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.
The FBR updated Active Taxpayers List (ATL) for tax year 2019 on the basis of returns filed up to November 08, 2020.
Previously, the FBR received 2.85 million, which was the record number of income tax returns for tax year 2018, according to a tax directory issued by the FBR last month for tax year 2018.
The FBR updates ATL on a weekly basis adding those income tax returns filed during a week.
The filing of annual income tax returns is mandatory for persons having taxable income or those required to file return on certain transactions or having assets.
The appearance of name on the ATL is subject to filing of return by due date or after due date with payment of penalty amount.
The benefit of appearance on the ATL is that a person can avail reduced rate of withholding tax, which is 100 percent higher on those persons not appearing on the ATL.
Under Section 114 of the Income Tax Ordinance, 2001 different class of persons and corporate entities are required to file their annual income tax returns. Following is the text of Section 114 of Income Tax Ordinance, 2001 (updated up to June 30, 2020):
114. Return of income.—(1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:
(a) every company;
(ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or
(ac) any non-profit organization as defined in clause (36) of section 2;
(ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;
(ae) every person whose income for the year is subject to final taxation under any provision of this Ordinance;
(b) any person not covered by clause (a), (ab), (ac) or (ad) who,—
(i) has been charged to tax in respect of any of the two preceding tax years;
(ii) claims a loss carried forward under this Ordinance for a tax year;
(iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;
(v) owns a flat having covered area of two thousand square feet or more located in a rating area;
(vi) owns a motor vehicle having engine capacity above 1000 CC;
(vii) has obtained National Tax Number; or
(viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;
(ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan;
(x) is a resident person being an individual required to file foreign income and assets statements under section 116A.
(1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.