Tag: Income Tax Ordinance 2001

In a move to streamline the process of disclosing undisclosed assets, expenditure, and sales, Section 120B of the Income Tax Ordinance, 2001 has outlined specific limitations on proceedings under the Assets Declaration Act, 2019.

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Section 120 of the Income Tax Ordinance, 2001 explains the assessment on the taxpayer declaring the complete income tax return.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following is the text of Section 120 of Income Tax Ordinance, 2001:

120. Assessments.—(1) Where a taxpayer has furnished a complete return of income (other than a revised return under sub-section (6) of section 114) for a tax year ending on or after the 1st day of July, 2002,—

(a) the Commissioner shall be taken to have made an assessment of taxable income for that tax year, and the tax due thereon; and

(b) the return shall be taken for all purposes of this Ordinance to be an assessment order issued to the taxpayer by the Commissioner on the day the return was furnished:

Provided that until the date specified under the fourth proviso to sub-section (2A) is notified, this subsection shall be in force as if sub-section (2A) is not in operation:

Provided further that once the date under the fourth proviso to sub-section (2A) is notified, clauses (a) and (b) shall only apply when the provisions of sub-section (2A), if invoked, are first complied with:

Provided further once compliance is made under the second proviso,—

(i) the adjusted amount under sub-section (2A) shall be construed to be the tax payable and due under clause (a); and

(ii) the date of the compliance under sub-section (2A) shall be the date for the purposes of clause (b).

(1A) Notwithstanding the provisions of sub-section (1), the Commissioner may conduct audit of the income tax affairs of a person under section 177 and all the provisions of that section shall apply accordingly.

(2) A return of income shall be taken to be complete if it is in accordance with the provisions of sub-section (2) of section 114.

(2A) A return of income furnished under sub-section (2) of section 114 shall be processed through automated system to arrive at correct amounts of total income, taxable income and tax payable by making adjustments for-

(i) any arithmetical error in the return;

(ii) any incorrect claim, if such incorrect claim is apparent from any information in the return;

(iii) disallowance of any loss, deductible allowance or tax credit under Parts VIII, IX and X respectively of Chapter III; and

(iv) disallowance of carry forward of any loss under clause (b) of sub-section (I)of section 182A:

Provided that no such adjustments shall be made unless a system generated notice is given to the taxpayer specifying the adjustments intended to be made:

Provided further that the response received from the taxpayer, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such notice, adjustments shall be made.

Provided also that where no such adjustments have been made within six month of filing of return, the amounts specified in the return as declared by the taxpayer shall be deemed to have been taken as adjusted amounts on the day the return was filed and the taxpayer shall be intimated automatically through Iris:

Provided also that the provisions of this sub-section shall apply from the date notified by the Federal Board of Revenue in the official Gazette.

(3) Where the return of income furnished is not complete, the Commissioner shall issue a notice to the taxpayer informing him of the deficiencies (other than incorrect amount of tax payable on taxable income, as specified in the return, or short payment of tax payable) and directing him to provide such information, particulars, statement or documents by such date specified in the notice.

(4) Where a taxpayer fails to fully comply, by the due date, with the requirements of the notice under sub-section (3), the return furnished shall be treated as an invalid return as if it had not been furnished.

(5) Where, in response to a notice under sub-section (3), the taxpayer has, by the due date, fully complied with the requirements of the notice, the return furnished shall be treated to be complete on the day it was furnished and the provisions of sub-section (1) shall apply accordingly.

(6) No notice under sub-section (3) shall be issued after the expiry of one hundred and eighty days from the end of the financial year in which return was furnished, and the provisions of sub-section (1) shall apply accordingly.

For the purposes of this section,-

(a) “arithmetical error” includes any wrong or incorrect calculation of tax payable including any minimum or final tax payable.

(b) “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,-

(i) of an item, which is inconsistent with another entry of the same or some other item in such return;

(ii) regarding any tax payment which is not verified from the collection system; or

(iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction.

