to tax assessment. This recognizes the diversity of the taxpayer base and allows for a more nuanced evaluation of income and tax liability.
(5) Strengthening Tax Administration: Section 100BA contributes to the overall strengthening of tax administration in Pakistan. By providing specific provisions for non-ATL individuals, the FBR aims to improve the accuracy and effectiveness of tax assessment, ultimately enhancing revenue collection and promoting fairness in the taxation system.
(6) Encouraging ATL Inclusion: While Section 100BA introduces special provisions for non-ATL individuals, it also serves as an incentive for taxpayers to actively pursue inclusion on the ATL. Being on the ATL not only simplifies the tax compliance process but also offers various benefits, including reduced withholding tax rates on certain transactions.
Section 100BA of the Income Tax Ordinance, 2001 represents a targeted effort by the FBR to address the tax compliance challenges associated with individuals not currently on the Active Taxpayers’ List. The introduction of special provisions and the primacy of the Tenth Schedule indicate a commitment to ensuring a robust and effective tax assessment process for this segment of the taxpayer base. As tax regulations evolve, individuals and businesses are advised to stay informed about these provisions to ensure compliance with the specific rules applicable to non-ATL taxpayers.
