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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.

  • Determination of fair market value explained

    Determination of fair market value explained

    KARACHI: The fair market value of assets shall be the value of property in open market at the time of purchase, sources in Federal Board of Revenue (FBR) said.

    The FBR sources said that Section 68 of Income Tax Ordinance, 2001 explained the methodology for determining the fair market value.

    Section 68: Fair market value

    Sub-Section (1): For the purposes of this Ordinance, the fair market value of any property or rent, asset, service, benefit or perquisite at a particular time shall be the price which the property 2[or rent], asset, service, benefit or perquisite would ordinarily fetch on sale or supply in the open market at that time.

    Sub-Section (2): The fair market value of any property or rent, asset, service, benefit or perquisite shall be determined without regard to any restriction on transfer or to the fact that it is not otherwise convertible to cash.

    Sub-Section (3): Where the price “other than the price of immoveable property” referred to in sub-section (1) is not ordinarily ascertainable, such price may be determined by the Commissioner.

    Sub-Section (4): Notwithstanding anything contained in sub-sections (1) and (3), the Board may, from time to time, by notification in the official Gazette, determine the fair market value of immovable property of the area or areas as may be specified in the notification.

    Sub-Section (5): Where the fair market value of any immovable property of an area or areas has not been determined by the Board in the notification referred to in sub-section (4), the fair market value of such immovable property shall be deemed to be the value fixed by the District Officer (Revenue) or provincial or any other authority authorized in this behalf for the purposes of stamp duty.

    (6) In respect of immovable property—

    (i) component A of the formula in sub-section (2) of section 37;

    (ii) consideration received as mentioned in Division X of Part IV of First Schedule;

    (iii) value of immovable property as mentioned in Divisions XVIII of Part IV of the First Schedule; and

    (iv) valuation for the purposes of section 111,shall not be less than the fair market value as determined under sub-section (4) or (5).

    Explanation.—(1)For the removal of doubt, it is clarified that the fair market value as determined under sub-section (4) or(5) shall be for carrying out the purposes of this Ordinance only.

    (2) It is further clarified that for the purposes of clauses (i) to (iv) of this sub-section if the fair market value determined under sub-section (4) or (5) is different than the auction price the applicable price shall be the higher of the two.

  • Another key FBR official granted 12-day leave

    Another key FBR official granted 12-day leave

    The Federal Board of Revenue (FBR) is once again in the spotlight as another key official, Ms. Seema Shakil, a BS-21 officer of Inland Revenue Service, has been granted a 12-day leave.

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  • No rift in economic team: FBR

    No rift in economic team: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has strongly rebuffed the reports about rifts in government economy team and due to this the chairman of the revenue authority is on leave.

    The FBR in a statement on Monday said that FBR chairman Shabbar Zaidi is on a two weeks leave which is going to end this Friday.

    He is likely to resume office on Monday and his first day business will include Prime Ministers interaction with all Pakistan traders.

    The leave of Chairman FBR was necessisated by his annual medical check up in Karachi and some family commitments.

    The Chairman as a part of economic team of the prime minister enjoys full confidence of the Prime Minister and his Advisor on Finance.

    “Any rumours of any sort of rift in the economic team are utterly incorrect,” the FBR said.

  • Advance tax on purchase of immovable property to be paid on fair market value

    Advance tax on purchase of immovable property to be paid on fair market value

    KARACHI: Federal Board of Revenue (FBR) will collect advance income tax on sale of immovable properties on the basis of fair market value.

    Sources in FBR said that the purchaser of immovable property shall make payment of advance tax income tax on the amount determined at fair market value not on the DC value or valuation tables notified by the FBR.

    Under Section 236K of Income Tax Ordinance, 2001, advance tax on purchase or transfer of immovable property.

    (1) Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.

    Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society and registrar of properties.

    (2)The advance tax collected under sub-section (1) shall be adjustable.

    (3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.

    (4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis:

    “Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”

    The rate of tax to be collected under section 236K shall be 1 percent of the fair market value from a person appeared on Active Taxpayers List (ATL). The rate shall be at two percent of the fair market value from persons not appearing on the ATL.

  • Tax return to be valid on submission of information

    Tax return to be valid on submission of information

    KARACHI: Submission of relevant particulars or information shall make a return of income a valid document.

    Officials at Federal Board of Revenue (FBR) said that taxpayers should ensure making all relevant entries before filing income tax return in order to avoid hassle at the time of scrutiny,

    They said that although the tax authorities treated the income tax return as assessment order when it is filed to the FBR’s portal. However, when it is selected under defined parameters or identification of any concealment the missing entries can make problems for taxpayers, they added.

