Tag: gifts

  • Gift parcels above $5000 not allowed for export

    Gift parcels above $5000 not allowed for export

    ISLAMABAD: The ministry of commerce has recently issued Export Policy Order 2020 under which export of gift parcels of a value exceeding five thousand US dollars are not allowed.

    The ministry issued SRO 901(I)/2020 dated September 25, 2020 and explained export of goods allowed under the policy.

    Export of goods

    (1) Export of all goods shall be allowed except those specified in Schedule-I.

    (2). Notwithstanding anything contained in sub-paragraph (1), no goods should be allowed to be exported to India, except therapeutic products regulated by the Drug Regulatory Authority of Pakistan.

    (3). Export of goods specified in Schedule – II shall be subject to the conditions given therein.

    (4) The provisions of this Order shall not apply to-

    (a) any goods constituting the stores or equipment or machinery parts and kitchenette of any outgoing vessel, conveyance or airline or the bona-fide accompanied baggage of the crew or of the passengers in such vessel or conveyance or airline:

    Provided that banned or restricted items shall not be allowed unless otherwise authorized;

    (b) any goods trans-shipped at a port in Pakistan after having been manifested for such trans-shipment at the time of dispatch from a port outside Pakistan:

    Provided that goods mentioned in clauses (a) to (h) do not contain control lists commodities, which are subject to licence from Strategic Export Control Division, Ministry of Foreign Affairs;

    (c) any goods, stores or equipment when sold abroad on Government-to-Government basis or exported under an export authorization issued by any officer authorized by the Ministry of Defense in this behalf;

    (d) export of samples subject to the following conditions, namely: –

    (i) that the export of such goods is not banned; and

    (ii) any number of samples subject to the condition that their freight on board (F.O.B) value does not exceed twenty-five thousand US dollars or equivalent per exporter per annum except automobile manufacturers who may export samples for free on board value not exceeding one hundred thousand US dollars and pharmaceutical exporting companies which may export free samples to the extent of ten percent of the commercial exports quantity of preceding year. However, pharmaceutical exporting companies may export free samples to the extent of twenty per cent of the quantity of first consignment at the time of launch of a product:

    Provided that the monetary limit of twenty-five thousand US dollars shall not be applicable if the samples are exported in a mutilated form;

    (e) export of gift parcels, except banned or restricted, of a value not exceeding five thousand US dollars or equivalent in Pakistani Rupees;

    (f) export of relief goods to any part of the world by National Disaster Management Authority;

    (g) bona fide baggage of persons traveling outside Pakistan; and

    (h) persons traveling outside Pakistan may take with them as accompanied baggage, goods without any restriction of quantity, or any requirement of encashment certificates provided that such goods do not include items listed in Schedule I and that in respect of items of Schedule II, the prescribed conditions have been met with.

    (5) Transit and border trade shall be allowed under the procedure prescribed for that purpose:

    Provided that items falling under export control on goods, technologies, material and equipment related to the Nuclear and Biological Weapons and Their Delivery Systems Act, 2004 (V of 2004) shall not be allowed unless authorized.

  • Cash gifts received without banking channel chargeable to tax

    Cash gifts received without banking channel chargeable to tax

    ISLAMABAD: Any cash gift received by a person other than banking channel will be treated as chargeable to tax, sources in Federal Board of Revenue (FBR) said on Thursday.

    The sources said that in the past people were taking advantage of incentives granted on gifts and concealed their income to evade taxes.

    However, the change in the law through last budget those people will no more dodge the tax authorities of claiming gift from their relatives and evade taxes.

    The FBR had conducted an analysis of income tax returns filed in previous years, which showed that huge amount of non recurring receipts from un-related persons are transferred in the garb of gifts to avoid incidence of taxation.

    The sources said that in order to discourage this practice of undisclosed receipts, Section 39 of Income Tax Ordinance, 2001 had been amended through Finance Act, 2019.

    The amendment enabled the tax authorities to include any amount or fair market value of any property received by a person without consideration or received as a gift in income under the head ‘income from other sources.’

    However, gift received from grandparents, parents, spouse, brother, sister, son or a daughter shall not be included in such income.

    The new income provision is subject to sub-section 3 of Section 39 which states that an amount received by a person otherwise than by a cross cheque drawn on a bank or through a banking channel from a person holding a National Tax Number (NTN) shall be treated as income chargeable to tax under the head ‘income from other sources’.

    This means that the gift received by a person is chargeable to tax if gift is not received from grandparents, parents, spouse, brother, sister, son or a daughter of the recipient.

    However, even if cash gift is received from the relations mentioned above but the same has not be received through cross cheque or banking channel, as the case may be, the amount of gift will still be added in income chargeable to tax under the head, income from other sources.