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Tag: Federal Board of Revenue

The Federal Board of Revenue is Pakistan’s apex tax agency, overseeing tax collection and policies. Pakistan Revenue is committed to providing timely updates on the Federal Board of Revenue to its readers.

  • Withholding tax rate on non-cash banking transactions updated

    Withholding tax rate on non-cash banking transactions updated

    ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax rate on non-cash banking transactions made by persons not appearing on the Active Taxpayers List (ATL).

    The FBR issued withholding tax card 2020/2021 updated up to June 30, 2020.

    The FBR said that 0.6 percent withholding tax rate is applicable on non-cash banking transactions under Section 236P of Income Tax Ordinance, 2001. It said that every banking company shall collect withholding tax from persons not on the ATL at the time of sale of such instruments. The tax so deducted/collected shall be adjustable.

    Under the Section 236P:

    (i) Every banking company shall collect advance tax from a person whose name is not appearing in the Active Taxpayers List on sale of instruments, including demand draft, pay order, special deposit receipts, cash deposit receipt, short term deposit receipt, call deposit receipt and rupee travelers’ cheque, where payment for sum total of all transactions exceed Rs50,000 in a day.

    (ii) Every banking company shall collect advance tax from a person whose name is not appearing in the active taxpayers list on transfer of any sum through cheque or clearing, interbank or interbank transfers through cheque, online/telegraphic/mail transfer, where payment for sum total of all transactions exceeds Rs50,000 in a day.

  • Marriage halls to install fiscal devices for tax reporting

    Marriage halls to install fiscal devices for tax reporting

    ISLAMABAD: Marriage halls and hotels will be required to install electronic fiscal devices for sharing their business transactions with the Federal Board of Revenue (FBR).

    The installation of fiscal devices have been mandatory in order bring certain service providers into the income tax net.

    According to sources that hotels, motels, guest houses, marriage halls, marquees, clubs (including race clubs) are required to install electronic fiscal devices.

    However, exemption from installation of devices are available where: the restaurant is operating otherwise than as part of a food court; and the facility of air-conditioning is not installed or available in the premises.

    The FBR issued SRO 779(I)/2020 dated August 26, 2020 to unveil draft rules to implement the law related to installation of electronic fiscal devices under Income Tax Ordinance, 2001.

    According to the rules, such taxpayers operating in Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad, Multan, Peshawar and Gujranwala will be required to install the fiscal devices.

    The sources said that the installation of fiscal devices to help the FBR in preventing revenue leakages in hospitality sector.

    They said that the taxpayers shall provide all sales data through online system which will be connected to the FBR portal for online monitoring and examination.

  • FBR launches online system to monitor earnings of doctors, medical consultants

    FBR launches online system to monitor earnings of doctors, medical consultants

    ISLAMABAD: Federal Board of Revenue (FBR) has launched an online system to monitor income derived by medical practitioners, doctors and consultants in order to prevent tax evasion.

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  • FBR explains holding period, tax rates on disposal of immovable properties

    FBR explains holding period, tax rates on disposal of immovable properties

    ISLAMABAD: Federal Board of Revenue (FBR) has explained holding period and tax rates for the computation of capital gains on disposal of immovable properties, which were amended through Finance Act, 2020.

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  • FBR enhances threshold to designate withholding agent

    FBR enhances threshold to designate withholding agent

    ISLAMABAD: In a significant move to enhance the ease of doing business, the Federal Board of Revenue (FBR) has announced that taxpayers with a turnover below Rs100 million are now excluded from the mandatory collection and deduction of withholding tax.

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  • Persons on Sales Tax ATL allowed sugar import with tax concessions

    Persons on Sales Tax ATL allowed sugar import with tax concessions

    ISLAMABAD: The ministry of commerce has said that only those importers, who are on the Active Taxpayers List (ATL) of Sales Tax issued by the Federal Board of Revenue (FBR), are eligible to import white sugar on concessional rate of tax.

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  • FBR allows monthly salary up to Rs25,000 paid in cash as business expense

    FBR allows monthly salary up to Rs25,000 paid in cash as business expense

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed monthly salary up to Rs25,000 per employee paid in cash as business expense after amendment made to Income Tax Ordinance, 2001.

    The FBR on Thursday issued Income Tax Circular No. 03 to explain changes made to Income Tax Ordinance, 2001 through Finance Act, 2020.

    The FBR said that section 21(m) of the Ordinance previously disallowed expenditure on account of monthly salary against business income if it was paid in excess of threshold of Rs 15,000 per month per employee and payment was made otherwise than through crossed cheque or direct transfer of funds to the employees bank account.

    The FBR said that the Finance Act, 2020, had increased this threshold to Rs25,000 per month per employee for payment of salary otherwise than through crossed cheque or direct transfer of funds to the employees bank account.

    The FBR further explained that Section 21(l) of the Ordinance does not allow deduction against business income if claim of a business expenditure exceeds Rs50,000/- under a single account head in aggregate and payment is made otherwise than through crossed banking instrument, online transfer of payment or credit card from business account of the taxpayer.

