By: Syed Hassaan Naeem at KARACHI TAX BAR ASSOCIATION 19 August 2015 Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements

Schemes of Taxation

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 3 Schemes of Taxation - NTR and FTR ►The Income Tax Ordinance, 2001 (“Ordinance”) provides for two distinct and parallel schemes of taxation vis-à-vis a Normal Tax Regime (NTR) and a Final Tax Regime (FTR) ►Except for certain payments to a non-resident person, the scheme to apply to a particular class of income is not optional and is dependent on the category and source of income being derived by the taxpayer

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 4 Schemes of Taxation Normal Tax Regime (NTR) ►The computation of income and tax thereon under the NTR is governed by the provisions of sections 9, 10 and 11 of the Ordinance. Under NTR, tax is imposed on heads of income of a taxpayer by applying the rates as prescribed in the First Schedule ►For each head of income, certain deductions are allowable while computing income under the respective head. Moreover, the tax liability under NTR is available for adjustments against certain tax credits as specified, including the amount of tax deducted at the time of making payment to the recipient

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 5 Schemes of Taxation Final Tax Regime (FTR) ►Under the Ordinance (section 4), amounts governed under FTR are not to be included in the computation of “taxable income”. Sections 8 and 169 of the Ordinance, being the governing sections prescribe the following distinct features of income governed under FTR:  Income falling under FTR shall not be chargeable to tax under any head of income in computing the taxable income of the person who derives it for any tax year;  No deduction is allowable for any expenditure incurred in deriving the income falling under FTR

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 6 ►The FTR income is not to be reduced by – (i) any deductible allowance; or (ii) the set off of any loss; ►The tax payable by a person is not reduced by any tax credits allowed under the Ordinance; and ►The liability of the person deriving such income stands discharged to the extent that tax payable has been deducted or collected at source at the applicable rate from the payment made to the person Schemes of Taxation Final Tax Regime (FTR) (Cont.d.)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 7 ►Examples of income that is subject to FTR include but not limited to the following:  Dividend income earned by a shareholder  Export of goods and receipt of indenting commission  Royalty and Fee for Technical Services earned by a non-resident person, otherwise than through a Permanent Establishment (PE) in Pakistan  Commercial imports made by an importer, other than a “large import house”  Prize and winnings  Sale of goods by a trader not being a public company listed on a registered stock exchange in Pakistan  Brokerage and commission earned by a person Schemes of Taxation Final Tax Regime (FTR) (Cont.d.)

Advance Tax

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 9 ►Advance tax, as the name implies is a prepaid form of tax which is designed in such a way that a taxpayer pays on ‘Pay as You Earn’ basis ►In other words, it is the part payment of one’s total tax liability to be paid before the end of the fiscal year ►Advance tax is a tool used by the Governments to collect funds from the taxpayers ►This tool reduces the last moment tax burden of taxpayers and at the same time, results in speedy tax collection ►Section 147 governs the mechanism of payment of advance tax Concept of Advance Tax - Section 147

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 10 Concept of Advance Tax - Section 147 ►The following types/ classes of income are subject to advance payment of tax:  Income from business; and  Capital gains from sale of securities (stocks)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 11 Advance Tax on business income ►Every taxpayer whose income was charged to tax for the latest tax year is required to pay advance tax ►The following types of income are not considered for advance tax purposes:  Dividend income  Royalty and fee for technical services of non-residents who do not have a permanent establishment in Pakistan  Shipping and transport income of non-residents  Income from salary

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 12 Advance Tax on business income  Income falling under FTR where tax collected or deducted constitutes full and final discharge of tax liability on such income, e.g. under sections 148 (imports), 151 (profit on debt), 152 (certain payments to non-residents), 153 (payment for goods, services and contracts), 154 (exports), 156 (prize and winning), 156(A) (petroleum products), 233 (brokerage and commission), and 234A (CNG stations) ►Tax liability under section 113 (minimum tax on turnover) is also accounted for while determining advance tax liability under section 147

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 13 Advance Tax on business income - Exceptions ►An individual whose latest assessed taxable income is less than Rs.500,000 is not required to pay advance tax under section 147

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 14 Computation of Advance Tax for Individuals ►Individuals having latest assessed income of Rs.500,000 or more are required to pay advance tax on quarterly basis ►The amount of tax due for a quarter is computed according to the following formula: (A/4) – B Where – A - is the tax assessed for the latest tax year; and B - is the tax paid in the quarter for which a tax credit is allowed under section 168(2), other than tax deducted under section 149 (salary)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 15 Due dates for payment of advance tax ►For Individuals ►The advance tax paid by a taxpayer is allowed as adjustment against ultimate tax liability while computing tax due on the taxable income ►Excess tax paid (if any), by the taxpayer becomes refundable September quarteron or before 25 th September December quarteron or before 25 th December March quarteron or before 25 th March June quarteron or before 15 th June

