Arham Law Associates

🚨 Attention! 🚨

Don't wait until the last minute! The deadline for filing your tax return is just around the corner, on September 30, 2023. 📅 Make sure you file your return before the due date to avoid any penalties or complications.

For assistance with your tax return or any questions you may have, feel free to contact Arham Law Associates at 📞 0311-1650427. We're here to help you navigate the process smoothly and efficiently.

Take action now and ensure a stress-free tax season! 💼💰

Karachi, September 20, 2023 – The Federal Board of Revenue (FBR) has embarked on a vigorous campaign, imploring citizens to promptly file their income tax returns as the looming deadline of September 30, 2023, approaches.

With just 10 days left for taxpayers, including salaried individuals, business owners, Associations of Persons (AOPs), and companies with special accounting years, the FBR has stepped up its efforts to ensure compliance.

The FBR has adopted a multi-pronged approach to remind taxpayers of their obligations. One of the strategies employed is sending SMS notifications to registered mobile phones of individuals who have filed their income tax returns in previous years. Simultaneously, registered email addresses are being utilized to convey the importance of fulfilling their national duty through tax compliance.

Despite the FBR’s efforts to streamline the process, some tax practitioners have raised concerns about the newly upgraded IRIS 2.0 return filing portal. The Pakistan Tax Bar Association (PTBA) and other affiliated tax bars have voiced various issues related to the portal’s functionality. However, the FBR remains steadfast in its assertion that the portal is functioning seamlessly and that taxpayers are successfully filing their returns through it.

Official sources within the FBR have clarified that there will be no extension of the filing deadline beyond September 30, 2023. Instead, the organization has devised plans to impose penalties on those who fail to comply. Unlike previous years, the FBR has issued income tax return forms promptly this year, providing citizens with a statutory three-month window for filing their tax returns.

This stern stance by the FBR underscores the urgency of tax compliance and the need for taxpayers to act promptly to meet the upcoming deadline. With penalties on the horizon, it is imperative for all eligible individuals and entities to ensure their returns are filed correctly and on time to avoid any legal consequences.

As the deadline draws nearer, the FBR’s campaign is expected to intensify, further emphasizing the importance of timely and accurate income tax return submissions. Citizens are encouraged to use the upgraded portal, IRIS 2.0, and seek assistance from tax professionals if needed to ensure compliance with tax regulations.

Just 10 days left hurry up to file your income tax return for the year we are next to your door to provide services in filing of return of your income........

The Federal Board of Revenue (FBR) has announced strict measures to ensure that businesses display their National Tax Numbers (NTNs) and tax licenses prominently. Those failing to comply will face financial penalties.

Sources within the Federal Board of Revenue revealed that the display of NTN or tax licenses has now become mandatory for all businesses. According to the Income Tax Ordinance of 2001 and the accompanying regulations, any individual or entity not displaying their NTN or business license at their place of business will be subject to a penalty of five thousand rupees.

Section 181C of the Income Tax Ordinance, 2001, elaborates on the requirement for individuals deriving income from taxable businesses to prominently display their National Tax Number at every location of their business.

Furthermore, the provisions for business licenses are explained under Section 181D of the same ordinance. According to this section, any person engaged in a business, profession, or vocation must obtain and prominently display a business license as specified by the FBR.

In case an individual fails to obtain a business license, the Commissioner is empowered to impose a fine, which may vary depending on the circumstances:

Twenty thousand Rupees for taxpayers deriving income subject to tax under this ordinance.

Five thousand Rupees for all other cases.

Additionally, the Commissioner has the authority, through a written order, to cancel a business license issued under sub-section (1) under specific conditions, including:

(a) Failure to report changes in particulars within thirty days of such changes.

(b) Conviction of any offense under any federal tax law.

The FBR’s move to enforce these regulations aims to enhance transparency and compliance among businesses, ensuring a fair and effective tax system. Business owners are urged to adhere to these requirements to avoid penalties and maintain legal compliance with tax laws.

For more information and guidance regarding the display of NTNs and business licenses, individuals and businesses are encouraged to contact the Federal Board of Revenue.

