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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.

  • Rate of advance income tax on education fee

    Rate of advance income tax on education fee

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance income tax to be collected by educational at the time of preparing fee challan during tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR updated the rate of collection of tax under section 236I of Income Tax Ordinance, 2001, which shall be 5 percent of the amount of fee.

    Following is the text of Section 236I under which the advance tax to be collected by educational institutions:

    236I. Collection of advance tax by educational institutions.— (1) There shall be collected advance tax from a person not appearing on the active taxpayers’ list at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.

    (2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.

    (3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.

    (4) The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.

    (5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.

    (6) Advance tax under this section shall not be collected from a person who is a non-resident and,—

    (i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

    (ii) furnishes a certificate that he has no Pakistan-source income; and

    (iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.

  • FBR advises taxpayers not to share financial information to fraudulent SMS

    FBR advises taxpayers not to share financial information to fraudulent SMS

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday advised taxpayers not to share their information of credit cards, banks and other financial accounts to fake and fraudulent SMS.

    “FBR does not send SMS to the taxpayers requesting for calling on specific numbers and asking for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts,” the FBR said.

    There are numerous attempts by individuals & groups to solicit personal information from unsuspecting users by employing social engineering techniques.

    Various SMS are crafted to appear as if they have been sent from a legitimate organization or known individual.

    These SMS often attempt to entice users to call at specific mobile numbers and are asked to provide personal information, such as account usernames and passwords, which can further expose them to future compromises.

    FBR never sends SMS on the taxpayer mobile numbers to obtain taxpayer’s banking information in lieu of facilitating a refund to the taxpayer or any other activity associated with an individual’s bank account are extremely dangerous with an intent to defraud the individual.

    FBR strictly advises the taxpayer from calling on the mobile number specified in the SMS and disclosing any information especially related to your bank accounts.

  • FBR warns return filers against incorrect information

    FBR warns return filers against incorrect information

    ISLAMABAD: Federal Board of Revenue (FBR) has warned individuals, who are return filers, against harsh action for providing incorrect information of taxable income.

    The FBR on Tuesday said that it had acquired vital information about the income and expenditure of filers and non-filers.

    The revenue board advised return filers to visit the official information portal to view details of undeclared income and assets details available with the database of the FBR.

    The FBR also advised the return filers to correct their information before any action under the law was initiated against individuals for hiding taxable income.

    The FBR said that income tax return filing is mandatory to those persons who had obtained National Tax Number (NTN). Therefore, such persons should file their returns to avoid penal action.

    The FBR asked unregistered paying withholding tax should also apply for registration and file their income tax return.

    It is important to note that the last date for filing income tax returns for the tax year 2020 is December 08, 2020. The date was already extended by the FBR from September 30, 2020.

    The FBR made it clear that no further extension would be granted beyond December 08, 2020.

  • Tax return filing reaches record high at 2.92 million

    Tax return filing reaches record high at 2.92 million

    ISLAMABAD: The filing of income tax return has reached a new high of 2.92 million following effective measures taken by the tax authorities to encourage persons having taxable income to file their return, according data released by Federal Board of Revenue (FBR) on Monday.

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  • Income tax rate on sale of petroleum products

    Income tax rate on sale of petroleum products

    The Federal Board of Revenue (FBR) has recently announced an update to the rate of income tax on the sale of certain petroleum products for the tax year 2021, spanning from July 01, 2020, to June 30, 2021.

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  • Advance tax rate on sale to retailers updated

    Advance tax rate on sale to retailers updated

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance income tax on sale to retailers during tax year 2021 (July 01, 2020 to June 30, 2020).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendment brought through Finance Act, 2020.

    The rate of collection of tax under section 236H on the gross amount of sales shall be:

    The rate of advance tax on sale of electronics shall be one percent. The rate of advance tax in case of sales to other goods shall be 0.5 percent.

    Following is the text of Section 236H of Income Tax Ordinance, 2001:

    236H. Advance tax on sales to retailers.— (1) Every manufacturer, distributor, dealer, wholesaler or commercial importer of electronics, sugar, cement, iron and steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to retailers, and every distributor or dealer to another wholesaler in respect of the said sectors, shall collect advance tax at the rate specified in Division XV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.

    (2) Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the retailer on the taxable income for the tax year in which the tax was collected.

  • FBR developing software to eliminate bogus invoices: CTO Chief

    FBR developing software to eliminate bogus invoices: CTO Chief

    KARACHI: Federal Board of Revenue (FBR) is working to develop a new software which will eliminate flying / bogus invoices, Dr. Aftab Imam, Chief Commissioner, Corporate Tax Office (CTO) Karachi said during his visit to Pakistan Hosiery Manufacturers Association (PHMA).

