ISLAMABAD: Federal Board of Revenue (FBR) launched crackdown against non-filers of income tax returns for tax year 2020.
Taxpayers including salaried persons, business individuals, Association of Persons and corporate entities, who were required to file their returns by due date i.e. September 30, 2020 extended up to December 08, 2020, have received notices of non-compliance.
The taxpayers have received notices to file their returns for tax year 2020 along with payment of fine and penalty.
The FBR issued the finalized return form for tax year 2020 on September 08, 2020 for which the last date was September 30, 2020. Tax bars of the country advised the FBR that taxpayers should be given 90 days for filing returns as per statute.
Therefore, the FBR extended the date up to December 08, 2020 in one go and made it clear that no further date extension would be granted.
The FBR by December 08, 2020 and received around 1.8 million income tax returns for tax year 2020. Further, around 300,000 taxpayers got date extension after filing applications on the last date.
It means that the number of return filers, who made compliance of the due date, reaches to around 2.1 million for tax year 2020. It means a large number of taxpayers are required to file their returns with payment of fine and penalty.
Following is the Section 182 of Income Tax Ordinance, 2001 under which fine and penalty would be imposed on non-compliant taxpayers:
Under Section 182:
Where any person fails to furnish a return of income as required under section 114 within the due date.
Such person shall pay a penalty 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 as aforesaid is less than forty thousand rupees or no tax is payable for that tax year such person shall pay a penalty of forty thousand rupees:
Provided that If seventy-five 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 five thousand Rupees.
Where any person fails to furnish wealth statement or wealth reconciliation statement then such person shall pay a penalty of 0.1% of the taxable income per week or Rs.100,000 whichever is higher.
The late filers will also require to pay a fee for appearance in Active Taxpayers List (ATL) for tax year 2020, which will be issued on March 01, 2021.
Section 182A. Return not filed within due date.—(1) Notwithstanding anything contained in this Ordinance, where a person fails to file a return of income under section 114 by the due date as specified in section 118 or by the date as extended by the Board under section 214A or extended by the Commissioner under section 119, as the case may be, such person shall—
(a) not be included in the active taxpayers’ list for the year for which return was not filed within the due date:
Provided that without prejudice to any other liability under this Ordinance, the person shall be included in the active taxpayer ‘ list on filing return after the due date, if the person pays surcharge at Rupees-
(i) twenty thousand in case of a company;
(ii) ten thousand in case of an association of persons;
(iii) one thousand in case of an individual.
Persons fail to comply with filing requirement can face harsh action including imprisonment.
Section 191. Prosecution for non-compliance with certain statutory obligations. —(1) Any person who, without reasonable excuse, fails to —
(a) comply with a notice under sub-section (3)and sub-section (4) of section 114 or sub-section (1) of section 116; shall commit an offence punishable on conviction with a fine or imprisonment for a term not exceeding one year, or both.
(2) If a person convicted of an offence under clause (a) of sub-section (1) fails, without reasonable excuse, to furnish the return of income or wealth statement to which the offence relates within the period specified by the Court, the person shall commit a further offence punishable on conviction with a fine not exceeding fifty thousand rupees or imprisonment for a term not exceeding two years, or both.
Section 192: Prosecution for false statement in verification. — Any person who makes a statement in any verification in any return or other document furnished under this Ordinance which is false and which the person knows or believes to be false, or does not believe to be true, the person shall commit an offence punishable on conviction with a fine upto hundred thousand rupees or imprisonment for a term not exceeding three years, or both.
