KARACHI – The Federal Board of Revenue (FBR) has decided that late filers for income tax returns would not be penalised due to technical and non-technical reasons, The News reported on Sunday.
Although no one has been penalised yet, but a penalty for late filing has been under discussion for a while. The last date for tax returns filing for salaried and business individuals was December 8, 2020 whereas for corporate taxpayers it was December 31, 2020.
By December 8, 2020, the tax body had received around 1.8 million tax returns. By January 18, 2021, the number had risen to 2.4 million.
The FBR official said late filers could be penalised for the late submission, but the board would decide on a case-to-case basis, Ashfaq Ahmed, member of Inland Revenue Operations at FBR, told the Karachi Tax Bar Association earlier.
Section 182 of the Income Tax Ordinance 2001 states the penalties for late filers as:
“If an individual fails to furnish a return of income, they are liable to pay equal to 0.1% of the tax payable in respect of that tax year for each day of default subject to a maximum penalty of 50% of the tax payable provided that if the penalty worked out is less than Rs 40,000, or no tax is payable for that year, such person shall pay a penalty of Rs 40,000.
“Provided that if 75 percent of the income is from salary and the amount of income under salary is less than five million rupees, the minimum amount of penalty shall be Rs 5,000,” reads the law.
Similarly, “If a person fails to furnish a wealth statement, which is mandatory to file along with the return of income, by the due date then such an individual will pay a penalty of 0.1% of the taxable income per week or Rs100,000 whichever is higher.”