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 16 Computation of Advance Tax for Companies & AOPs ►AOPs and Companies (other than Banking Companies) are required to pay advance tax on quarterly basis ►Banking Companies are required to pay advance tax on monthly basis ►The amount of tax due for a quarter is computed according to the following formula: (A x B/C) –D Where – A – is the taxpayer’s turnover for the quarter B – is the tax assessed to the taxpayer for the latest tax year

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 17 Computation of Advance Tax for Companies & AOPs C –is the taxpayer’s turnover for the latest tax year, and D – is the tax paid in the quarter for which a tax credit is allowed under section 168(2) In the absence of last assessed income or declared turnover, the taxpayer is required to estimate advance tax payable on the basis of quarterly turnover and pay such tax after taking into account minimum tax under section 113 and making adjustment for taxes already paid (withholding tax), if any

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 18 Estimate of income and advance tax ►AOPs and companies are required to estimate the tax payable by them for the relevant tax year, at any time before the second installment is due ►50% of the estimated advance tax liability is to be discharged by the due date of the second quarter ►Remaining 50% liability is to be paid in the remaining quarters ►If a taxpayer (other than a banking company) believes that the tax payable for the relevant tax year is likely to be less than the advance tax required to be paid, he may opt to estimate its advance tax liability any time before the last installment, and pay such estimated amount, minus the amount already paid, in equal installments

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 19 Estimate of income and advance tax ►A banking company is required to pay advance tax on a monthly basis in accordance with Rule 5 of the Seventh Schedule to the Ordinance ►If the tax payable by a banking company is likely to be more than the advance tax required to be paid, the banking company must estimate its advance tax liability and pay 50% thereof before 15 th June of the relevant tax year, and balance in the remaining months

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 20 Due dates for payment of advance tax ►For Companies (other than banking companies) and AOPs ►For Banking Companies – 15 th of every month ►The advance tax paid by a taxpayer is allowed as adjustment against ultimate tax liability while computing the tax due on the taxable income ►Excess tax paid (if any), by the taxpayer becomes refundable September quarteron or before 25 th September December quarteron or before 25 th December March quarteron or before 25 th March June quarteron or before 15 th June

Withholding Tax

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 22 Why Withholding Tax ►Pay as you earn ►To cater the working capital/ day to day funding needs of the Government ►Easy recovery of tax

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 23 Imports Section 148

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 24 Imports (Cont.d.) Section 148 ►Collection at import stage is not applicable including imports by the following:  The Federal, Provincial or Local Governments  A foreign company owned by a foreign government  A person who imports plant and machinery for setting up an industrial undertaking  A person who imports plant and machinery for execution of a contract with the Federal, provincial or a local government  Petroleum (E&P) companies  Industrial undertaking if the tax liability of the current year on the basis of tax of preceding two years, whichever is higher, is paid [Clause (72B), Part IV, Second Schedule]

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 25 Imports (Cont.d.) Section 148  Petroleum (E&P) companies  Industrial undertaking if the tax liability of the current year on the basis of tax of preceding two years, whichever is higher, is paid [Clause (72B), Part IV, Second Schedule]

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 26 Salary Section 149 Person liable to deduct tax Every person responsible for payment From whom Employees deriving taxable salary for the year Rate At the average rate of tax computed at the rates prescribed in Part I of the First Schedule On Taxable salary When At the time of payment of monthly salary

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 27 ►Employer is allowed to make adjustments on account of the following while calculating withholding tax on salary, after obtaining necessary documentation –  Tax credit on – (a)donation; (b)investments in new shares, or life insurance premium; and (c)investment in retirement annuity schemes ►I ►N Section 149 Salary (Cont.d.)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 28  Tax collected from the employee under various sections such as telephone, cash withdrawals etc.  Excess or short deduction of tax by the employer from salary within the tax year  Profit on debt paid on housing loans and zakat paid is allowed as deductible allowance against taxable income Section 149 Salary (Cont.d.)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 29 Section 150 Dividend Person liable to deduct tax Every resident company and branches of foreign companies operating in Pakistan From whom Every shareholder whether resident or not Rate 7.5% in case of dividend distributed by power generation companies / companies providing coal for power generation projects 12.5% for other cases in case of filer 15% for other cases in case of non-filer On Dividend distribution and remittance of after tax profits by a branch of a foreign company in Pakistan When At the time of payment of dividend and remittance of after tax profits by a branch of a foreign company in Pakistan

