The Federal Board of Revenue (FBR) has announced that there would be no extension in the last date of filing the tax returns for 2021, after multiple extensions which have garnered it new filers to submit returns for the fiscal year 2021-2022.
Since most people have relied on e-filing their tax returns via FBR’s Iris portal, and since the tax authority has warned of serious consequences for people failing to update their accounts, about 150,000 returns were filed on Sep 28 alone, just two days before the earlier deadline (Sep 30).
Tax Ordinance 2021:
The president promulgated the Tax Laws (Third Amendment) Ordinance 2021 for allowing the Federal Board of Revenue (FBR) to share its data with the National Database and Registration Authority (NADRA) with the objective to broaden the tax net.
NADRA shall share its records and any information available or held by it with the Board, as per the ordinance.
The ordinance contains strict penalties for persons who do not file tax returns. A penalty of Rs 1,000/- per day of default has been included in the Ordinance.
The government has also increased the amount of penalty for tier-1 retailers who are not integrated with the FBR and imposed an additional advance tax on rates ranging from 5% to 35% on professionals using domestic electricity connections.
The Ordinance identifies professionals as accountants, lawyers, doctors, dentists, health professionals, engineers, architects, IT professionals, tutors, trainers, and other persons engaged in the provision of services.
Benefits of filing tax returns:
Following are the main benefits that you can avail if you file the tax returns within October 15.
1. Lower rates of tax deduction at source by banks on both profits and cash withdrawals.
2. Reduction on withholding tax (tax already deducted from your income and gains) when registering and transferring motor vehicles.
3. Lower rate of tax on buying and selling of property.
4. Lower withholding tax rate on capital gains on sale of securities.
5. Charges for tax on dividend will be lower.
7. Lower rate of withholding tax on prize bond winnings.
8. Allows you to claim back overpaid tax that has been withheld.
Demerits of not being on Active Taxpayers list (ATL):
Everything has merits and demerits when we have told you about the merits of filing tax returns and joining the Active Taxpayers List (ATL), listed below are the main demeirts if one fails to submit her or her returns within the deadline.
1. Withholding Tax will be charged at double rates
2. FBR Will assess the application tax without serving any notice
3. Legal action will be taken resulting into imprisonment of 1 to 3 years
4. Fine will be charged on late submission of Income Tax Returns
How you can file the tax returns from home?
The salaried persons and freelancers can log into the FBR’s online tax filing software IRIS and file their tax returns with an twinkling of an eye, so it would be better to file the returns as soon as possible without waiting for the last date to rush for filing the returns as chance mount that the system might crash as it crashed in the past.
For salaried individuals, FBR says thair Income Tax Return, Declaration form 114(I) has been provided on the website.
“Salaried person would need to complete the Declaration form 114(I) in order to successfully submit their Income Tax Return,” FBR website says.
It is a relatively easy procedure where you don’t to grind yourself through the legalese and technicalities. This tutorial should help you file your tax returns easily.
Following are the videos in Urdu language posted on the website of the Federal Board of Revenue (FBR) that are helpful for the new taxpayers, who are planning to file their returns by sitting at home.
