FBR urged to issue income tax return form with budget

KARACHI: Tax practitioners have urged the Federal Board of Revenue (FBR) to issue draft income tax return form with the announcement of the federal budget to avoid date extension.

In a letter sent to the FBR chairperson, the Karachi Tax Bar Association (KTBA) pointed out various issues on the draft income tax return forms for individuals and Association of Persons (AOPs) issued on July 13. The KTBA said the draft form should be issued with the budget and finalised and made available on the first day of July. It also said the forms were available only for individuals and AOPs, so companies with special tax year were not able to review their return forms.

It pointed out that as per section 114(1) a non-resident Pakistani citizen was not required to file return unless they earned an income in Pakistan. However, the draft return form contains a new requirement for non-residents, which, the KTBA urged should be removed.

They also pointed out that at the time of filing the wealth statement asks for town code, which was neither available nor defined in the draft return form. Also, the town system does not exist in Karachi anymore, and since last quarter of 2013, the city was divided into District Municipal Corporations.

“For the salary return form, field for tax deducted U/s 149 is not available. This anomaly is found in the IRIS. The draft return on the IRIS is also not computing tax payable on salary,” the KTBA letter said.

Wealth statement only shows account number and other information such as bank and branch names, it was suggested to add the address. “Senior citizen’s rebate is not being calculated on IRIS.”

During the last year, ‘import from previous return’ feature was enabled to facilitate taxpayers, which required mandatorily capturing of all data. The bar suggested that ‘page-wise import’ feature should be enabled so that taxpayers could select only the required data. Tax professionals also suggested automatically generating a refund form where applicable.