by maosohail
The Federal Board of Revenue (FBR) has notified a group of taxpayers who are required to file income tax returns for the tax year 2023.
The filing of the income tax return for the 2023 tax period will end in September 2023. The obligation to file a tax return will be for salaried individuals, self-employed natural persons, associations of persons and companies falling into a special year. Companies that have a fiscal year will need to file their annual return for the 2023 tax year by 31 December 2023.
The following is an extract from the Income Tax Ordinance 2001 relating to the requirement to file an income tax return under Section 114.
§ 114. Obligation to submit an income tax return. — (1) In accordance with this regulation, natural persons falling under the following categories must file an income tax return for a given tax year:–
(a) All Companies;
(ab) Any individual (other than companies) whose chargeable income for a tax year exceeds the maximum tax-free limit under this Regulation for that particular year;
(ac) any not-for-profit organization as defined in subsection (36) of section 2;
(ae) all natural persons whose income for a tax year is subject to final taxation under any provision of this Ordinance;
(b) Any person not covered by clauses (a), (ab), (ac) or (ad) who falls into any of the following categories:
(i) was liable to pay tax for any two previous tax years;
(ii) claims a loss carried forward in accordance with the provisions of this Ordinance for a given tax year;
(iii) owns immovable property of 500 square yards or more or owns a flat situated within the city limits existing before the enactment of the Local Self-Government Acts in the provinces, cantonment areas or in the capital city of Islamabad;
(iv) own real property of 500 square yards or more located in the rating area;
(v) own dwelling with a floor area of 2,000 square feet or more located in the rating area;
(vi) Own a motor vehicle with an engine capacity greater than 1000 CC;
(vii) obtained a national tax number; or
(viii) holds a commercial or industrial electricity connection with an annual bill of more than PKR 500,000;
(ix) is a resident registered with any Chamber of Commerce and Industry, trade or business association, market committee or 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 the Institute of Cost and Management Accountants of Pakistan; or
(x) Is a resident natural person required to file a statement of foreign income and assets pursuant to Section 116A.
(c) The Committee may notify specific individuals or groups of individuals if approved by the responsible Minister.
(1A) Individuals with income in the category of “Income from business” which is more than three hundred thousand rupees but less than four hundred thousand rupees in a tax period shall file a tax return for that year.
(2) Return of income –
(a) must be in the prescribed form and must be accompanied by such attachments, declarations or documents as may be prescribed:
Provided that the Board may prescribe different returns for different classes of income or persons including persons liable to final taxation;
(b) set out in full all relevant particulars or information set out in the return form, including a statement of the records kept by the taxpayer;
(c) must be signed by a person who is a natural person or, if section 172 applies, by his agent;
d) attach proof of payment of the tax due according to the income declaration;
(e) must be accompanied by a statement of assets as required by section 116; and
f) must be accompanied by a statement of foreign income and assets as required by § 116A.
(2A) If an individual files a return of income electronically by means of the internet, magnetic medium or other computer-readable medium specified by the board, it shall be deemed to be a valid return under subsection (1). The Board has the power to make rules to be published in the Official Gazette to determine the eligibility of the data in these returns, as well as the electronic intermediaries who will digitize the data and transmit it electronically to the Income Tax Department under their digital signatures. These rules will also deal with other matters related to the electronic submission of returns, statements or documents.
(3) The Commissioner is authorized to call on a person or his representative in writing to submit an income tax return within a certain period of time for a period of less than twelve months, if the following conditions are met:
a) the person died;
b) the person found himself in bankruptcy or went into liquidation;
(c) the person is about to leave Pakistan permanently;
e) the commissioner otherwise considers it appropriate to require the submission of such a return.
(4) The Commissioner may issue a written summons for any person who, in the opinion of the Commissioner, should file an income tax return for a tax period or assessment year under this section but fails to do so, to file a return within thirty days. on receipt of notification. The commissioner can specify a longer or shorter deadline for submitting the return in the call or extend the deadline. However, this provision is subject to subsection (5).
(5) The Commissioner is authorized to issue a notice under subsection (4) for one or more of the last five completed tax periods or assessment years. However, if the person has not filed a tax return for any of the last five completed tax periods, the notification may relate to one or more of the last ten completed tax periods. This deadline does not apply if the commissioner is satisfied, based on recorded reasons, that the person did not file a return because of foreign income or ownership of foreign property.
(6) An individual who has filed a return and subsequently discovers any omission or misstatement in the return may file a corrected return subject to the following conditions and subsection (6A):
a) Corrected accounts or possibly revised audited accounts must be attached to the revised return. However, the Commissioner may waive this condition if he is satisfied that the submission of revised accounts or audited accounts is not necessary;
b) The taxpayer must provide in writing the reasons for revising the return, which should be duly signed and submitted together with the revised return;
(ba) The revised return must be accompanied by the commissioner's written approval of the revision of the return; and
(c) The taxable income recognized shall not be less than, and the loss recognized shall not exceed, the income or loss, as the case may be, determined by an order made under section 121, 122, 122A, 129, 132, 133 or 221.
If any of the above conditions are not met, the return delivered will be considered invalid and will be treated as if it had not been submitted. However, the condition referred to in paragraph (ba) shall not be applicable if the amended return is filed within sixty days of the first filing.
In addition, if the Commissioner has not given written consent to the revision of the return within sixty days of the application, the consent required by clause (ba) shall be deemed to have been given by the Commissioner and the condition referred to in clause (ba) shall not apply.
If any of the following circumstances occur, the condition referred to in clause (ba) shall not apply and the consent required shall be deemed to have been granted by the Commissioner:
a) if the commissioner has not given written consent to the revision of the tax return within sixty days from the date of the revision request
b) or if the declared taxable income exceeds the income determined pursuant to Section 120 or the declared loss is lower than the loss determined pursuant to Section 120:
In addition, the commissioner is required to grant approval in the event of an actual omission or misrepresentation
(6A) If the taxpayer, upon discovering a failure to pay tax or attempted tax evasion, voluntarily submits a corrective return and pays the necessary amount of tax and late fee before receiving a notice pursuant to § 177 or paragraph 9 122, they are not subject to any penalty.
If the taxpayer deposits the amount of tax fixed by the Commissioner during the inspection or before receiving a notice under sub-section (9) of section 122, he shall deposit the amount of tax by which he is to be abated, the default surcharge and twenty-five per cent of the penalty imposed under the Ordinance along with the revised return.
In addition, if a taxpayer revises a return after receiving a show cause notice under sub-section (9) of section 122, he shall pay the amount of tax to be deducted, late payment surcharge and fifty percent of the fines leviable under the Ordinance. along with the revised return. After this action, the case notification will be invalid.
(7) Unless the contrary is proved, any return which appears to have been made or signed by or on behalf of a person shall be deemed to have been duly made by or with the authority of that person.
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