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Tag: ATL

  • FBR asks taxpayers to update profile to avoid penalty

    FBR asks taxpayers to update profile to avoid penalty

    ISLAMABAD: Federal Board of Revenue (FBR) has asked taxpayers to update their profile with necessary information by December 31, 2020 in order to avoid fine and penalty.

    The FBR in a statement on Thursday said that complexity of return forms was an embodiment of the complexity of tax law. “Nevertheless, there is a dire need to simplify return forms without compromising on data required to verify accuracy of the declared version,” it added.

    Instead of endeavoring to obtain all the relevant information in the income tax return, a new section has been introduced under which taxpayers profile may be prescribed in order to capture data relevant to the taxpayer.

    Persons who are already registered before September 30, 2020 and are deriving business income or incomes subject to final taxation, trusts, welfare institutions, non-profit organizations and such other persons prescribed by the board are required to submit updated profit by December 31, 2020.

    Persons who obtain their registration after September 30, 2020 will require to furnish such profile within 90 days of registration. In case of any change in particulars of information, such persons shall update their profile within 90 days of the change in particulars.

    The profile contains information relevant to income regarding bank accounts, utility connections, business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer, types of businesses etc.

    Moreover, if a person fails to submit updated profile within the due date or time period as extended by the FBR under Section 214A of Income Tax Ordinance, 2001, such person shall not be included in the Active Taxpayers List for the latest tax year ending prior to the aforesaid due date or extended date.

    However, upon filing or updating the profile, such persons shall be allowed to be placed on the active taxpayers list upon payment of surcharge which will be Rs20,000 in the case of a company, Rs10,000 in the case of Association of Persons (AOP) and Rs1,000 in the case of an individual.

    Further, a penalty for non-filing or not updating the profile is also proposed at the rate of Rs2500 for each day of default subject to a minimum penalty of Rs10,000.

  • Above 120,000 income tax returns added to ATL during lockdown

    Above 120,000 income tax returns added to ATL during lockdown

    ISLAMABAD: The tax authorities have received above 120,000 income tax returns since launch of new Active Taxpayers List (ATL) on March 01, 2020 and during ongoing lockdown to prevent spread of coronavirus, according to updated list issued June 01, 2020.

    The updated ATL for tax, around 120,000 taxpayers filed their annual returns for tax year 2019 since March 01, 2020.

    The number of active taxpayers increased to over 2.65 million as of May 31, 2020 from 2.53 million returns as shown in new ATL for tax year 2019.

    The FBR updates ATL every week and on an average the revenue body receives around 20,000 returns per week. However, due to lockdown in the country after the outbreak of coronavirus the number of financial transactions had fallen drastically.

    It is worth mentioning that additional 120,000 income tax returns have been filed after the due date. The due date for filing income tax returns for tax year 2019 was February 28, 2020.

    As per law it was mandatory for individuals, Association of Persons (AOPs) and corporate entities to file annual return in order to avail reduced rates of withholding tax on certain transactions.

    Filing return after due date a person is required to pay surcharge in order to appear on ATL besides paying late filing penalty.

    The sources said changes in law through Finance Act, 2019 were also compelling to file their returns. Through Finance Act, 2019, Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which a person not appearing on the ATL would be liable to pay 100 percent additional withholding tax while making certain transactions.

    Prior to this change the persons not filing income tax returns were liable to pay enhanced rate of withholding tax.

    Previously, the law provides for the concept of a non-filer and stipulates higher withholding rates for the same which were adjustable at the time of filing of income tax return.

    A senior FBR official said that such tax regime had created a misconception that a non-filer can go scot free by choosing not to file income tax return.

    The measure are meant to increase the number of filers, however over time the focus shifted to raising additional revenue only.

    The measure had not achieved the desired results as the regime did not provide for any legal framework to ensure filing of return by such non-filers, the official said.

    In order to remove the aforesaid misconception, the concept and the term of ‘non-filer’ was abolished from the statute, the official added.

  • Persons not on new ATL to pay 100% additional withholding tax

    Persons not on new ATL to pay 100% additional withholding tax

    KARACHI: Persons who have failed to submit their annual income tax returns and declaration of assets for tax year 2019 will pay 100 percent additional withholding tax on certain transactions, sources in Federal Board of Revenue (FBR) said on Monday.

