Federal Board of Revenue (FBR) has made it compulsory for all salaried employees (government and private) having taxable income to file their income tax returns from Tax year 2015. This move has been taken in order to raise the number of tax returns. As per the laws of taxation, providing a wealth statement along with tax return filing will now be a compulsion for all salaried employees. As per FBR, they are expanding the tax net towards those who are currently non-filers. In a further attempt to make the people realize their duty for paying taxes, the FBR has published the losses that the people may have to suffer, if they don’t take their tax paying duty seriously.
If the people do not file their taxes, a 30% dividend income will be extracted instead of 15% in case of paying taxes. The bank will charge 30% profit when income tax return is not paid, instead of 15%.On selling of property, 2% will be deducted instead of 1% if the tax return is not filed. When purchasing a property, 2% will be deducted instead of 1%, when tax returns are not paid.Similarly in case of vehicle purchase, lower rates are implied on registration by Filers as compared to non-filers of the tax returns.
INCOME TAX RATE
If you’re earning 400,000/- PKR or above in a year, then yes, the income tax applies to you. The government determines how much the tax rate applies to your earnings year by year, and in this regard a tax slab is made so as to classify each tax payer as per his earning per annum.
WEALTH RECONCILIATION STATEMENT
If your yearly salary is PKR 600,000 or above, then it is your obligation to file income tax return through IRIS (online software/system for e-filing). With tax return filing, you will also have to tender your wealth reconciliation statement.
What is a wealth statement?
Law required a person to show his income, profit, loss and expenses to be mentioned in one form, person is also required to provide details of his assets possessed and disposed in a prescribed form referred to as Wealth Statement which as such is mandatory to be filed.If you want to reconcile your last year’s wealth with this year’s wealth statement, following is a basic technique for it.
Wealth (last year): PKR 1500
Wealth (current year): PKR 2000
Increase/Decrease in wealth: PKR 500 (call it ‘A’)
Salary income: PKR 500
Rental Income (if any): PKR 900
Business Income (if any): PKR 200
Foreign remittance (if any): PKR 100
Total Sources of Income: PKR 1700 (call it ‘B’)
Now deduct the following:
Personal expenses: PKR 500
Other(s) e.g. marriage of sister/son: PKR 500
Random Taxes Paid: PKR 200
Total amount of expenses: PKR 1200 (Call it ‘C’)
Income Sources (B) – Expenditures (C) = PKR 500
Note: A and difference of (B-C) should always be equal
Supportive documents for filing of Tax Return
- Salary Certificate
- Tax Deduction Certificate from employer from 01st July 2020 till 30th June 2021
- CNIC (Original and Photocopy)
- Email ID
- Bank Account Statement from 01st July 2020 till 30th June 2021
- List of Personal Assets along with their Value of Purchase/acquisition
- Utility bill if under name of tax filer
If you do not possess NTN and are not registered with FBR than we can assist you to register with FBR and get you issued NTN for filing of your tax returns. Normal time for issuance of NTN takes 1-2 days whereas to become active filer with FBR normal time takes as much as 2-3 days. So better hurry up if you still are not an active filer.
If you have any further queries with regard to issuance of NTN or filing of Tax Returns