All e-filers are liable to file wealth statement; FBR withdraws Rs1 million threshold

KARACHI: Each individual filing income tax return for tax year 2015 is required to file wealth statement as well. This condition has become mandatory after the withdrawal of threshold of Rs 1 million that was available in the past years.

After this mandatory requirement salaried persons drawing annual income above Rs400,000 and Individual business persons having income Rs300,000 per year will file wealth statement along with income tax returns for tax year 2015.

According to instructions of Federal Board of Revenue (FBR) the following persons are required to furnish a return of income for a tax year:
(a) Every company;
(b) Every person (other than a company) whose taxable income for the year exceeds PKR 400,000;
(c) Every non-profit organization as defined in clause (36) of section 2;
(d) Every welfare institution approved under clause (58) of Part I of the Second Schedule;
(e) Every person who has been charged to tax in respect of any of the two preceding tax years;
(f) Every person who claims a loss carried forward under this Ordinance for a tax year;
(g) Every person who owns immovable property with a land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
(h) Every person who owns immoveable property with a land area of five hundred square yards or more located in a rating area;
(i) Every person who owns a flat having covered area of two thousand square feet or more located in a rating area;
(j) Every person who owns a motor vehicle having engine capacity above 1000 CC;
(k) Every person who has obtained National Tax Number;
(l) Every person who is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;
(m) Every person who is registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan;

(n) Every individual whose income under the head Business exceeds PKR 300,000 but does not exceed PKR 400,000 in a tax year.

The FBR instructions said that following errors / omissions will make a return invalid and make the taxpayer a non-filer and liable to penalty under section 182(1):
(a) Return on which CNIC is missing or incorrect or invalid;
(b) Return on which mandatory fields marked by * are empty;

(c) Return which is not signed by the Taxpayer or his Representative (as defined in section 172 of the Income Tax Ordinance, 2001);

(d) Return which is not filed in the prescribed Form;
(e) Return which is not filed in the prescribed mode.
Individuals deriving income under the head Property, Capital Gains & Other Sources (excluding Salary / Business) & Income subject to fixed / final tax have to file one page Return in IT-1B Form with Annex-A, Annex-F & Wealth Statement if required to be filed.

Individuals deriving income under the head business or falling under Final Tax Regime (FTR) such as Commercial Importers, Exporters, Contractors, etc. have to file two page Return in IT-2 Form with Annex-A, Annex-B, Annex-F & Wealth Statement if required to be filed. Annex-C, Annex-D & Annex-E are required only where Depreciation / Amortization, Admissible / Inadmissible Deductions & Minimum Tax Chargeable / Option out of Presumptive Tax Regime are involved.
Individuals, including members of AOPs or directors of Companies must file Wealth Statement.
Taxpayers may file Return of Total Income / Statement of Final Taxation & Wealth Statement through the following modes:
Electronically at FBR Portal (https://iris.fbr.gov.pk/infosys/public/txplogin.xhtml) which is mandatory for all Companies, AOPs, Sales Tax Registered Persons, Refund Claimants & Individuals having income under the head Salary. However, all others are also encouraged to electronically file Return;

The FBR said that tax can be paid in any authorized branch of National Bank of Pakistan (NBP) and State Bank of Pakistan (SBP) at any time before filing of return. List of authorized braches of NBP & SBP can be downloaded from http://www.fbr.gov.pk.

Only Foreign Income (Not Loss) should be declared.
Only Agriculture Income (Not Loss) should be declared.
Tax Credits include Tax Credits for the following:
Share in Taxed Income from AOP;

Charitable Donations u/s 61;

Investment in Shares of Public Companies listed on a Stock Exchange in Pakistan (only for Original Allottee other than a Company) u/s 62;

Life Insurance Premium (only for Resident Individual deriving income from Salary / Business) u/s 62;
Contribution to Approved Pension Fund (only for Pakistani Individual registered with FBR / NADRA deriving income from Salary / Business) u/s 63;

Profit or Share in Rent or Share in Appreciation of Value of Property paid on loan invested in property u/s 64.
Taxpayers wanting to opt out of Presumptive Tax Regime (PTR) u/c (56B), (56C), (56D), (56E), (56F), (56G), Part IV, Second Schedule, must file Annex-E.

Only Personal / Household (Non-Business) expenses should be declared.

Expenses borne by more than one person must be declared in total by each person. For example, if in one family more than one member is contributing to expenses or if more than one family is living jointly & within each family more than one member is contributing to expenses, total expenses under each head must be declared by each member of each family filing his wealth statement & then contribution by other family members be deducted to arrive at own contribution.

If rows provided in any segment are inadequate, additional rows may be inserted.
All assets must be declared at cost, including ancillary expenses.

If an asset is acquired under a Hire Purchase Agreement, total price should be declared as asset under the appropriate head & balance payable amount should be declared as liability.

If Wealth Statement is filed for the first time, separate Reconciliation Statement must be filed for each previous year.

Equipment, Plant, Machinery (Non-Business) must be declared with description, for example, Generator, Tubewell, Harvestor, Tractor, Trolley, etc.

Assets created in the name of spouse(s), children & other dependents should be declared only if acquired by them with funds provided by you (Benami Assets).

value of perquisites, 1/10 of goodwill from tenant, 1/10 of goodwill on vacating possession of property, repairs allowance, admissible / inadmissible deductions, brought forward losses, unabsorbed depreciation / amortization.

source:pkrevenue.com