Benefits of Being a Filer in Pakistan
Before we discuss about benefits of being a filer in Pakistan we should know that there are many benefits of filing income tax returns in Pakistan whether salaried individuals or businesses but most of the taxpayer only know a thing or two about being a filer in Pakistan.
Most of the salaried persons don’t know much and seems to be afraid in filing income tax returns.
For salaried persons in Pakistan tax is deducted at source by their respective employers and they are paid salary net of taxes.
Majority of salaried individuals don’t have their National Tax Number (NTN) and resultantly they don’t file income tax returns which makes them non-filers and they end up paying excessive taxes.
These people can enjoy the maximum benefit of filing taxes as they are already paying their taxes.
Section 182A as introduced in Finance Act, 2018 speaks about very important issue for tax year 2017 coming up ahead.
182A. Return not filed within due date.
(1) Notwithstanding anything contained in this Ordinance, where a person fails to file a return of income under section 114 by the due date as specified in section 118 or by the date as extended by the Board under section 214A or extended by the Commissioner under section 119, as the case may be, such person shall
(a) not be included in the active taxpayers’ list for the year for which return was not filed within the due date; and
―Explanation.— For the removal of doubt it is clarified that the provisions of this section shall apply from tax year 2018 and onwards for which the first Active Taxpayers List is to be issued on first day of March, 2019 under Income Tax Rules, 2002.; and
(b) not be allowed, for that tax year, to carry forward any loss under Part VIII of Chapter IV.”;
Why deadline of 23rd June 2018?
Since the first active taxpayers list is to be issued on 1st March 2019 and the list is issued weekly on each Monday so that makes 23rd June 2018 the last Monday falling in Tax year 2018 for tax return filing on tax year 2017.
According to this section, if a person fails to file Income Tax Return for the tax year 2017 by 23rd June 2018 they will not be included to File List till 1st March 2019. If the tax payer file Tax return after 23rd June 2018 then it will not be included in ATL (Active Taxpayers List) as the list will be updated on 25th June 2018.
Note: Next Active Taxpayers List (ATL) would be updated on 1st March 2019.
- No new car can be booked, purchased or registered.
- Property above 5 million cannot be purchased by non-filers.
Here I would like to state few benefits of being a filer in Pakistan: –
- It is not only the government who owe to public to provide basic facilities, it is also the General public who owes to Government for discharging their legal obligations of paying taxes and filling with FBR. So first advantage is you are discharging your obligations and you are not in fault.
- You will save half taxes on your bank transactions as compared to those who are non-filers.
- You will save minimum PKR 20,000/ which you could be liable if you don’t file tax returns.
- You will save half of the token tax as compared to non-fillers.
- You will save on registration and transfer of vehicles.
- You will have to pay less taxes on sale/purchase of Property.
- If you are in business, withholding taxes will be deducted on your invoices will be less as compared to non-fillers.
- Tax deducted at source by Banks will be lesser if you file the return otherwise it will mount up.
Following table throws light on the benefits of becoming a filer:
| S.# | Activity | Tax Applicable | ||
| Non-Filers | Filers | |||
| 1 | Banking Transactions | |||
| a | Withholding on Cash Withdrawal over Rs.50,000 | 0.6% | 0.3% | |
| b | Withholding on Bank Transfer, Cheque, Demand
Draft, Purchase Order exceeding Rs.50,000 |
0.4% | 0% | |
| 2 | Purchase of Vehicles | |||
| a | Under 851CC | Rs 10,000 | Rs 10,000 | |
| b | 851CC – 1000CC | Rs 25,000 | Rs 20,000 | |
| c | 1001CC – 1300CC | Rs 40,000 | Rs 30,000 | |
| d | 1301CC – 1600CC | Rs 100,000 | Rs 50,000 | |
| 3 | Registration of Vehicles | |||
| a | Under 851CC | Rs 10,000 | Rs 10,000 | |
| b | 851CC – 1000CC | Rs 25,000 | Rs 20,000 | |
| c | 1001CC – 1300CC | Rs 40,000 | Rs 30,000 | |
| d | 1301CC – 1600CC | Rs 100,000 | Rs 50,000 | |
| 4 | Transfer of Registration of Vehicles | |||
| a | Under 851 CC | Rs 5,000 | Rs 0 | |
| b | 851CC – 1000CC | Rs 15,000 | Rs 5,000 | |
| c | 1001CC – 1300CC | Rs 25,000 | Rs 7,500 | |
| d | 1301CC – 1600CC | Rs 65,000 | Rs 12,500 | |
| 5 | Transfer of Property | 2% | 1% | |
Want to become a filer and enjoy benefits? Contact us info@thebscon.com, T: +92 321 8408828
To know about Tax Structure in Pakistan click here.
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