ISLAMABAD: Besides immunity from penalties, default surcharge and audit, another major relief has been allowed to the business category individual taxpayers and applicable rate of income tax has also been reduced by the Federal Board of Revenue for Tax Year 2012.
A tax expert has said that through an SRO 1065(I)/2013, FBR has notified immunity from penalties, default surcharge and audit for the last five tax years. In case of business individuals for Tax Year 2012, the FBR has notified that the rate of applicable income tax as specified in column (3), against serial no 2 in clause (1), in Division I of the Part I of First Schedule of the Income Tax Ordinance, shall be reduced to 5 percent, for taxable income declared in return for tax year 2012, filed under clause (87) or (88) of the Part IV of this Schedule.
As per the SRO, the applicable rate of 7.5 per cent has been reduced to 5 per cent where the taxable income exceeds Rs 350,000 but does not exceed Rs 500,000.
Besides, the immunity from penalties, default surcharge and audit would also be available to an individual, holding an NTN who files a return, as specified in Form ‘A’ by February 28, 2014, of the tax years from 2008 to 2012, for which returns have not been field. Provided that for each of the tax year, a minimum tax of Rs 20,000 on the basis of taxable income is paid by the taxpayer.
The taxpayer shall not be entitled to claim any adjustment of withholding tax collected or deducted under the ordinance. The due date of filing of return for tax year 2013, in respect of individuals availing concessions under this clause, shall be February 28, 2014.
The immunity from penalties, default surcharge and audit would be available to an individual, if the individual files return or returns, as prescribed for this clause, by February 28, 2014 for any or all of the tax years from 2008 to 2012 and has not filed any return for the last five years; is not an NTN holder as on November 28, 2013; declare taxable income for the year which exceeds the amount on the basis of which, tax payable is Rs 25,000 or more and has paid the tax on the basis of taxable income declared in the return or returns Provided that concession under this clause shall only apply for the tax year or years, for which the returns have been filed and for equal number of succeeding consecutive tax years.
It further says if tax paid for the succeeding tax years is at least equal to tax paid for tax year 2012. The taxpayers shall not be entitled to claim any adjustment of withholding tax under the ordinance, collected or deducted during a tax year, for which a return is filed.