    They said that those taxpayers availing the benefit of reduced rate of withholding tax on the basis of returns filed for tax year 2018 would not more eligible.

    The FBR issued new Active Taxpayers List (ATL) for tax year 2019 including names of those return filers who filed their returns up to February 29, 2020.

    The new ATL included name of 2.53 million taxpayers who filed their returns for tax year 2019. These taxpayers were salaried persons, business individuals, Association of Persons (AOPs) and companies.

    The FBR had extended the last date for filing income tax returns and declaration of assets up to February 28, 2020.

    The sources said that through Finance Act, 2019 a new 10th Schedule to Income Tax Ordinance, 2001 was introduced under which the FBR imposed 100 percent additional withholding tax on those persons whose name were not on the ATL.

    Previously, the law provides for the concept of a non-filer and stipulates higher withholding rates for the same which were adjustable at the time of filing of income tax return.

    This tax regime has created a misconception that a non-filer can go scot free by choosing not to file income tax return.

    The measure was meant to increase the number of filers, however over time the focus shifted to raising additional revenue only.

    The measure had not achieved the desired results as the regime did not provide for any legal framework to ensure filing of return by such non filers.

    In order to remove the aforesaid misconception, the concept and the term of “non-filer” was abolished from the statute, wherever occurring.

    In its stead a separate Schedule is being introduced to specifically provide a legal framework for punitive measures for persons not appearing on ATL and to ensure filing of return by such persons.

    The main attributes of this scheme are as under:-

    — Persons whose names are not appearing on the ATL will be subjected to hundred percent increased rate of tax.

    — The withholding agents will clearly specify the names, CNIC or any other identification of such persons in the withholding statement so that legal provisions to enforce return can come into effect.

    — Where a withholding agent is of the opinion that hundred percent increased tax is not required to be collected on the basis that the person was not required to file return, the withholding agent shall furnish an intimation to the Commissioner setting out the basis on which the person is not required to file return.

    The Commissioner shall accept or reject the contention on the basis of existing law. In case the Commissioner fails to respond within thirty days, permission shall be deemed to be granted to not deduct tax at hundred percent increased rate o Where the person’s tax has been deducted or collected at hundred percent increased rate and the person fails to file return of income for the year for which tax was deducted, the Commissioner shall make a provisional assessment within sixty days of the due date for filing of return by imputing income so that tax on imputed income is equal to the hundred percent increased tax deducted or collected from such person and the imputed income shall be treated as concealed income.

    — The provisional assessment shall be of no effect if the person files return within forty five days of completion of provisional assessment and the provisions of the Ordinance shall apply accordingly. Where return is not filed within forty five days of provisional assessment, it shall be treated as final assessment and the Commissioner shall initiate penalty proceedings for concealment of income.

  • FBR to issue ATL Tax Year 2019 on March 01

    FBR to issue ATL Tax Year 2019 on March 01

    KARACHI: Federal Board of Revenue (FBR) will issued Active Taxpayers List (ATL) for tax year 2019 on March 01, 2020 to enable persons filed income tax returns for the tax year availing reduced rates and other benefits.

    ATL is published every financial year on the March 01 and is valid up to the last day of February of the next financial year, the FBR said.

    For example, Active Taxpayer List for Tax year 2017 was published on March 01, 2018 and will be valid till February 28, 2019.

    Similarly, Active Taxpayer List for Tax year 2018 was published on 1st March 2019 and will be valid till February 29, 2020.

    The appearance of ATL has become more important following amendment introduced through Finance Act, 2019 under which 100 percent additional tax has been imposed on certain transactions by persons not appearing on the ATL.

    The FBR in an official memorandum said that previously the law provided for the concept of a non-filer and stipulates higher withholding rates for the same which were adjustable at the time of filing of income tax return.

    This tax regime had created a misconception that a non-filer can go scot free by choosing not to file income tax return.

    The measure was meant to increase the number of filers, however over time the focus shifted to raising additional revenue only.

    The measure had not achieved the desired results as the previous regime did not provide for any legal framework to ensure filing of return by such non filers.

    In order to remove the aforesaid misconception, the concept and the term of ‘non-filer’ is being abolished from the statute, wherever occurring.