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🇵🇰 **New Tax Guidelines for Salary Income in Pakistan!** 📊

📅 August 21, 2023

📍 Islamabad

The Federal Board of Revenue (FBR) has just unveiled the latest regulations for taxing salary income in Pakistan, effective from July 1, 2023. These guidelines shed light on the taxation framework for individuals' earnings from employment. Here's what you need to know:

📌 **Key Points from Section 12 of the Income Tax Ordinance, 2001:**

1️⃣ **Taxable Salary:** Any salary earned by an employee in a tax year, not exempt from taxation, falls under the 'Salary' category and is subject to tax.

2️⃣ **Definition of Salary:** The term 'Salary' encompasses various forms of remuneration like regular pay, bonuses, overtime, commissions, and more. It also includes perquisites, allowances (except those solely for work-related duties), employer-covered costs, and additional profits. Pensions, annuities, and more are also included.

3️⃣ **Grossing Up:** If an employer pays an employee's tax, the employee's taxable income increases by the tax amount paid by the employer.

4️⃣ **No Deductions:** Expenses incurred by employees to generate 'Salary' income are not deductible.

5️⃣ **Perquisites:** Any amount or benefit from employment, provided by the employer, associates, past employers, prospective employers, or third parties, falls under 'Salary.'

6️⃣ **Special Tax Rate Election:** Employees meeting specific criteria can choose a special tax rate based on previous years' income and tax paid.

7️⃣ **Taxation on Arrears:** Back payments classified as 'Salary' can be taxed at the rates of the year when the services were rendered.

8️⃣ **Election Deadlines:** Employees making special tax rate elections must do so by the income return due date or a later date approved by the Commissioner.

📢 These guidelines promote clarity and transparency in Pakistan's salary income taxation. Compliance is vital for both individuals and employers. For detailed information and expert advice, consult tax professionals or the FBR.

🔗 For more assistance and inquiries on taxation matters, reach out to the Federal Board of Revenue (FBR).

🇵🇰💼📊

If you require any assistance with tax filing or have questions about the process, don't hesitate to reach out to us at 0311-1650427 or via email at [email protected] . We are here to ensure that your finances are in order and that you enjoy a stress-free tax season!

The Federal Board of Revenue (FBR) has taken a significant step by outlining the categories of individuals who are required to file their annual income tax returns for the tax year 2023.

The FBR referred to Section 114 of the Income Tax Ordinance, 2001, which sets out the criteria for mandatory income tax return filing for this year.

As per the guidelines outlined in Section 114:

Companies: Every company, regardless of its size or nature, is required to submit an annual income tax return.

Individuals with Taxable Income: Individuals (excluding companies) whose taxable income exceeds the maximum threshold not subject to taxation as per the Ordinance for the year are obligated to file their income tax return.

Non-Profit Organizations: Non-profit organizations defined in clause (36) of section 2 are also included in the mandatory return filing category.

Final Taxation Subjects: Individuals whose income for the year is subject to final taxation under any provision of the Ordinance must also file an income tax return.

Other Individuals: Individuals not covered by the above categories are required to file if they meet any of the following criteria:

Have been subjected to taxation in either of the two previous tax years.

Claim a carried forward loss as per the Ordinance.

Possess immovable property with an area of 500 square yards or more, or own flats in specific regions.

Own immovable property with an area of 500 square yards or more in a rating area.

Own flats with a covered area of 2000 square feet or more in a rating area.

Own vehicles with an engine capacity exceeding 1000CC.

Hold a National Tax Number (NTN).

Hold a commercial or industrial electricity connection with an annual bill surpassing Rs. 500,000.

Are registered resident individuals with various professional bodies or associations.

Are resident individuals required to file foreign income and assets statements under section 116A.

Persons Notified by the Board: Individuals or groups of individuals designated by the Board with the Minister’s approval are also included in the mandatory return filing category.

Additional Criterion: Additionally, every individual whose ‘Income from Business’ ranges from Rs. 300,000 to Rs. 400,000 in a tax year is required to file their income tax return.

The FBR’s move aims to ensure greater transparency and compliance with tax regulations across various sectors of the economy. This step emphasizes the importance of accurately reporting income and contributing to the nation’s revenue collection efforts.

If you require any assistance with tax filing or have questions about the process, don't hesitate to reach out to us at 0311-1650427 or via email at [email protected] . We are here to ensure that your finances are in order and that you enjoy a stress-free tax season!

