FBR excludes salary persons from audit selection

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued Audit Policy 2018 and excluded salary persons from selection of audit.

The following exclusions have been identified and approved by the Board under relevant rules where selection for audit by the Board is not required.

Income Tax

i. All cases already selected for audit by the Commissioners Inland Revenue or Director I&I (IR) under section 177 of the Income Tax Ordinance for any of the preceding three Tax Years i.e 2014, 2015, 2016

ii. All cases already selected for audit under section 214D of the Income Tax Ordinance, 2001, for any of the preceding three Tax Years i.e 2014, 2015, 2016

iii. All cases where income chargeable to tax under the head salary exceeds 50% of taxable income, except cases having business income. Directors of companies do not qualify for this exclusion.

iv. All cases where entire income is covered under Final Tax Regime (FTR)

Sales Tax

All cases already selected under section 25 and 38 of Sales Tax Act, 1990 by the Commissioner Inland Revenue or Director I&I (IR) for tax periods corresponding to the accounting period adopted for the purpose of return of income under the Income Tax Ordinance, 2001 for Tax Year 2016

Provided that where only a part of the said accounting period had been audited already, the relevant authority may select the remaining period for audit.

ii. All cases already selected for audit under section 72B through computer ballot held under Taxpayers’ Audit Policy, 2017

iii. All cases of Steel Melters and Steel Re-rollers who are paying sales tax under the Sales Tax Special Procedure Rules, 2007.

iv. Federal, Provincial and Local Government Departments.

Federal Excise

i. All cases already selected under section 46 of the Federal Excise Act, 2005 by the Commissioner Inland Revenue or Director I&I (IR) for tax periods corresponding to the accounting period adopted for the purpose of return of income under the Income Tax Ordinance, 2001 for tax year 2016.

Provided that where only a part of the said accounting period had been audited already, the relevant authority may select the remaining period for audit.

ii. All cases already selected for audit under section 42B through computer ballot held under Taxpayers’ Audit Policy, 2017

iii. Federal, Provincial and Local Government Department.

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