    The chief commissioner assured the exporters that all the issues of exporters will be resolved on top priority without delay, a statement issued by PHMA on Saturday quoted the chief commissioner as saying.

    The chief commissioner stated that exporters may personally visit his office to meet and discuss their individual issues in order to resolve them. He stated after transformation to FASTER plus, the sales tax refund system was efficiently processing the claims. There were certain checks in the system which was necessary.

    He said that CTO was playing its due role in policy making by communicating the matters and issues related to exporters by sending to the Board for implementation thereof.

    Commenting on the Post Refund Audit notices, he added that all the income tax notices issued bear a barcode while the Post Refund audit notices regarding sales tax bear no barcode, however, they are valid notices.

    The system is going through developmental phase and in next few weeks Post Refund Audit notices issued shall also reflect the barcode.

    Replying to huge demand of documents in the notices, he opined that particular documents which are not available in the online system like stock and proof of payment should be given.

    Responding to the requests of issuance of zero rated certificates, he informed that he has already written to FBR for the purpose. Upon confirmation, the requested certificates shall be issued on urgent basis.

    Earlier Tariq Munir, Chairman (SZ), Pakistan Hosiery Manufacturers & Exporters Association welcomed the Dr. Aftab Imam, Chief Commissioner, Corporate Tax Office (CTO) Karachi who was accompanied by Zulfiqar Khokhar, Collector to PHMA.

    Speaking on the occasion, Muhammad Jawed Bilwani, Chief Coordinator & Former Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association invited the attention of Chief Commissioner CTO-Karachi on burning issue of exporters related to Sales Tax Refund / Audit, Income Tax Refund / Audit, Zero Rated Certificate for reduced tariff of electricity and gas and other issues.

    He was of the view that after a lapse of 16 months, after various consultative sessions, suggestion of exporters, FASTER refund system has been improved and also transformed to FASTER plus which is appreciable as the system is efficiently processing the refunds electronically up to 80 percent without human involvement.

    Remaining 20 percent may have some issues of filing which after resolution shall also be processed on fast track.

    He was of the view that due to speedy refunds increasing trend in textile exports is witnessed. He stated that several members have informed that still amounts are missed and deferred in the FASTER system which should be looked into and rectified. He proposed that total missing amount should be reflected in the Sales Tax Refund MIS.

    Bilwani also highlighted the matter of Notices of Post Audit Refund of Sales Tax as well as Income Tax issued to exporters demanding huge documentation which is already available with FBR system and same should be done away with and only necessarily required relevant documents should be demanded because the entire textile export chain is documented.

    He also urged that all the FBR Notices should have barcodes and should sent electronically. The exporters should be provided the facility to apply for zero rated certificate regarding reduced tariff of gas and electricity to FBR and same should also be provided electronically.

    FBR and SRB system are linked and integrated. exporters are in practice to adjust WWF amount against income tax refund. Hence, the FBR should intimate to the SRB that the exporters have paid the WWF amount.

    On this occasion, Abdul Jabbar Gajiani, Senior Vice Chairman, Bashir Ghaffar Vice Chairman, Khizer Mehboob, Chairman, Taxation Committee, Abdur Rehman Former Vice Chairman PHMA, Saleem Parekh, Qadir Bilwani, Ilyas Gigi, Advocate Arshad Shehzad, Tax Advisor presented and other member exporters through zoom participated in the meeting.

  • Rate of tax on sale to distributors, dealers and wholesalers

    Rate of tax on sale to distributors, dealers and wholesalers

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance income tax on sale to distributors, dealers and wholesalers during tax year 2021 (July 01, 2020 to June 30, 2020).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendment brought through Finance Act, 2020.

    The FBR updated the rate of advance income tax on sale to distributors, dealers and wholesalers under Section 236G of Income Tax Ordinance, 2001.

    The rate of collection of tax under section 236G shall be at 0.7 percent on sale of fertilizers and 0.1 percent on sale of other than fertilizers/

    The text of section 236G is as follow:

    Section 236G. Advance tax on sales to distributors, dealers and wholesalers.—

    (1) Every manufacturer or commercial importer of electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to distributors, dealers and wholesalers, shall collect advance tax at the rate specified in Division XIV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.

    (2) Credit for tax collected under sub-section (1) shall be allowed in computing the tax due by the distributor, dealer or wholesaler on the taxable income for the tax year in which the tax was collected.

  • FBR issues procedure for oversight committee to settle cases

    FBR issues procedure for oversight committee to settle cases

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday issued procedure for assessment oversight committee for resolving cases of settlement filed against assessment notices.

    The FBR issued SRO 1184(I)/2020 to notify the rules. Previously, the FBR issued draft rules through SRO 957(I)/2020 dated October 02, 2020 to seek input from stakeholders.