    However, this inadmissibility of deduction did not apply if a single transaction on account of such business expenditure remained at Rs. 10,000/- or below.

    “Finance Act, 2020 has increased these thresholds from Rs. 50,000 to Rs. 250,000/- and from Rs.10,000/- to 25,000/-respectively,” the FBR added.

    However, the FBR said that expenditure on account of utility bills is allowed against business income under section 20 of the Ordinance.

    “A new clause (p) has been added to Section 21 to disallow it if it is incurred in excess of certain limits and is in violation of certain conditions as may be prescribed by the FBR,” It added.

  • Filing income tax return mandatory for FTR taxpayers: FBR

    Filing income tax return mandatory for FTR taxpayers: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has said that filing annual income tax return is mandatory for taxpayers falling under final tax regime (FTR).

    The FBR on Thursday issued Income Tax Circular No. 03 of 2020 to explain major changes to Income Tax Ordinance, 2001 through Finance Act, 2020.

    The FBR said that prior to the Finance Act, 2020 persons subject to the final tax regime were obliged to file statement of final taxation under section 115(4) of the Ordinance.

    This section has now been omitted since final tax regime has been phased out for most of the transactions.

    “However, any person whose income is still subject to final tax regime, is now obligated to file normal income tax return and allied documents under the newly inserted clause (ae) in sub-section (1) of section 114 of the Ordinance,” the FBR said.

    The FBR further added that an enabling provision has also been inserted in clause (a) of sub-section (2) of section 114 of the Ordinance whereby the Board had been empowered to prescribe different returns for different classes of income or persons including persons subject to final taxation.

  • Tax return form not finalized so far as less than a month for deadline

    Tax return form not finalized so far as less than a month for deadline

    ISLAMABAD: Federal Board of Revenue (FBR) has yet to finalize income tax return form for tax year 2020 as less than one month is remaining for return filing due date.

    The due date for filing income tax returns is September 30, 2020 for tax year 2020. By this date salaried persons, Association of Persons (AOPs) and companies falling under special financial year are required to file their annual income tax returns.

    As per interpretation of tax experts the FBR should issue the tax return form on July 01 every year to give taxpayers three-month time to file their returns.

    This year, as usual, the FBR has already delayed two months in issuing the final draft of income tax return form. This delay may result in extension in time for filing the annual return.

    The FBR on August 19, 2020 issued draft income tax return form for tax year 2020 for taking input from stakeholders to finalize the return form. So far the FBR is failed to finalize the return despite lapse of around half a month.

    The FBR invited comments on the draft income tax return form within seven days from the date of issuance of SRO 745(I)/2020.

    It is pertinent to mention that the FBR is estimating half a million income tax return during next couple of years. Tax experts said that timely issuance of return form may help the FBR to achieve its desired number of return filers.

  • Project launched to promote tax culture through educational institutions

    Project launched to promote tax culture through educational institutions

    ISLAMABAD: Federal Board of Revenue (FBR) and Federal Directorate of Education (FDE) have signed a agreement to promote tax culture in the country through educational institutions.

    A special signing ceremony of Letter of Understanding (LoU) between FDE and FBR held on Wednesday in Ministry of Federal Education and Professional Training Islamabad.

    Ceremony was observed by Federal Minister Shafqat Mahmood, Parliamentary Secretary Wajija Akram Khan, Chairman FBR Javed Ghani, Federal Secretary Farah Hamid Khan, Additional Secretary Mohyuddin Ahmed Wani, Director General Federal Directorate of Education, Zia Batool and senior officers of the FBR.

    The LoU is aimed to promote tax culture and tax awareness in all educational institutions of Federal Directorate of Education.

    It shall serve to define and detail the terms & conditions to foster positive taxation culture serve and awareness among students and teachers through different sets of activities, skills and experiential learning for making them responsible citizen.

    Federal Board of Revenue will educate and train two hundred twenty thousand students & seven thousands & five hundred teachers through taxation syllabus, training sessions and seminars.

    Federal Board of Revenue (FBR) shall provide experiential learning opportunities, on and off campus for personal and professional development of the students and Teachers.

    Federal Board of Revenue is prime institution of the country which collects tax from businesses and individuals, scrutinize tax crimes and money laundering by applying highest standards of courtesy, integrity and professionalism.

    Federal Directorate of Education shall arrange tax awareness campaigns and walks in coming months all over the Islamabad capital territory.

    Federal Minister Shafqat Mahmood applauded the initiative and urged the provinces to follow this practice. Federal Education Minister has stated, we are introducing such reforms through syllabus for students and teachers, which have never been observed in the history of the country, before.

    The project will ensure improved personal and professional knowledge, attitude and skills of the students & teachers through core values of respect for law, the life and property of self and others by strictly following the Federal Board of Revenue.

    LoU was inked by Director General Federal Directorate of Education (FDE) Zia Batool and Chief (FATE) Federal Board of Revenue Ayesha Farooq.