Obligation to file Income Tax Declarations

1 Obligation to file Income Tax Declarations TAXPAYER S FACILITATION GUIDE Brochure IR-IT-02 / Updated April, 2014 Revenue Division Federal Board of Revenue Government of Pakistan 0800-00-227, 051-111-227-227 Brochure IR-IT-02 Obligation To File Income Tax Declarations Our Vision To be a modern, progressive, effective, autonomous and credible organization for optimizing revenue by providing quality service and promoting compliance with tax and related laws Our Mission Enhance the capability of the tax system to collect due taxes through application of modern techniques, providing taxpayer assistance and by creating a motivated, satisfied.

2 Dedicated and professional workforce Our Values Integrity Professionalism Teamwork Courtesy Fairness Transparency Responsiveness For assistance and information on tax matters Please contact our help line center through Toll Free Telephone 0800-00-227 and following numbers: Telephone 051-111-227-227 or 051-111-227-228 Fax 051-9205593 E-mail or Visit our tax facilitation center (located in all major cities) or any Regional Tax Office or Visit our website at Facilitation and Taxpayer s Education Wing (FATE) Brochure IR-IT-02 updated June, 2013 Obligation to File Income Tax Declarations Federal Board of Revenue Revenue Division Government of Pakistan Brochure IR-IT-02 Updated April, 2014 Introduction This brochure provides general information about taxpayers for filing Income tax obligations of Declarations (return of Income and statement of final/fixed tax).

3 We have used simple language to explain most common tax situations. If you need more help after reading this brochure, feel free to contact us for further details and information. This brochure is to assist the taxpayers and reflects the legal position at the time of printing. In case of any conflict, the legal provisions of the law shall prevail over the contents of this brochure. Comments and suggestions We welcome your comments about this brochure and your suggestions for future editions.

4 You can e-mail us at or You can write to us at the following address: Member, Facilitation And Taxpayer s Education, Federal Board of Revenue, Constitution Avenue, Islamabad Contents Page What is Return of Income 2 What is Return of Income 2 Obligation to file Income tax Declarations 2 Who is required to furnish the return of Income ? 2 Who is required to furnish the statement of final/fixed tax? 3 What is the due date? 3 Where to furnish? 3 Is it mandatory to furnish electronically? 3 What penalties and default surcharge are charged from non-filers, late-filers or short-filers?

5 4 Can penalty for non-filing or late filing be avoided? 4 What if an omission or wrong statement is discovered later? 4 In case of refund what is required to be done? 5 Definitions 5 1 Facilitation and Taxpayer s Education Wing (FATE) Brochure IR-IT-02 updated November, 2012 Obligation to File Income Tax Declarations What is a Return of Income The Return of Income is a Form filed by a person to the Income Tax Department. It contains details of the person s annual Income (s).

6 Obligation to file Income tax Declarations Who is required to submit a return of Income ? 1. Every company irrespective of any conditions, whether earning exempt Income , or still in start-up stage or any other situation; 2. Associations of persons and individuals with annual Income over Rs. 400,000/- for tax year 2013. Any person who is charged to tax in any of the two preceding tax years Any person who claims a loss to be carried forward and set-off against the Income of the following year(s).

7 3. Any person who owns immovable property: i. with land area of 250 sq. yards or more located in areas falling within the municipal limits, a Cantonment Board, or the Islamabad Capital Territory; ii. with land area of 500 sq. yards or more located in rating area; or iii. a flat located in areas falling within the municipal limits , a Cantonment Board, or the Islamabad Capital Territory; or iv. a flat with covered area of 2,000 sq. feet or more located in rating areas; 4. any person who owns a motor vehicle having engine capacity of 1,000 cc or more 5.

8 Any person who has obtained a National Tax Number; or 6. any person who is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds Rs. 1,000,000. 7. Non profit organizations, irrespective of any conditions; 8. Any welfare institution approved under Clause (58) of Part I of the Second Schedule to the Income Tax Ordinance, 2001, irrespective of any conditions. Every individual whose Income under the head Income from business exceeds Rs.

9 300,000 but does not exceed the maximum amount that is not chargeable to tax. Any person [who in the opinion of the Commissioner was required to furnish the return of Income (for any of the aforesaid reasons) but has failed to do so] to whom a notice for furnishing of the return of Income has been served by the Commissioner. Even if none of the above applies, one may still need to file a return in order to claim a refund of tax deducted or collected at source (other than final tax). 2 Facilitation and Taxpayer s Education Wing (FATE) Brochure IR-IT-02 updated November, 2012 Obligation to File Income Tax Declarations Who is not required to file Return?

10 Exceptions (not required to file return of Income ) to the above are as under: Deriving Income exclusively from salary upto Rs. 499,999 (The annual statement of deduction of Income tax from salary, filed by the employer is treated as return of Income on behalf of such employee); Entire Income is subject to final tax or fixed tax for which a separate statement is prescribed; A widow, an orphan below the age of 25 years or a disabled person solely for the reason of owning immovable property (a flat or land of 250 sq.)