(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Section 119 of Income Tax Ordinance, 2001 has explained the procedure for obtaining an extension of time for furnishing returns and other documents.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following is the text of Section 119 of Income Tax Ordinance, 2001:

119. Extension of time for furnishing returns and other documents.— (1) A person required to furnish —

(a) a return of income under section 114 or 117;

(d) a wealth statement under section 116,

may apply, in writing, to the Commissioner for an extension of time to furnish the return, or statement, as the case may be.

(2) An application under sub-section (1) shall be made by the due date for furnishing the return of income, or statement to which the application relates.

(3) Where an application has been made under sub-section (1) and the Commissioner is satisfied that the applicant is unable to furnish the return of income, or statement to which the application relates by the due date because of —

(a) absence from Pakistan;

(b) sickness or other misadventure; or

(c) any other reasonable cause,

the Commissioner may, by order, in writing, grant the applicant an extension of time for furnishing the return, or statement, as the case may be.

(4) An extension of time under sub-section (3) should not exceed fifteen days from the due date for furnishing the return of income, employer’s certificate, or statement, as the case may be, unless there are exceptional circumstances justifying a longer extension of time:

Provided that where the Commissioner has not granted extension for furnishing return under sub-section (3) or sub-section (4), the Chief Commissioner may on an application made by the taxpayer for extension or further extension, as the case may be, grant extension or further extension for a period not exceeding fifteen days unless there are exceptional circumstances justifying a longer extension of time.

(6) An extension of time granted under sub-section (3) shall not, for the purpose of charge of default surcharge under sub-section (1) of section 205, change the due date for payment of income tax under section 137.

(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

How to file returns and other documents has been resolved by the Federal Board of Revenue (FBR) to facilitate taxpayers of Pakistan.

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Section 117 of the Income Tax Ordinance, 2001 stated that any person discontinuing a business shall give the commissioner a notice in writing to that effect within 15 days of the discontinuance.

 The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following is the Section 117 of the Income Tax Ordinance, 2001:

117. Notice of discontinued business.— (1) Any person discontinuing a business shall give the Commissioner a notice in writing to that effect within fifteen days of the discontinuance.

(2) The person discontinuing a business shall, under the provisions of this Ordinance or on being required by the Commissioner by notice, in writing, furnish a return of income for the period commencing on the first day of the tax year in which the discontinuance occurred and ending on the date of discontinuance and this period shall be treated as a separate tax year for the purposes of this Ordinance.

(3) Where no notice has been given under sub-section (1) but the Commissioner has reasonable grounds to believe that a business has discontinued or is likely to discontinue, the Commissioner may serve a notice on the person who has discontinued the business or is likely to discontinue the business to furnish to the Commissioner within the time specified in the notice a return of income for the period specified in the notice.

(4) A return furnished under this section shall be treated for all purposes of this Ordinance as a return of income, including the application of Section 120.

(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Section 116A of the Income Tax Ordinance, 2001 explains that a resident taxpayer having a foreign income is required to file a wealth statement.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following is the text of Section 116A of the Income Tax Ordinance, 2001:

116A. Foreign income and assets statement.– (1) Every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement, hereinafter referred to as the foreign income and assets statement, in the prescribed form and verified in the prescribed manner giving particulars of—

(a) the person’s total foreign assets and liabilities as on the last day of the tax year;

(b) any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and

(c) complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.

(2) The Commissioner may by a notice in writing require any person being an individual who, in the opinion of the Commissioner on the basis of reasons to be recorded in writing, was required to furnish a foreign income and assets statement under sub-section (1) but who has failed to do so to furnish the foreign income and assets statement on the date specified in the notice.

(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Section 116 of Income Tax Ordinance, 2001 explained the requirement of filing wealth statement by any person being an individual.

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The Federal Board of Revenue (FBR) has clarified the provisions of Section 115 of the Income Tax Ordinance, 2001, shedding light on specific categories of individuals who are exempted from the requirement of filing a return of income under the tax law.

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Section 114A of Income Tax Ordinance, 2001 mandates the requirement that every taxpayer declare to the Commissioner the bank account used for business transactions.

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Requirement of filing income tax return by persons in a tax year has been unveiled by the Federal Board of Revenue (FBR).

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