TAXATION
Income Tax Returns Filing
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).
Who is required to submit a return of income?
Every company irrespective of any conditions, whether earning exempt income, or still in start-up stage or any other situation;
Associations of persons and individuals with annual income over Rs. 400,000/- for tax year 2024-25.
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).
Any person who owns immovable property:
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;
with land area of 500 sq. yards or more located in rating area; or
A flat located in areas falling within the municipal limits , a Cantonment Board, or the Islamabad Capital Territory; or
A flat with covered area of 2,000 sq. feet or more located in rating areas;
Any person who owns a motor vehicle having engine capacity of 1,000 cc or more
Any person who has obtained a National Tax Number; or
Any person who is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds Rs. 1,000,000.
Non profit organizations, irrespective of any conditions;
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. 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).
Sales Tax Returns Filing
Every person registered under the Sales Tax Act,1990, or the Federal Excise Act, 2005, is required to file a Sales Tax Return.
A Sales Tax return is the taxpayer’s document of declaration through which taxpayer not only furnishes the details of transactions during a tax period but also deposits his Sales Tax liability.
On the return form, the taxpayer declares for a particular tax period and respective input tax and output tax, at prescribed rate of Sale Tax. In case input tax exceeds output tax, the amount of refund claimed or excess input tax is also declared in the return.
A registered person shall file a single return for all the possible sectors that the registered person is operating in. Due date for the single return for the sectors would be the due date applicable to his major activity in terms of sales tax or federal excise duty payable.
Where a Sales Tax Return is not filed within a period of six months after the due date, the same shall be filed only after approval of the Commissioner Inland Revenue having the appropriate jurisdiction
Where a Sales Tax Return is not filed within a period of six months after the due date, the same shall be filed only after approval of the Commissioner Inland Revenue having the appropriate jurisdiction
For different categories of taxpayers, monthly, quarterly or annual returns may be filed on prescribed format as follows:
MONTHLY RETURN
Under the standard procedure a registered person is required to file monthly return Annexure C on 10th and Payment on 15th and return by the 18th day of the month following the period in which the supplies were made, in the designated Branches of National Bank of Pakistan. In case of certain categories as mentioned below Procedure has been devised to file return on monthly and quarterly basis.
QUARTERLY RETURN
The taxpayers falling exclusively in the category of CNG required to file the return on quarterly basis.
ANNUAL RETURN
A manufacturer is to file annual Sales Tax return, for a financial year by the 30th September of the following financial year.
FINAL RETURN
If a person applies for de-registration, the person shall before such de-registration, furnish a final return to the appropriate Commissioner having jurisdiction in the at such time as directed by the appropriate Commissioner.
REVISED SALES TAX RETURN
A registered person may file a revised return within one hundred and twenty days of the filing of return to correct any omission or wrong declaration made therein, subject to approval of the Commissioner Inland Revenue having appropriate jurisdiction.
PRA, SBR and KPRA Returns Filing
Sales tax return can be filed either electronically or manually. A complete procedure for filing of a return is prescribed under the Punjab Sales Tax on Services (Filing of Returns) Rules, 2012.
Wealth Statement
Corporate - Withholding taxes. WHT on payments of royalty and FTS, when royalty or FTS is not attributable to a PE in Pakistan, is 15% or a lower treaty rate of royalty or gross fees. The tax withheld is deemed to be the final tax liability of the non-resident.
Withholding Taxes
Corporate - Withholding taxes. WHT on payments of royalty and FTS, when royalty or FTS is not attributable to a PE in Pakistan, is 15% or a lower treaty rate of royalty or gross fees. The tax withheld is deemed to be the final tax liability of the non-resident.
FBR Audit Consultation
Tax system in Pakistan is operating on self assessment basis aimed at promoting voluntary-compliance, documentation and self-policing. Tax Audit is an effective instrument of control with the FBR through which compliance level is monitored. Through Audit, the government checks whether a registered person/ taxpayer has correctly determined his tax liability, deposited due tax in the national exchequer and is making adjustments of input tax etc, to which he is legally entitled. In order to safeguard the government’s interests, FBR has established a central risk based and automated “Tax Audit Management System” (TAMS), which is constantly reviewed and improved.
