Where any amount is credited in a person’s books of bills or a character has made any investment or is the owner of any money or has incurred expenditure or has concealed earnings and the individual presents no clarification about such amount, investment, money, expenditure or income or the clarification is now not satisfactory, such amount or the cost of such investment, money, expenditure or profits is added to the person’s profits chargeable to tax. However, the said provision by taxconsultancy.pk is no longer applicable to any amount of overseas trade which is no longer exceeding Rs10 million in a tax year remitted from backyard Pakistan thru regular banking channels that are encashed into rupees via a scheduled financial institution and certificates to this effect is produced from such a bank.
According to a survey, the limit of Rs 10 million has been reduced to Rs 5 million in a tax year. So if the quantity of overseas alternate remittance from backyard Pakistan is equivalent in rupees up to Rs 5 million in a tax year, the supply of such foreign remittance can’t be asked. Even if the amount of overseas remittance is greater than Rs 5 million in a tax year, the Commissioner can only ask about the source of foreign remittance. In case the source is explainable, no further complaints will be undertaken. Foreign remittances exceeding Rs 5 million do not entice any additional earnings chargeable to tax. Only if the overseas remittance source is not explainable such an amount will be delivered in profits chargeable to tax. Sales tax return.
The FBR has empowered Commissioners Inland Revenue to freeze any home asset of a person concerned with tax evasion on offshore assets and is likely to leave Pakistan. Through the Finance Act 2019, the period “offshore asset” has been described by inserting a new clause (38AA) in area two, which consists of any movable or immovable asset held, any gain, profit or earnings derived, or any expenditure incurred outside Pakistan.
Taxconsultancy.pk refer to the current changes made in the Income Tax Ordinance, 2001 (through the Finance Act, 2014 (the Act), relevant with effect from July 1, 2014. Through the Act, thinking of filer and non-filer has been introduced in order to promote tax culture, discourage non-compliance with tax legal guidelines and address the worries of citizens who pay due taxes involving them having the greater cost of enterprise than tax evaders.
‘Filer’, as defined in the Ordinance, means a taxpayer whose title appears in the active taxpayers’ list issued with the aid of the Federal Board of Revenue from time to time or is a holder of a taxpayer’s card. A ‘Non-Filer’ is a character who is no longer a filer.
A listing of Active Taxpayers is accessible on the FBR’s website and can be accessed via the following link:
www.fbr.gov.pk Home > e-Services > Active Taxpayer List (Income Tax)
Through this letter, we would apprise you of the separate fees of tax withholding on money withdrawal and return on accounts, now prescribed for ‘filer’ and non-filer.
1. PAYMENT OF PROFIT / RETURN ON ACCOUNTS / DEPOSITS MAINTAINED
Rate of tax withholding 10 percent 15 percent*
*However if the earnings/return paid is less than Rs 500,000, the tax will be deducted at the charge of 10 percent. The extra 5 percent tax deducted for non- filer shall be adjustable towards tax liability at filing the Return of income.
2. CASH WITHDRAWALS EXCEEDING EXCESS OF RS. 50,000 IN A DAY.
Rate of tax withholding 0.3 percent 0.5 percent
It is also known that solely Nation Tax Number (NTN) certificates are not enough proof for availing the regular price of tax withholding, i.e. @10% on profit / Return on money owed and @0.3% on money withdrawal.
We at Faysal Bank Limited, Barkat Islamic Banking, take delight in having you as our consumer and appear forward to strengthening this relationship. For any additional assistance or queries, please visit our website taxconsultancy.pk.
Islamabad: The Federal Board of Revenue (FBR) has agreed to a notion to deliver down the fee of 0.3 percentage withholding tax on banking transactions of non-filers via digital channels at par with the rate of filers.
Sources informed Business Recorder that the selection had been taken at some stage in the final assembly of the Banking Committee’s Recommendations agreed upon by using the State Bank of Pakistan (SBP) and similarly coordination with the relevant ministries via the SBP and the Finance Division.
According to the proposal, “the 0.3 percent tax on transactions through non-filers through digital channels should be brought at par with that of filers as these transactions give functionality to tune for later accountability”. The notion has been agreed upon through the FBR and would be applied by using the FBR. However, no unique timeline has been specified. Withholding tax return.
According to a taxconsultancy.pk expert, digital transactions are transactions in which the purchaser authorizes the transfer of money through digital means, and the money floats at once from one account to another. This money owed should be held in banks or with entities/providers.
At existing, there is a zero percent withholding tax on the banking transactions carried out by the filers of income tax returns. It has been proposed that the 0.3 percent withholding tax on transactions through non-filers through digital channels must be added at par with that of filers.