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FBR asks bank employees to ensure returns filing

Business

November 28, 2020

KARACHI: The Federal Board of Revenue (FBR) has asked banks to ensure income tax returns filing by their employees having taxable income.

The Large Taxpayers Office (LTO) Karachi - the major revenue collecting arm of the FBR ‚Äď sent letters to chief financial officers of 22 banks regarding non-filing of income tax returns by their employees.

Badaruddin Ahmed Qureshi, chief commissioner of LTO Karachi said the letters have been issued for broadening of tax base.

Qureshi said a large number of employees of banking companies are not filing their annual income tax return.

‚ÄúThey are under the impression that there is a source deduction of income tax on their salaries hence filing of income tax return is not called for,‚ÄĚ he said. ‚ÄúThis is a misconception which is against the provisions of tax laws.

The banks were informed that employees earning taxable income are required to file their income tax returns under a section (114 of the Income Tax Ordinance 2001).

If income of an individual chargeable under the head salary exceeds 75 percent of his taxable income and the taxable income exceeds Rs600,000 in a year, it is chargeable to tax as per different slabs.

The banks were informed that the compliance with the provisions of the law is essential to enable documentation of the economy.

Qureshi said the LTO Karachi started an awareness campaign for broadening the tax base. The tax office would send similar letters to other sectors of the economy to ensure compliance by employees working in the sectors, he said. The FBR in collaboration with non-government organisations’ volunteers namely Karsaz Education and Welfare Organization took an initiative to help in filing of income tax returns free of charges.

The chief commissioner said the tax officials trained volunteers of the non-government organisation to facilitate taxpayers in filing their income tax returns without any fee.

The FBR received 380,000 returns for the tax year 2019 from the taxpayers during the last eight months mostly pronounced by economic shutdown related to coronavirus outbreak, and the number is set to touch the three million mark. The number of return filers by February 29 for tax year 2019 was 2.53 million as per active taxpayers list issued on March 1. It means the FBR added 380,000 more returns since then. Number of income tax returns had been increasing despite coronavirus lockdown during the March-June period. The filing of income tax returns reached a record high of 2.91 million for tax year 2019 and it is heading towards the three million mark.