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 30 Section 150 Dividend – Exemption from WHT Clause (11B) Inter-corporate dividend within group companies availing group taxation under sections 59AA and 59B Clause (38A)Venture Capital Company Clause (47B) NIT, Collective Investment Scheme, Modaraba, Approved Pension Fund, Private Equity & Venture Capital Fund Recognized PF, GF and Pension Fund

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 31 Section 151 Profit on Debt Person liable to deduct tax All payers, other than individuals and AOPs From whomAll resident persons Rate 10% of gross yield for filers 17.5% for non-filers if the yield is more than Rs.500,000 OnGross amount after deduction of zakat (if any) When At the time of payment of interest/profit on deposit/ saving accounts, bond, certificate, debenture, instruments of any kind

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 32 ►No withholding tax applies on payment of interest on loans borrowed from banks and financial institutions ►Non-resident persons who are covered under section 152(2) are not liable to deduction of tax under section 151 Section 151 Profit on Debt (Cont.d)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 33 Section 151 Profit on Debt – Exemption from WHT Clause (11C) Inter-corporate profit / interest within group companies entitled to group taxation under sections 59AA and 59B Clause (36A) Investment in Behbood Saving Certificate/ Pensioner’s Benefit Account Clause (38) Special Purpose Vehicle for the purpose of Securitization Clause (38A)Venture Capital Company Clause (47B) NIT, Collective Investment Scheme, Modaraba, Approved Pension Fund, Private Equity & Venture Capital Fund Recognized PF, GF and Pension Fund

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 34 Section 152 Payments to non-residents Nature of payment Rate of withholding Royalty or Fees for Technical Services (FTS) when governed under Final Tax Regime 15% Execution of contracts under a construction, assembly or installation project including for supervisory services in relation to such project 6% Contracts for advertisement services rendered by T.V. Satellite Channels 6% Insurance premium or re-insurance premium5% Advertising services to a Media House10% Profit on debt - -Non-resident having a P.E. in Pakistan -Non-resident having no P.E. in Pakistan 20% 10%

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 35 Section 152 Payments to non-residents Nature of payment Rate of withholding FilerNon-filer Purchase of goods from a PE being a company4%6% Purchase of goods from a PE other than a company4.5%6.5% Acquisition of transportation services from a PE2% Other services rendered by PE being a company8%12% Other services rendered by PE not being a company10%15% Execution of contract by PE being a company7%10% Execution of contract by PE not being a company7.5%10% Any other payments to non-residents20%

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 36 ►The general withholding rate of 20% does not apply on the following payments  Salary  Dividend  Prizes and winnings  Brokerage and commission  Payments that are taxable to a PE in Pakistan of the non-resident person  Payments by a person who is held to be a representative of a non- resident person  Where a person claims to be a representative of the non-resident person  Amounts which are not chargeable to tax Section 152 Payments to non-residents

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 37 ►If a person intends to make payment to a non-resident person without deduction of tax, he must obtain prior approval from the Commissioner Inland Revenue ►Above reporting requirement is not applicable in the following cases:  Import of goods where title of goods is transferred outside Pakistan and is supported by import documents  Educational and medical expenses remitted in accordance with the regulations of the SBP Section 152 Payments to non-residents

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 38 ►Prescribed person means:  Federal Government  A company  An association of persons  Non profit organization  A foreign contractor or consultant  A consortium or joint venture  Exporter or export house (for the purpose of sub-section 2)  An individual and AOP, having turnover of Rs.50 million or above  A sales tax registered person Section 153 Payments for Goods, Services & Contracts Person liable to deduct taxEvery prescribed person From whomAll resident persons

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 39 Section 153 Payments for Goods, Services & Contracts Nature of paymentRate of withholding FilerNon-filer For goods  1.5% in case sale of rice, cotton seeds, edible oils  In other cases  4% for companies  4.5% for other taxpayers  1.5% in case sale of rice, cotton seeds, edible oils  In other cases  6% for companies  6.5% for other taxpayers For services  2% in case of transport services  In case of other services  8% for companies  10% for other taxpayers  2% in case of transport services  In case of other services  12% for companies  15% for other taxpayers

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 40 Section 153 Payments for Goods, Services & Contracts Nature of paymentRate of withholding FilerNon-filer For execution of contracts excluding contracts for sale of goods or rendering of services  7% for companies  7.5% for other taxpayers  10% for sports persons  10% for companies  10% for other taxpayers  10% for sports persons For services of stitching, dyeing, printing, washing, embroidery, sizing and weaving to an exporter or an export house 1%

