FBR makes wealth statement mandatory for taxpayers

KARACHI: The government has increased disclosure requirements for taxpayers in respect of assets and has made filing of wealth statement mandatory from the current fiscal year, sources said on Friday.
Sources in the Federal Board of Revenue (FBR) said the revenue body has introduced draft income tax return forms and wealth statement form for the tax year 2015.
In the previous years, the revenue body had allowed relaxation from filing the wealth statement by those persons having annual income less than Rs1 million.
The sources said the relaxation was available for the tax year 2013 as the government issued a SRO in November 2013 and further the amendment was made through insertion of Clause 82 to the Income Tax Ordinance, 2001 to allow the relaxation for the tax year 2014.
However, the amendments had been expired and no further extension has so far been granted under the Finance Act, 2015, which made it mandatory to every person having taxable income and required to file income tax return under the law also to submit income tax return.
Under Section 116 of the Income Tax Ordinance, 2001 every taxpayer being an individual filing a return of income for any tax year will furnish a wealth statement and wealth reconciliation statement for that year along with such return.
The FBR on the other side in the draft income tax return has mentioned that the persons having less than Rs1 million annual income are not required to file income tax return. However, this is conflicting to the law.
Raana Ahmed, Member IT, FBR, said that since the law is prime; therefore, it will prevail. "Practically there is no relaxation and every person required to file income tax return is also required to submit wealth statement," she added.
The FBR sources said that the tax authorities are considering to extend this relaxation for the year 2015, as well.
Muhammad Zubair, president of the Karachi Tax Bar Association, said that the revenue body should clarify as soon as possible because due to these impediments, it would not be able to receive substantial number of income tax returns.