KARACHI: Income Tax Ordinance, 2021 has explained the category of persons who are required to file income tax return for tax year 2022.
The Federal Board of Revenue (FBR) is set to issue finalized income tax return forms to start the filing process from July 01, 2022.
In this regard the FBR has already issued draft return forms and invited comments from stakeholders.
Section 14 of Income Tax Ordinance, 2001 has explained in detail about persons whom the annual return filing is mandatory. According to the Section:
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;
(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 2[(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; or
(x) is a resident person being an individual required to file foreign income and assets statement under section 116A.
(c) persons or classes of persons notified by the Board with the approval of the Minister in-charge.
(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.