    A separate Schedule has introduced to specifically provide a legal framework for punitive measures for persons not appearing on ATL and to ensure filing of return by such persons.

    The main attributes of this scheme are as under:-

    — Persons whose names are not appearing on the ATL will be subjected to hundred percent increased rate of tax.

    — The withholding agents will clearly specify the names, CNIC or any other identification of such persons in the withholding statement so that legal provisions to enforce return can come into effect.

    — Where a withholding agent is of the opinion that hundred percent increased tax is not required to be collected on the basis that the person was not required to file return, the withholding agent shall furnish an intimation to the Commissioner setting out the basis on which the person is not required to file return. The Commissioner shall accept or reject the contention on the basis of existing law. In case the Commissioner fails to respond within thirty days, permission shall be deemed to be granted to not deduct tax at hundred percent increased rate

    — Where the person’s tax has been deducted or collected at hundred percent increased rate and the person fails to file return of income for the year for which tax was deducted, the Commissioner shall make a provisional assessment within sixty days of the due date for filing of return by imputing income so that tax on imputed income is equal to the hundred percent increased tax deducted or collected from such person and the imputed income shall be treated as concealed income.

    — The provisional assessment shall be of no effect if the person files return within forty five days of completion of provisional assessment and the provisions of the Ordinance shall apply accordingly. Where return is not filed within forty five days of provisional assessment, it shall be treated as final assessment and the Commissioner shall initiate penalty proceedings for concealment of income.

  • Late filers to get ATL status only after surcharge payment

    Late filers to get ATL status only after surcharge payment

    KARACHI: Late filers will only get their names on the Active Taxpayers List (ATL) after payment of penalty or surcharge.

    It has been observed that many taxpayers were filing their income tax returns for tax year after the last date of August 09, 2019 but they could not get their name on the ATL.

    The taxpayers noticed that their returns were filed and shown on the completed task but their names were not appeared on the ATL.

    However, this issued was resolved when they deposited penal amount to the Federal Board of Revenue (FBR).

    Officials at the FBR said that the late filers of Income Tax Return for Tax Year 2018 can pay “Surcharge for ATL” as defined under section 182(A) of Income Tax Ordinance 2001 by clicking on Tax Payment Nature “Misc” head in the PSID.

    “Only after the payment of surcharge will the name of the late filer become part of ATL.”

    In order to make normal payment through electronic mode, the officials said that in the e-Payments tab, a person will access Create Payment and then select Income Tax Annual Return option.

    The resulting selection will lead you to Income Tax e-Payment page. On this page a payment slip (PSID) will be created by:

    Selecting the relevant Tax Year

    Typing the Tax amount due

    Selecting the mode of payment

    Clicking the create button on the bottom of the page Confirm the e-Payment created. This will successfully create the e-Payment slip.

    The e-Payment slip can be deposited in any National Bank (NBP)/State Bank (SBP) branch. Select the nearest city where a taxpayer wants to deposit the payment slip from the drop down list.

    Click the print button to download the PSID on your computer. Deposit the PSID in any of the available branches of the city of your choice.

  • Income tax return filing hits new record high of 2.7 million

    Income tax return filing hits new record high of 2.7 million

    ISLAMABAD: Measures to increase tax burden on non-compliant persons have resulted into record income tax return filing of 2.7 million for tax year 2018.

    (more…)
  • Procedure to check active taxpayer status

    Procedure to check active taxpayer status

    ISLAMABAD: Appearance of a taxpayer in Active Taxpayers List (ATL) has become very important to avail benefit of reduced withholding income tax rate.

    The ATL has become even more important after the inclusion of 10th Schedule to Income Tax Ordinance, 2001 through Finance Act, 2019 under which a person, who is not part of the ATL, is subject to 100 percent additional withholding tax.

    According to Federal Board of Revenue (FBR) a taxpayer can check its active status in three different ways, which included:

    Verification through Online Portal:

    The ATL status check allows you to confirm your Active Taxpayer status.

    Check Active Taxpayer status by SMS:

    Check Individual’s Active Taxpayer status by SMS

    Type “ATL (space) 13 digits Computerized National Identity Card (CNIC)” and send to 9966.

