LAHORE: The Lahore Chamber of Commerce & Industry has urged the government to rectify amendments, for “Property Income set off against losses of current/previous year”, made by ex-federal finance minister Ishaq Dar in Income Tax Ordinance 2001.
In a statement, the LCCI President Almas Hyder, Senior Vice President Khawaja Shahzad Nasir and Vice President Fahim-ur-Rehman Sehgal said that ex-federal finance minister amended that property income cannot be set off against losses of current/previous years which is unfair and needs immediate rectification.
They said that the government is well aware of the fact that in many cases 15% tax is considered full and final liability that means Ishaq Dar’s amendment affects only industries which need to be looked at to create more job opportunities for the rising population.
The LCCI office-bearers said that Part VIII of Income Tax Ordinance 2001 says “ set of losses (1) subject to sections 58 and 59, where a person sustain a loss for any tax year under any head of income specified in section 11, the person shall be entitled to have the amount of the loss set off against the person’s income. If any, chargeable to tax under any other head of income (except income under the head salary or income from property) for the year. (2) Except as provided in this part, where a person sustains a loss under a head of income for a tax year that cannot be set off under subsection (1), the person shall not be permitted to carry the loss forward to the next tax year. (3) Where, (in a tax year), a person sustains a loss under the head income from business and a loss under another head of income, the loss under the head of income from business shall be set off last.
Set off of losses of companies operating hotels is subject to sections 56 and 57, where a company registered in Pakistan or Azad Jammu and Kashmir, operating hotels in Pakistan of AJ&K, sustains a loss in Pakistan or AJ&K for any tax year under the head of income from business, shall be entitled to have the amount of the loss set off against the company’s income in Pakistan or AJ&K, as the case may be, from the tax year 2007 (onward). Carry forward of business losses (1) where a person sustains a loss for a tax year under the head of income from business (other than a loss to which section 58 applies) and the loss cannot be wholly set off under section 56, so much of the loss that has not been set off shall be carried forward to the following tax year and set off against the person’s income chargeable under the head of income from business for that year. (2) If a loss sustained by a person for a tax year under the head of income from business is not wholly set off under sub-section (1), then the amount of the loss not set off shall be carried forward to the following tax year and applies as specified in sub-section (1) in that year, and so on, but no loss can be carried forward to more than six tax years immediately succeeding the tax year for which the loss was first computed.”
The LCCI office-bearers said that amendment made by Ishaq Dar that property income cannot be set off against losses of current/previous year is a sheer injustice with those who are working in difficult conditions. He said that amendment was made one-sidedly without taking stakeholders onboard. They said that present regime is trying to put economy back on rails and business community wants to supplement its efforts but for the purpose, government would have to create an atmosphere conducive for the business community.
They hoped that government would understand the situation and rectify the anti-business amendment made by the ex-finance minister.