FBR Eases Rules for Property Sellers under Section 7E

The Federal Board of Revenue (FBR) has announced a relaxation in the conditions governing Section 7E of the Income Tax Ordinance, 2001, specifically aimed at sellers of immovable property.

The change was conveyed through the issuance of Circular No. 3 of Income Tax on August 15, 2023.

ISLAMABAD: In a major development, the Federal Board of Revenue (FBR) has temporarily suspended a major increase proposed in the valuation of immovable properties till September 2023. The board will issue an automated system for taxpayers to obtain exemption or pay tax under section 7E of the Income Tax Ordinance, 2001.

The FBR has also decided to introduce an online facility for all citizens in the “IRIS” updated system to grant exemption or pay one percent tax under section 7E on immovable properties without going to the Commissioner Inland Revenue (FBR). “The FBR’s IRIS Portal would end the discretion of Commissioners Inland Revenue in deciding the matters of section 7E”, sources said.

Instruction regarding 236C on sale of property and 7E of the Income Tax Ordinance...

Document required for filing of Income Tax Return

Registered yourself as soon as possible to avoid excess tax.

Arham Law Associates providing you services to get registered and become tax filer.....

Tax Comparison: Non-Filers vs. Filers - Understanding the Differences

In recent times, tax regulations have undergone significant changes in many countries, with the primary goal of enhancing tax collection and compliance. One of the key distinctions lies in how non-filers and filers are treated concerning their tax obligations. Let's explore the differences between these two groups in the tax system, shedding light on their implications for taxpayers.

1. Cash Withdrawals:
New tax rates on cash withdrawals aim to encourage transparency and compliance. Non-filers might face higher tax deductions on large cash withdrawals compared to filers, who could enjoy exemptions for smaller withdrawals.

2. Purchase of Assets:
Distinct tax rates for non-filers and filers might apply when purchasing assets like vehicles or real estate. Non-filers may be subject to higher tax rates, incentivizing them to become active taxpayers.

3. Withholding Tax on Foreign Transactions:
In certain cases, withholding tax rates might vary for non-filers and filers, such as on foreign currency transactions. Active taxpayers could benefit from lower withholding tax rates, encouraging participation in the formal economy.

4. Special Taxes or Levies:
In some instances, governments may impose specific taxes or levies on non-filers to encourage compliance and discourage tax evasion.

5. Tax Benefits and Deductions:
Filers might be eligible for certain tax benefits, deductions, or credits that are not available to non-filers, making tax compliance more advantageous.

Understanding the differences between non-filers and filers in the tax system is crucial for individuals and businesses to make informed decisions and ensure compliance with tax regulations. These changes are often aimed at fostering greater tax transparency, increasing revenue, and promoting a fair tax system for all taxpayers.

Type of definition in law
1. Exclusive
2. Inclusive
3. Hybrid

What is exclusive ?

In exclusive definition meaning of dictionary is excluded / oust.

For example : “assessment year” means assessment year as defined in the repealed
Ordinance;

The exclusive definition start with word " means" which oust the dictionary meaning...

What is inclusive ?

In inclusive definition meaning of the dictionary is included.

For example : “income” includes any amount chargeable to tax under this Ordinance,
any amount subject to collection

The inclusive definition start with word includes.

What is hybrid ?

The hybrid definition contains both specific that define by law and dictionary meaning.

For example : Salary means any amount received by an employee from any
employment, whether of a revenue or capital nature, including —

(a) any pay, wages or other remuneration provided to an employee,
including leave pay, payment in lieu of leave, overtime payment,
bonus, commission, fees, gratuity or work condition
supplements (such as for unpleasant or dangerous working
conditions)

In the above definition word means and including both mentioned which indicate it is hybrid definition in which specific meaning of salary is define in the law and as well as include dictionary definition..

Muhammad iqbal ghor.............. Vs......
Commissioner of income tax officer Karachi...

Ref.50 Ptd 1075 ..H.C... Issue.........
Taxpayer is salaried individual employee of Pvt limited company. replied the notice of income tax officer that the running and maintenance expenses of vehicle are purely business expenses of company not be treated as taxable income. .....Held......

The honourable appellate court held that the running and maintenance expenses of vehicle come within definition of perquisite are to be included as taxable income of applicant.

applicant.pr

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