In order to achieve the aforementioned goals, Taxpayers Audit wing was established in January 2003. It was assigned the task of restructuring and reforming the audit policy. The main tasks included drafting National Audit Manual, preparing National Audit Plan and training the FBR workforce in modern auditing techniques etc.
NTN and GST Registration
An individual, a company and an association of persons (AOP) or foreign national shall be treated as registered, when they are e-enrolled on the Iris portal.
E-Enrollment with FBR provides you with a National Tax Number (NTN) or Registration Number and password.
In case of individuals, 13 digits Computerized National Identity Card (CNIC) will be used as NTN or Registration Number.
NTN or Registration Number for AOP and Company is the 7 digits NTN received after e-enrollment.
These credentials allow access to Iris portal, the online Income Tax system, which is only way through which online Income Tax Return can be filed.
REGISTRATION PROCESS
Online Registration
Online registration is available only for:
Individual and not for Association of Person or Company;
Before starting online registration, the Taxpayer must have:
Read User Guide;
A computer, scanner and internet connection;
A cell phone with SIM registered against their own CNIC;
A personal email address belonging to them;
Scanned PDF files of:
Certificate of maintenance of personal bank account in his own name;
Evidence of tenancy / ownership of business premises, if having a business;
Paid utility bill of business premises not older than 3 months, if having a business.
Online registration is available at Iris
For Registration of an Individual, the Individual must:
Personally go to any Facilitation Counter of any Tax House;
Take the following documents with him:
Original CNIC;
Cell phone with SIM registered against his own CNIC;
Personal Email address belonging to him;
Original certificate of maintenance of personal bank account in his own name;
Original evidence of tenancy / ownership of business premises, if having a business;
Original paid utility bill of business premises not older than 3 months, if having a business.
For Registration of an AOP, anyone of the Members / Partners must:
Personally go to any Facilitation Counter of any Tax House
Take the following documents with him:
Original partnership deed, in case of Firm;
Original registration certificate from Registrar of Firms, in case of Firm.
CNICs of all Members / Partners;
Original letter on letterhead of the AOP signed by all Members / Partners, authorizing anyone of the Members / Partners for Income / Sales Tax Registration;
Cell phone with SIM registered against his own CNIC but not already registered with the FBR;
Email address belonging to the AOP;
Original certificate of maintenance of bank account in AOP’s name;
Original evidence of tenancy / ownership of business premises, if having a business;
Original paid utility bill of business premises not older than 3 months, if having a business.
For Registration of a Company, the Principal Officer must:
- Personally go to any Facilitation Counter of any Tax House
Take the following document with him:
Incorporation Certificate of the Company;
CNICs of all Directors;
Original letter on letterhead of the company signed by all Directors, verifying the Principal Officer and authorizing him for Income Tax / Sales Tax Registration;
Cell phone with SIM registered against his own CNIC but not already registered with the FBR;
Email address belonging to the Company;
Original certificate of maintenance of bank account in Company’s name;
Original evidence of tenancy / ownership of business premises, if having a business;
Original paid utility bill of business premises not older than 3 months, if having a business.
Punjab Revenue Authority (PRA) Registration
Requirement of registration:
Every person engaged in providing taxable service or services or pay tax under the Act is required to be registered in the manner specified in these rules.
Where a person provides one or more taxable services from one or more premises and has a centralized billing or invoicing system or centralized accounting system in the Punjab, such person shall be entitled to apply for and take one registration.
Where a person is providing more than one taxable services, he may make a single application mentioning therein all the taxable services provided by him and certificate of registration in such case shall indicate details of all taxable services provided by him.
Where a person carrying out business of providing taxable services simultaneously in more than one province including the Punjab, such person is required to take a separate registration for the Punjab and pay tax accordingly in respect of the services rendered by him in the Punjab.
Every registered person shall invariably and conspicuously mention his registration number on his invoices, bills, vouchers or other similar documents and on his correspondence with the Authority or any of the officers of the Authority.