    Check Active Taxpayer status of AOP and Company by SMS

    Type “ATL (space) 7 digits National Tax Number (NTN)” and send to 9966.

    To check active status by taxpayers of Azad Jammu and Kashmir by SMS

    For Individual, type AJKATL (space) CNIC (without dashes). Send it to 9966.

    Having NTN AJKATL (space) 11 digit NTN (without dashes). Send it to 9966.

    The Active Tax Payer’s List of AJK is to be considered at par with the ATL (Income Tax) after amendment in the Income Tax Ordinance 2001 through Finance Act 2018.

    Check Active Taxpayer status by downloading ATL from FBR official website.

    DOWNLOAD LATEST ATL

    The FBR said that a person appearing on the ATL will have following benefits:

    Lower rates of tax deduction at source by banks on both profits and cash withdrawals

    Reduction on withholding tax (tax already deducted from your income and gains) when registering and transferring motor vehicles

    Lower rate of tax on buying and selling of property

    Lower withholding tax rate on capital gains on sale of securities

    Charges for tax on dividend will be lower

    Lower rate of withholding tax on prize bond winnings

    Allows you to claim back overpaid tax that has been withheld.

    The FBR said that a person’s name will be part of the current ATL, if the Tax Return filed pertains to the Tax year of the relevant ATL.

    For example, to be part of the ATL published on 1st March 2018, a person must have filed a Tax return for the Tax year 2017. Similarly, to be a part of the ATL published on 1st March 2019, a person must have filed a Tax Return for the Tax year 2018.

    Restriction on including a person’s name on ATL, if the person has not filed Tax Return by the due date specified by Income tax authorities was introduced through Finance Act, 2018. For example, to be part of the ATL published on 1st March 2019, a person must file a Tax Return by the specified due date for the Tax year 2018.

    However, through Finance Act, 2019 a person’s name can be part of ATL, even if the person has filed Tax Return after the due date specified by Income Tax authorities.

    Furthermore, a surcharge for placement on ATL after due date of filing of Tax Return will be charged as under:

    Company: Rs20,000

    Association of Persons: Rs10,000

    Individual: Rs1,000

    A company or an AOP shall be included in the ATL, whose return is not to be filed due to incorporation or formation after 30th day of June relevant to the Tax year pertaining to the ATL.

    Joint account holders as an entity shall be deemed to be part of ATL if any of the persons in the joint account have met the criteria of being included in the ATL.

    Bank account held in the name of a minor shall be considered part of ATL if the parents, guardians of the minor or any person who has deposited money in minor’s account are deemed to have met the criteria of being included in the ATL.

    The FBR said that the late filers of Income Tax Return for Tax Year 2018 can pay “Surcharge for ATL” as defined under section 182(A) of Income Tax Ordinance 2001 by clicking on Tax Payment Nature “Misc” head in the PSID.

    The name of late filer will appear on the ATL only after the payment of surcharge, the FBR added.

  • Income tax return filing increases to record 2.667 million

    Income tax return filing increases to record 2.667 million

    ISLAMABAD: The income tax return filing has increased to record level of 2.667 million, according to Active Taxpayers List (ATL) for tax year 2018 released on Monday.

    (more…)
  • FBR explains benefits of timely filing income tax returns

    FBR explains benefits of timely filing income tax returns

    ISLAMABAD: Federal Board of Revenue (FBR) has explained benefits of filing annual income tax returns for tax year 2019 by due date i.e. September 30, 2019.

    The FBR in its ongoing campaign for encouraging people to file their income tax returns by due date highlighted advantages of filing by due date and also pointed out disadvantages of non-compliance.

    The FBR said that for not filing the return by due date the person/company will be charged withholding tax at double rates; FBR will assess the applicable tax without serving any notice; legal action will be taken resulting into imprisonment of one to three years; fine will be charged on late submission of income tax return.