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 41 Section 153 Payments for Goods, Services & Contracts ►Withholding is required on the gross amount payable (inclusive of sale-tax) e.g. - Sale100,000 17%17,000 Rs.117,000 Withholding 4% of Rs.117,000Rs.4,680

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 42 Section 153 Payments for Goods, Services & Contracts ►Deduction of tax is not required in the following cases –  Sale of goods by an importer in the same condition as they were imported and on which tax has been paid at import stage  Payments representing refund of security deposit  Payments for purchase of an asset under a lease and buyback agreement  Where the payment is for securitization of receivable by a special purpose vehicle

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 43 Section 154 Exports Collecting Agent TransactionRate of withholding Authorized dealer in foreign exchange Export of goods by an exporter1% on export proceeds realized Every Banking Company Sale of goods by an exporter under inland back to back letter of credit or other arrangements 1% on export proceeds realized Authorized dealer in foreign exchange Commission due to an indenting commission agent 5% on export proceeds realized Collector of CustomsClearing of goods exported1% of gross value of goods EPZAExport of goods by an industrial undertaking located in the Zone 1% on export proceeds Direct exporter / export house A firm contract to an indirect exporter 1% of export proceeds

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 44 Section 155 Income from Property Person liable to deduct tax Every prescribed person From whom Individual, AOP and company On Gross amount of rent (including rent of furniture & fixture and amount of services relating to property When At the time of payment of rent ►Prescribed person means –  Federal, Provincial or Local Government  Company  Non profit organization  Diplomatic mission of a foreign state  Private education institution, boutique, beauty parlour, hospital, clinics  Individuals and AOPs paying rent of Rs.1.5 million in a year  Any other person notified by the FBR

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 45 ►The rate of deduction of tax in case of individuals and AOPs - Section 155 Income from Property (Cont.d) Gross Amount of RentRate of tax Where the gross amount of rent does not exceed PKR 150,000 Nil Where the gross amount of rent exceeds PKR 150,000 but does not exceed PKR 1000, % of the gross amount of rent exceeding PKR 150,000 Where the gross amount of rent exceeds PKR 1,000,000 PKR 85,000 plus 15% of the gross amount exceeding PKR 1,000,000 ►The rate of deduction of tax in case of companies is 15%

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 46 Section 156 Cash withdrawals from Bank Person liable to deduct tax Every person paying prize on a bond, winnings from a raffle, lottery, prize on winnings quiz, prize offered by companies for promotion of sales or cross-word puzzle Rate  15% on prize on bond or cross word puzzle  20% on other cases On Gross amount paid When At the time of payment

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 47 Section 231A Prizes and Winnings Person liable to collect tax Every banking company From whom Every person withdrawing cash in a day exceeding Rs.50,000 Rate 0.3% for filers and 0.6% for non-filers When At the time withdrawal exceeds Rs.50,000 in a day ►Exemption from withholding –  Federal or Provincial Government  A foreign diplomat or a diplomatic mission in Pakistan  Person who produces an exemption certificate

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 48 ►The scope of collection of tax has been extended to include every distributer or dealer to another wholesaler ►In addition to manufacturers and commercial importers, now dealers, wholesalers, and distributors who sell to a wholesaler are required to collect tax on such sale ►The rate of tax withholding is 0.5% of the gross amount of sales Section 236H Advance tax on sale to retailers & wholesalers

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 49 ►Non-filers are subject to collection of tax on all non-cash banking transactions at the following rates: Section 236P Advance tax on banking transactions other than cash Period to to Onwards Rate of tax 0.6%0.3%0.6% ►This withholding tax is applicable where total payments for all transactions in a day exceed Rs.50,000. However, this threshold shall be considered separately for sales of instruments and transfer of sums ►The only exception is for payments made for taxes of Federal, Provincial or Local government and payments to Pakistan Real-time Interbank Settlement Mechanism (PRISM)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 50 Section 236Q Payment for use of machinery and equipment ►Withholding of 10% from payments to a resident person for use of or right to use industrial, commercial and scientific equipment as well as on account of rent of machinery ►The tax is required to be deducted by persons prescribed under section 153(7) ►The tax deducted under this section constitutes final tax ►The tax under this section shall not apply in the case of:  Agricultural machinery  Machinery leased by a leasing company, investment bank, Modaraba, scheduled bank or development finance institution