    The officials also said that a taxpayer should also ensure the payment of tax as calculated on the basis of tax chart for the relevant year for which the return is filed.

    They said that a return of income –

    (a) shall be in the prescribed form and shall be accompanied by such annexures, statements or documents as may be prescribed;

    (b) shall fully state all the relevant particulars or information as specified in the form of return, including a declaration of the records kept by the taxpayer;

    (c) shall be signed by the person, being an individual, or the person’s representative where section 172 applies;

    (d) shall be accompanied with evidence of payment of due tax as per return of income;

    (e) shall be accompanied with a wealth statement as required under section 116; and

    (f) shall be accompanied with a foreign income and assets statement as required under section 116A.

  • PM to announce tax relief package for traders on January 20

    PM to announce tax relief package for traders on January 20

    ISLAMABAD: Prime Minister Imran Khan is set to unveil a tax relief package for traders on January 20, 2020, as confirmed by Syed Shabbar Zaidi, the chairman of the Federal Board of Revenue (FBR), on Saturday.

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  • Desk audit recommended for increasing amount paid with returns

    Desk audit recommended for increasing amount paid with returns

    ISLAMABAD: The Federal Board of Revenue (FBR) has expressed concerns over lower than expected tax payment with return despite significant increase in return filing, a report said.

    A FBR report said that the trend for filing of income tax returns had not been satisfactory in Pakistan.

    Keeping in view very low compliance, FBR had initiated a Broadening of Tax Base (BTB) drive few years back, which had not started paying dividends in shape of growth in the number of filers.

    The income tax returns which were just 1.5 million in Tax Year 2016 have crossed the two million mark first time in the history of FBR.

    During Tax Year 2017 the number of income tax filers reached to 1.9 million and in Tax Year 2018 2.2 million.

    During TY 2018 the number of return filers increased by 17.1 percent or 316,526 in absolute terms.

    This performance in terms of number of returns is satisfactory but payment with returns has a meager growth of 3 percent, which is the matter of concern.

    The desk audit of filed returns can be helpful increasing the amount paid with returns.

  • No advance tax on domestic electricity consumers on billed amount below Rs75,000

    No advance tax on domestic electricity consumers on billed amount below Rs75,000

    KARACHI: The domestic consumers of electricity whose monthly billed amount is below Rs75,000 are not liable to pay advance income tax.

    According to Section 235A of Income Tax Ordinance, 2001, the domestic electricity consumers are subject to payment of advance income tax, officials of Federal Board of Revenue (FBR) said.

    As per tax rate, a domestic consumer is liable to pay 7.5 percent advance income tax in case of above monthly bill is Rs75,000 or above.

    However, there is zero percent advance income tax in case the monthly billed amount is below Rs75,000.

    Section 235A. Domestic electricity consumption.-

    (1) There shall be collected advance tax at the rates specified in Division XIX of Part IV of the First Schedule on the amount of electricity bill of a domestic consumer.

    Explanation.— For removal of doubt, it is clarified that for the purposes of this section, electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.

    (2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.

    (3) Tax collected under this section shall be adjustable against tax liability.

  • FBR extends date for filing sales tax, federal excise return

    FBR extends date for filing sales tax, federal excise return

    The Federal Board of Revenue (FBR) announced on Friday an extension for filing sales tax and federal excise returns for November 2019. Taxpayers now have until January 13, 2020, to submit their returns.

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  • FBR may fix Rs20,000 per year as income tax for shopkeepers

    FBR may fix Rs20,000 per year as income tax for shopkeepers

    ISLAMABAD: Federal Board of Revenue (FBR) likely to fix an amount of Rs20,000 per year as income tax for shopkeepers operating business in a covered area up to 150 square feet.

    This fixed rate shall be for shopkeepers not in categorized areas.

    Sources in FBR said that the fixed tax rates likely to be for area up t 150 square feet and for area above 150 square feet and less than 300 square feet. The rate of tax will be different for category A shopkeepers and other than this category shopkeepers.

    A person having shop with area of up to 150 square feet in category A area than the tax rate shall be Rs35,000.

    A person having shop with covered area above 150 square feet and not exceeding 300 square feet and located in other than category A the fixed tax likely be Rs25,000.

    Meanwhile, a person having shop with covered area above 150 square feet and not exceeding 300 square feet and located in a category area A the fixed tax shall be Rs40,000 per year.

    The sources said that there shall be an option to small shopkeepers to pay two percent as income tax of the turnover.

    The sources said that the FBR has finalized income tax return form tax year 2019 for small shopkeepers. This form shall be simple and one-page as committed by the FBR.

    Following is the draft income tax return form for retailers. The draft from has not been issued officially. The sources said that there may be changes in the final format to be issued by the FBR.