Daily Tax News

The Federal Board of Revenue (FBR), Friday, issued detailed guidelines for taxpayers to pay tax on immovable properties under section 7E of the Income Tax Ordinance, 2001. The guidelines have been placed on the FBR website for the facilitation of the general public. The FBR has issued guidelines for both registered and unregistered users. The FBR has guided the taxpayers on how a taxpayer can pay the tax on immovable property. Under the owner portion of the IRIS page, the user must enter the particulars of Registering/Transferring Authority of Immovable Property i.e. province, District; Complete Address; Town/Tehsil; City/ District and total area. A question will be asked whether the property is constructed or not. User will have two options i.e., yes/no. In case the user selects the yes radio button then the system will ask the user to enter the covered area. In case of “no”, the user will move on to the next area. The next area will be the value of property and tax computation. The u...

Member Legal (Inland Revenue) Federal Board of Revenue (FBR) admitted before Federal Tax Ombudsman (FTO) that the lower forum of Commissioner Inland Revenue (Appeals) under the law of precedent is bound to follow the decision of the higher appellate fora (Appellate Tribunal). It is reliably learnt that on the basis of a public interest complaint moved by Waheed Shahzad Butt, Advocate, the office of FTO had issued notice to the Member Legal to submit a reply to the allegations contained in the complaint and appear before the FTO at Regional office at Lahore. The FTO is probing the allegations of maladministration as to why the FBR’s legal wing is not vigilant to respond to queries raised by the taxpayers. In his comments before the office of the FTO in the subject matter, FBR Member Legal informed that it is a settled proposition that the lower fora under the law of precedent are bound to follow the decision of the higher appellate fora. The question with regard to following or non-foll...

The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to provide tax relief to 20 female low-paid employees working as teachers on temporary/adhoc basis at the Women University, Multan. In this regard, the FTO has issued directions to the FBR on Monday. The order caters to extend relief in tax deduction in terms of Section 153(1)(b) of the Income Tax Ordinance, 2001 (the Ordinance) of low-paid employees allowed on the strength of decisions which have been upheld by the President vide orders dated August 15, 2022 on identical issue. The teachers from the WUM, Multan have confirmed that they are exclusively engaged in the teaching activity on semester basis with the University as temporary/visiting faculty and their annual receipts did not exceed Rs 600,000 in Tax Year 2023. The alleged departmental practice to subject the remuneration of low-paid adhoc/temporary employees has been examined in these orders in the light of relevant legal provisions i.e. Sections ...

The Federal Board of Revenue (FBR) has said that a completely paperless environment for taxpayers is not possible due to the documentation requirements under the tax laws. The FBR’s new report (Stakeholder Engagement Plan) on reforms revealed that one of the areas of reform is the automation of FBR processes. As per FBR team, in practical terms, a completely paperless system is not possible and documentation is also necessary. The report said that concerning the case history of an individual or organisation, access to full documentation files, which are comprehensive and contain a detailed history, is important for processing cases and making informed decisions. The files are sometimes large and cover many years; hence this process of automation should be gradual to allow for complete files to be available electronically. The taxpayers need to be taken on board and their issues and grievances addressed. Taxpayer outreach is a big issue. It is critical to sensitize people on the importa...

FBR has launched a massive recovery drive against tax defaulters in all major cities of the country. The decision was taken at the highest level to recover outstanding dues against the tax defaulters under the enforcement exercise of the FBR. In this regard, the FBR has compiled a list of nearly 11,000 tax defaulters and communicated the names to the relevant tax jurisdictions and field offices for initiation of recovery proceedings under the relevant provisions of the law. The tax defaulters, belonging to the areas of Karachi, Lahore, Faisalabad, Rawalpindi, and Multan, included industrial units, factories/mills owners, wholesalers, property dealers and traders. The FBR will complete all legal formalities before taking extreme action like arrests of the tax defaulters and opportunity would be provided to respond to the notices served on them. The FBR has already initiated recovery proceedings against super-rich people, who were reluctant to pay the Capital Value Tax (CVT) to the tune ...

FTO has directed the Federal Board of Revenue (FBR) to bar the officers of Audit Cadre in Inland Revenue Service (IRS) from assigning assessment-related functions/duties and withdraw a penalty order against tier-1 retailers. Briefly, the Complainant, an individual falling under Tier-I Retailer, is aggrieved against impugned 0I0 No.413 of 2021 passed by Inland Revenue Audit Officer (IRAO) Enforcement-II, CTO Karachi allegedly imposing penalty of Rs1,000,000 on account of non-integration with POS without lawful authority and beyond his jurisdiction. As per complaint, the said Officer did not have any authority to issue the impugned order of penalty in view of Sindh High Court decision wherein the High Court confirmed the administrative decision of the FBR that the Officers of Audit Cadre in IRS shall not be posted as Unit Incharge in field formations and shall not be assigned assessment related functions and duties. In addition, Lahore High Court in case of Shahbaz Hussain Vs Federation ...

 The Federal Board of Revenue (FBR) has proposed to introduce the concept of “Best judgment Assessment” in the sales tax law for accurate assessment and recovery of sales tax from the registered persons. The FBR has proposed to replace the existing section 11 (Assessment of Tax & Recovery of Tax not levied or short levied or erroneously refunded) of the Sales Tax Act 1990 with the new section. The provisions of assessment has been proposed to be harmonized with the income tax law. The section 11 has been divided into sub-sections under the proposed sales tax law. Under the proposed section 11 of the Sales Tax Act, where a person, (a) fails to furnish a sales tax return in response to notice; or (b) fails to produce before the Deputy Commissioner under section 25 or 38A, accounts, documents and records required, or any other relevant document or evidence that may be required by him, the Deputy Commissioner may, after a notice to show cause to such person, based on any available ...

PTBA leadership has urged Chairman Federal Board of Revenue (FBR) to look into the matter of changes in the IRIS module making compulsory for the tax payers to worked out their tax liability under section 7E personally and issue directions to the relevant authorities to provide ease to the tax payers in submitting their tax returns. In a letter, PTBA President Rana Munir Hussain and Secretary General Ch Qamar-Uz Zaman said the IRIS module on the portal has been changed to make it compulsory for the tax payers to worked out their tax liability under section 7E of the Income Tax Ordinance, 2001, which is illegal and without lawful authority. When a large number of returns for the Tax Year 2023, have been submitted through IRIS 2.0, a check has been imposed on 1st September 2023 to make it mandatory to fill/ submit Form of 7E about capital assets before the filing of return of income for the tax year 2023. It is also pertinent to mention here that all the properties (Capital Assets) as de...

  The Federal Board of Revenue (FBR), on Friday 1st September 2023, launched an automated portal for taxpayers to obtain exemption certificate or to pay tax under section 7E of the Income Tax Ordinance, 2001. The new system would operate in parallel with the old system to give an option to the taxpayers to use the new online system or the old one to avoid any inconvenience to the taxpayers. The special dedicated payment challan for non-filers has also been launched under the new automated system. The updated software of the FBR has been launched and would now be available to taxpayers pertaining to Section 7E from September 1, 2023. The taxpayer can now obtain an exemption certificate while sitting at home or pay tax or generate Challan without going to the commissioner. The FBR has introduced an online facility for all citizens in the “IRIS” updated system to grant exemption or pay one percent tax under section 7E on immovable properties without going to the Commissioner Inland Re...