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August 6, 2020

FBR fails to launch return forms for tax year 2020

Business

August 6, 2020

KARACHI: The Federal Board of Revenue (FBR) has yet to issue returns form for the tax year 2020 with filing deadline under the law falling in two months, increasing likelihood of extension in filing deadline, tax practitioners said on Wednesday.

Zeeshan Merchant, president of Karachi Tax Bar Association said the FBR needs to grant three months time for filing of income tax return from date of issuance of final income tax return form in the case where date is due on September 30 and six months in those cases where due date is December 31.

“The FBR did not issue a draft return form for consultations with the stakeholders,” he said.

“The draft return form requires around 15 days to finalise the form and make it a statutory document.

The annual income tax return filing is due on September 30 every year for all taxpayers except for those corporate entities having financial year close till June 30.

Therefore, the income tax return for tax year 2020 for taxpayers including salaried persons, business individuals, individuals falling in final tax regime and corporate entities falling under special tax year is due by September 30.

As per the rules the taxpayers falling under this category should be allowed to file their annual return from July 1 and FBR needs to finalise the return form by June 30 every year after incorporating changes introduced through the budget.

As usual the FBR this year again failed to introduce the return form for tax year 2020 despite a lapse of one month, which will result in extension in last date of return filings, sources said on Wednesday.

A senior FBR official said the FBR would further simplify the mobile application for return filing by salaried class.

The official further said the FBR is finalising the draft form for individuals and companies and would issue the same soon.

The official said the filing date has already been extended up to September 30 by incorporating amendment to Income Tax Ordinance, 2001 through Finance Act 2019.

Every year FBR has to extend the date for filing income tax returns due to late issuance of return forms.

Tax experts said the FBR should finalise the return forms as the number of return filers is rising every year.

The FBR has received around 3 million income tax returns for tax year 2018 and around 2.75 million for tax year 2019, which would increase due to mandatory requirement for availing reduced rate of withholding tax.