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 51 Section 236R Collection of tax on remittance of education expenses ►Remittance of education and related expenses abroad is now subject to collection of by every remitter of the foreign exchange ►Education expenses have been defined to include tuition fee, boarding and lodging expenses, any payment for distant learning to any institution or university in a foreign country and any other expense related or attributable to foreign education ►The tax collected under this section is advance tax which would be available for adjustment against the tax liability of the payer of education related expenses

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 52 Section 160 & Rule 43 Deposit of tax withheld ►The tax withheld from a payment is deposited using the online system of the FBR ► Where tax has been withheld by the Federal or a Provincial government, it is to be deposited on the same day ►In other cases, the tax so withheld is to be deposited within 7 days from the end of each week ending on every Sunday. This means that the tax withheld in the current week is to be deposited by the end of the next week

Return of Income & Wealth Statement

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 54 Section 114 Persons who are required to file ►Every company as defined in section 80 ►Every person (other than a company) earning taxable income in excess of taxable threshold (Rs.400,000) ►Any non-profit organization (as defined in section 2) ►Any approved welfare institution (as mentioned in Clause (58), Part I of the Second Schedule)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 55 Section 114 Persons who are required to file ►Any other person who – (a)has been charged to tax in respect of any of the two preceding tax years (b)claims a loss carried forward (c)owns immovable property with a land area of 250 Sq.Yds or more (d)owns a flat located in areas falling thin the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory (e)owns immoveable property with a land area of 500 Sq.Yds. or more located in a rating area

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 56 Section 114 Persons who are required to file (f)owns a flat having covered area of 2,000 Sq.Ft. or more located in a rating area (g)owns a motor vehicle having engine capacity above 1000CC; (h)has obtained National Tax Number (i)is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 57 Section 114 Persons who are required to file (j)is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds Rs.500,000 (k)whose business income exceeds Rs.300,000 but does not exceed Rs.400,000 in a tax year ►The Commissioner may require any person who in his opinion is required to file a return of income for a tax year but who has failed to do so, to furnish such return for that year by the time specified in the notice ►A notice may be issued in respect of any tax year up till last five completed tax years

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 58 Section 115 Persons who are NOT required to file ►The following persons are not required to furnish a return of income for a tax year – (a)a widow; (b)an orphan below the age of twenty-five years; (c)a disabled person; or (d)in the case of ownership of immovable property, a non- resident person ►Any person who is not obliged to furnish a return for a tax year because all the person‘s income is subject to FTR is required to furnish a statement showing such particulars relating to the person‘s income for the tax year – section 115(4)

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 59 Section 114 Revision of Return ►Any person who furnished a return/ statement discovers any omission or wrong statement therein, may furnish a revised return/ statement for that tax year, at any time within five years from the end of the financial year in which the original return/ statement was furnished (a)it is accompanied by the revised accounts or revised audited accounts, as the case may be; (b)the reasons for revision of return, in writing, duly signed, by the taxpayers are filed with the return;

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 60 Section 114 Revision of Return ►It is accompanied by approval of the Commissioner in writing for revision of return where such revision is done after 60 days of filing of return ►Taxable income declared is not less than and loss declared is not more than income or loss, as the case may be, determined by an order

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 61 Section 116 Filing of Wealth Statement Persons required to file Wealth Statement ►Every resident individual filing a return of income for any tax year shall furnish a wealth statement and wealth reconciliation statement for that year along with such return ►Where a person, who has furnished a wealth statement, discovers any omission or wrong statement therein, he may furnish a revised wealth statement along with the revised wealth reconciliation and the reasons for filing revised wealth statement, at any time before an assessment, for the tax year to which it relates, is made

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 62 Section 165 Filing of Withholding tax statement ►Every withholding agent is to report the tax withheld and deposited by him in the government treasury, to the FBR on a monthly basis ►The monthly withholding statement is required to be filed by 15 th of the next month online on the FBR’s web portal

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 63 Rule 73 Mode of filing of returns ►E-filing is mandatory for the following taxpayers:  every company & AOP  every salaried individual  sales-tax registered persons  refund claimants either salaried or business individual

Advance Tax, Deduction of Tax at Source and Filing of Returns/ Statements Page 64 Section 118 Due date of filing of Returns/ statements ►A person may apply, by the due date, to the Commissioner for an extension of time to furnish the return and the Commissioner (if satisfied) may grant an extension not exceeding 15 days from the due date for furnishing the return of income ►The change in due date will not change the date of payment of tax due ParticularsDue date In case of company where tax year runs from 01 July to 30 June31 December In case of company where the tax year closes between 01 July to 31 December and business individuals 30 September In case of salaried individuals and for persons falling under FTR31 August

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