    By filing the income tax returns by due date i.e. September 30, a person/company shall be enlisted to Active Taxpayers List (ATL). The following are the benefits of ATL enlistment:

    — Almost half of the withholding tax as compared with the inactive taxpayers

    — 5.5 percent tax on imports (raw material)

    — 6 percent on imports (commercial)

    — 15 percent tax on dividends

    — 10 percent tax on bank and saving scheme profit worth up to Rs0.5 million and 15 percent on above Rs0.5 million

    — 4.5 percent tax on sale of goods by persons except companies

    — 10 percent tax on provision of services by persons except companies

    — 7.5 percent tax on contracts executed by person except companies

    — 15 percent tax on prize money of prize bonds

    — 12 percent tax on commission

    — Annual token fee of vehicles from Rs800 to Rs10,000

    — Withholding tax on vehicle registration from Rs7,500 to Rs250,000

    — No tax on cash withdrawal of more than Rs50,000 from banks

    — No tax on bank transactions (cross cheque, pay order, demand draft etc.)

    — One percent tax on purchase of property

    — 10 percent tax on sale by auction

    — Tax on mobile phone import from Rs70 to Rs200

    — 10 percent tax deduction for payment against advertisement to non-resident person.

    The FBR also highlighted drawback in shape of double rate of tax on following transactions in case of not filing return by due date:

    — Almost double tax rate

    — 11 percent tax on imports (raw material)

    — 12 percent on imports (commercial)

    — 30 percent tax on dividends

    — 20 percent tax on bank and saving scheme profit worth up to Rs0.5 million and 30 percent on above Rs0.5 million

    — 9 percent tax on sale of goods by persons except companies

    — 20 percent tax on provision of services by persons except companies

    — 15 percent tax on contracts executed by person except companies

    — 30 percent tax on prize money of prize bonds

    — 24 percent tax on commission

    — Annual token fee of vehicles from Rs1600 to Rs20,000

    — Withholding tax on vehicle registration from Rs15,000 to Rs500,000

    — 0.6 percent tax on cash withdrawal of more than Rs50,000 from banks

    — 0.6 percent tax on bank transactions (cross cheque, pay order, demand draft etc.)

    — Two percent tax on purchase of property

    — 20 percent tax on sale by auction

    — Tax on mobile phone import from Rs140 to Rs400

    — 20 percent tax deduction for payment against advertisement to non-resident person.

  • Late return filers may get ATL status after payment of surcharge

    Late return filers may get ATL status after payment of surcharge

    ISLAMABAD: Persons, who fail to file their income tax return by due date, may be included into the Active Taxpayers List (ATL) after payment of surcharge.

    Inclusion in ATL is mandatory to avail reduced rate of withholding tax. Through Finance Act, 2019 the rates of withholding tax have been increased 100 percent for those persons who have either failed to file annual return or filed return after due date.

    This means only those individuals or companies will get ATL status who filed their annual income tax returns by due date.

    The FBR said that a person’s name will be part of the current ATL, if the Tax Return filed pertains to the Tax year of the relevant ATL.

    For example, to be part of the ATL published on 1st March 2018, a person must have filed a Tax return for the Tax year 2017.

    Similarly, to be a part of the ATL published on 1st March 2019, a person must have filed a Tax Return for the Tax year 2018.

    Restriction on including a person’s name on ATL, if the person has not filed Tax Return by the due date specified by Income tax authorities was introduced through Finance Act, 2018.

    For example, to be part of the ATL published on 1st March 2019, a person must file a Tax Return by the specified due date for the Tax year 2018.

    However, through Finance Act, 2019 a person’s name can be part of ATL, even if the person has filed Tax Return after the due date specified by Income Tax authorities.

    Furthermore, a surcharge for placement on ATL after due date of filing of Tax Return will be charged as under:

    Company Rs20,000

    Association of Persons: Rs10,000

    Individuals: Rs1,000

    The FBR said a that company or an AOP shall be included in the ATL, whose return is not to be filed due to incorporation or formation after 30th day of June relevant to the Tax year pertaining to the ATL.

    Joint account holders as an entity shall be deemed to be part of ATL if any of the persons in the joint account have met the criteria of being included in the ATL.

    Bank account held in the name of a minor shall be considered part of ATL if the parents, guardians of the minor or any person who has deposited money in minor’s account are deemed to have met the criteria of being included in the ATL.

    The FBR said that the late filers of Income Tax Return for Tax Year 2018 can pay “Surcharge for ATL” as defined under section 182(A) of Income Tax Ordinance 2001 by clicking on Tax Payment Nature “Misc” head in the PSID.

    Only after the payment of surcharge will the name of the late filer become part of ATL.