    The FBR introduced Rule 231CA to the Income Tax Rules, 2002 for procedures for assessment oversight committee that shall apply to all cases of settlement filed under Section 122D (agreed assessment in certain cases) of Income Tax Ordinance, 2001.

    As per the rule, a settlement application shall be made electronically by the applicant in person or by his authorized representative, under Section 122D for agreed assessment of the committee on IRS web portal.

    A settlement application shall be preferred to the committee after the date of service of the notice issued under sub section (9) of Section 122 of the Ordinance and before finalization of assessment.

    The commissioner shall not conclude assessment proceedings under section 122 if an application, made against the notice issued under sub section (9) of section 122, lies pending before the committee.

    The committee, after examination of the contents of an application submitted by an applicant and facts stated therein and on scrutiny of requisitioned record, if any, shall afford opportunity of being heard to the applicant in writing.

    The committee shall finalize the applications filed under section 122D of the Ordinance within thirty days of receipt of application or within an extended period of sixty days, for reasons to be recorded in writing by the committee.

  • FBR issues rules to finalize return forms by January 31

    FBR issues rules to finalize return forms by January 31

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday amended rules under which annual income tax return form will be available on January 31 every year following the financial year to which the return relates.

    The FBR issued SRO 1185(I)/2020 to amend Income Tax Rules 2002. Previously, the FBR issued SRO 1041(I)/2020 dated October 13, 2020 to notify draft rules and invited suggestions from the stakeholders.

    The FBR introduced Rule 34A for making it mandatory that the annual income tax return form shall be available by January 31 every on IRIS portal and ready for filing by taxpayers.

    The text of the new rule 34A is as:

    34A. Time limit for notifying income tax return form:

    (1) This rule shall apply for the purpose of setting timelines in respect of various steps involved in notifying income tax return forms for a tax year.

    (2) The return form specified in sub rule (2) of rule 34 shall be notified for suggestions from all persons likely to be affected thereby on or before the first day of December of the financial year following the financial year to which the return relates by observing following timelines:

    (a) Inland Revenue Policy Wing shall identify the legal amendments to be incorporated in income tax return forms by thirty-first day of August of the financial year following the financial year to which the return relates;

    (b) preparation of change request form (CRF) shall be finalized by Inland Revenue Policy Wing and Information Technology Wing, in consultation with PRAL, by the fifteenth day of September of the financial year following the financial year to which the return relates;

    (c) analysis and scrutiny of the change request form (CRF) by Chief Income Tax Policy and Chief Business Domain Team shall be conducted by sixteenth day of September of the financial year following the financial year to which the return relates and the same shall be submitted to Member Inland Revenue Policy for approval on the same day;

    (d) PRAL shall complete configuration and development of the approved CRF by thirty first day of October of the financial year following the financial year to which the return relates; and

    (e) User Acceptance Test (UAT) of the amended return forms on testing environment shall be finalized by Inland Revenue Policy Wing and Information Technology Wing, in consultation with PRAL, by fifteenth day of November of the financial year following the financial year to which the return relates and the same shall be submitted to Member Inland Revenue Policy for approval on the same day.

    (3) The return form shall be remain available on the portal for suggestion till seventh day of January of the financial year following the financial year to which the return relates.

    (4) The final return form shall be notified on or before the thirty first day of January of the financial year following the financial year to which the return relates by observing following timelines:

    (a) Inland Revenue Policy Wing and Information Technology Wing shall review the suggestions received from stakeholders by twelfth day of January of the financial year following the financial year to which the return relates;

    (b) a new change request form, if required, shall be finalized by Inland Revenue Policy Wing and Information Technology Wing, in consultation with PRAL, by 15th day of January of the financial year following the financial year to which the return relates and the same shall be approved by Member Inland Revenue;

    (c) PRAL shall complete configuration and development of the approved CRF by 20th day of January of the financial year following the financial year to which the return relates;

    (d) User Acceptance Test (UAT) of the final return forms on testing environment shall be finalized by Inland Revenue Policy Wing and Information Technology Wing, in consultation with PRAL, by 25th day of January of the financial year following the financial year to which the return relates and the same shall be submitted to Member Inland Revenue Policy for approval;

    (e) final income tax return forms shall be available on IRIS by the thirty day of January of the financial year following the financial year to which the return relates;

    (f) in case, any further amendments are made in the financial year to which the return relates that have an impact on the finally notified income tax return forms referred to a clause (e), such amendments shall also be incorporated accordingly; and

    (g) notwithstanding anything contained in this rule, the time so specified may, if requested by the Member Inland Revenue Policy, be extended by the Board to such extent and subject to such conditions and limitations as it may deep proper.