CHAPTER 15 Flashcards
**
- Income tax authorities (Sec. 207]
- There shall be following Income Tax authorities:-
(a) Federal Board of Revenue (Board),
(b) Chief Commissioner Inland Revenue,
(c) Commissioner Inland Revenue,
(d) Commissioner Inland Revenue (Appeals);
(e) Officer of Inland Revenue
(1) Additional Commissioner Inland Revenue,
(ii) Deputy Commissioner Inland Revenue, (i) Assistant Commissioner Inland Revenue;
Who is required to file a return of income
?
The following persons are required to furnish a return of income for a tax year.
(1) every company:
(2) every person (other than a company) whose taxable income for the year exceeds Rs. 600,000
(3) **non-profit organization; **
(4) every person whose income for the year is **chargeable under final taxation **
(5) A person who,-
(1) has been paid tax in any of the** 2 preceding tax years: **
(2) claims a loss carried forward,
(3) owns **immovable property **with a **land
area of 500 square **yards or more
or
* ** owns any flat*
** located in:
1.areas falling in the municipal limits; or
2.areas in a Cantonment; or
.3.the Islamabad Capital Territory,
(iv) owns immoveable property in rating area with a land area of 500 square yards or more**
**(v) owns a flat in a rating area having covered area of 2,000 square feet or more;
(vi) owns a motor vehicle having engine capacity above 1,000 CC
(vii) has obtained National Tax Number or
(viii) holds commercial or industrial connection of electricity if annual bill exceeds Rs.500,000.
(ix) is a resident person registered with any:
1.Chamber of Commerce and Industry or
2.trade or business association or
3.market committee or
⚫ professional body including
1Pakistan Engineering Council,
2Pakistan Medical and Dental Council,
3 Pakistan Bar or any Provincial Bar Council,
4 Institute of Chartered Accountants of Pakistan or
5Institute of Cost and Management Accountants of Pakistan; or
(x)
is a resident individual required to file foreign income and assets statement (under section 116A).
persons or classes of persons notified by the Board (with the approval of the Minister in-charge)
Every individual whose income from business exceeds RS 300000 but does not exceed Rs 600000 in a tax year is also required to furnish return of income.*
Requirements for filing a return/When a return is considered as complete?
A RETURN OF INCOME
(1) shall be in the prescribed form and shall contain prescribed annexures and statements.
The Board may prescribe different returns for different classes of income or persons (including persons subject to final taxation).
(2) shall state all the relevant particulars including a declaration of the records kept;
(3) shall be signed by an individual and in other cases it shall be signed by person’s representative.
(4) shall contain evidence of payment of tax as per return.
(5) shall contain a wealth statement (u/s 116); and
(6) shall be accompanied with a foreign income and assets statement (as required under section 116A).
Is return filed electronically considered as correct under the law?
A return filed electronically on web or any computer readable media will also be treated as return. The Board may MAKE rules for
a
1. determining eligibility of the data of returns
2.E-intermediaries who will digitise the data of returns and transmit it to the Income Tax Department under their digital signatures and other matters relating to electronic filing.
Can Commissioner demand a return of income from a person for a period of less than 12 months ?
The Commissioner may give notice to a person to furnish a return for a period of less than 12 months, if-
(a) the person has died;
(b) the person has become bankrupt or gone into liquidation;
(c) the person is about to leave Pakistan permanently;
(d) the Commissioner otherwise considers it appropriate.
The return will be furnished by the due date specified in the notice.
Can Commissioner demand a return of income from a person?
If a person has not furnished return, Commissioner may, by notice, require him to file it within 30 days of date of service of notice. Commissioner may allow a longer period or shorter period.
For how many last completed tax years Commissioner can demand a return of income from a person ?
The above notice may be issued for any of last 5 completed tax years or assessment years: Further if a person has not filed return for any of the last 5 completed tax years, notice may be issued for one or more of the last 10 completed tax years.
The time limit provided above shall not apply if Commissioner is satisfied that a person who failed to furnish return has foreign income or owns foreign assets.
Can return once furnished be revised subsequently and what are the conditions attached thereto?
If a person discovers any omission or wrong statement in a return, he may revise it by fulfilling the following conditions:
(a) it is accompanied by the revised accounts or revised audited accounts. However Commissioner may waive this condition if he is satisfied that filing of these accounts is not necessary.
(b) the taxpayer files the reason for revision, in writing, signed by him,
approval is notre
(ba) it is accompanied by approval of the Commissioner, however approval is not required . if revised return is filled within 60 days of filing of return:
Further where the Commissioner has not passed an order of approval in writing, for revision of return, with in 60 days from the date revision was required, it will be assumed that Commissioner has given the approval.
Further no approval of the Commissioner is required if taxable income declared is more than or the loss declared is less than determined u/s 120. and under original retur
(c)
taxable income in revised return is greater than the income determined in previous order issued by tax or appellate authority (u/s 121,122,122A,129,132,or 133)and loss in revised return is less than loss determined in previous order issued by tax or appellate authority (u/s 121,122,122A,129,132,or 133).
If any of above condition is not fulfilled, the return shall be considered as an invalid. The mode and manner for seeking the revision shall be prescribed by the Board.
the commisioner shall grant approval in case of a genuine ommission or wrong statement .
Business bank account [Sec. 114A]
Business bank account [Sec. 114A]
(1) Every taxpayer shall declare to the Commissioner the **bank account utilized by the taxpayer **for busines transactions.
(2) Business bank account shall be declared through original or modified registration form.
3.”Business bank account” means a bank account utilized by the taxpayer for business transaction declared to the Commissioner through original or modified registration form.
Only businesses i.e. sole proprietor, AOP or companies are required to declare through FBR e-portal.
Note: Last date to declare business bank accounts is 30 September 2021
Legal implication for not declaring Business bank account
An expense incurred for business purpose shall be inadmissible while computing income from business u/s 21.
