Section 174 of Income Tax Ordinance, 2001 explains the taxpayers must maintain records in form of accounts or documents, of past six years.
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 174 of Income Tax Ordinance, 2001:
174. Records.— (1) Unless otherwise authorised by the Commissioner, every taxpayer shall maintain in Pakistan such accounts, documents and records as may be prescribed.
(2) The Commissioner may disallow or reduce a taxpayer’s claim for a deduction if the taxpayer is unable, without reasonable cause, to provide a receipt, or other record or evidence of the transaction or circumstances giving rise to the claim for the deduction.
(3) The accounts and documents required to be maintained under this section shall be maintained for six years after the end of the tax year to which they relate:
Provided that where any proceeding is pending before any authority or court the taxpayer shall maintain the record till final decision of the proceedings.
Explanation.— Pending proceedings include proceedings for assessment or amendment of assessment, appeal, revision, reference, petition or prosecution and any proceedings before an Alternative Dispute Resolution Committee”.
(4) For the purpose of this section, the expression “deduction” means any amount debited to trading account, manufacturing account, receipts and expenses account or profit and loss account.
(5) The Commissioner may require any person to install and use an Electronic Tax Register of such type and description as may be prescribed for the purpose of storing and accessing information regarding any transaction that has a bearing on the tax liability of such person.
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