Your Tax Obligation: Here’s What You Need To Know
A few weeks after the Last date of Income Tax Return Filing, FBR has started issuing letters to taxpayers who have filed NIL Tax Returns for tax year 2024 or paid less tax as compared to tax year 2023.
Cyclostyle letter i.e. Your Tax Obligation: Here’s What You Need To Know
Federal Board of Revenue has started cyclostyle emails/ letters to all taxpayers who filed their tax return for tax year 2024 and this letter crated panic amongst the taxpayers.
The Purpose of this letter/ email titled “Your Tax Obligation: Here’s What You Need To Know” is to tell the taxpayers that their current year’s tax paid/ charged is lesser than what they paid/ charged in tax year 2023 and FBR is providing an opportunity to taxpayers to re-check the figures / tax amount/ income/ revenue in their tax returns for tax year 2024 and revise the tax return voluntarily.
And in case the tax return is found to faulty by the FBR then they can start audit proceedings of the selected cases.
Reasons behind the EMAIL “Your Tax Obligation: Here’s What You Need To Know”
The only reason that Federal Board of Revenue was able to provide is the Inflationary Trend in the Economy. Meaning that in case of inflation the prices will go up and resultantly the income will increase so tax must also increase.
Given the prevailing inflationary trends in the economy and the anticipated growth in incomes, a decline in your reported tax liability raises concerns. Such a discrepancy suggests potential underreporting of income, which has automatically placed your return in the high-risk category for mandatory audit as per the applicable tax regulations.
What to do with this Email?
Here is what you need to do:
Re-check Calculation Tax Return for tax year 2024
Please check tax calculation of the submitted tax return for tax year 2024 and in case of any discrepancy revise the tax return by attaching reasons to revise.
Look for Errors in Tax Return
Re-visit your submitted tax return or have it reviewed it by Professionals to look for errors/ mistakes that might have been in the tax return.
After careful examination of the tax return if you are satisfied that the tax return as filed is correct then leave it be and in case you feel that there has been an error/ mistake in tax return then you can revise the tax return and consider this as an opportunity to taxpayers to re-check the figures / tax amount/ income/ revenue in their tax returns for tax year 2024 and revise the tax return voluntarily.
Following is the content of the said email to taxpayers, that created panic :-
Dear Sir/Madam,
Reg #: 3520000000000
Name: MUHAMMAD
Our records show that the total tax you deposited for the year 2024 is less than what you deposited in 2023 by Rs.438,098.
For reference:
Total Tax Deposited in 2023: 503,788
Total Tax Deposited in 2024: 65,690
Given the prevailing inflationary trends in the economy and the anticipated growth in incomes, a decline in your reported tax liability raises concerns. Such a discrepancy suggests potential underreporting of income, which has automatically placed your return in the high-risk category for mandatory audit as per the applicable tax regulations.
Please be advised that the law grants you the opportunity to revise your return within 60 days of filing to rectify any errors or omissions. We strongly encourage you to review your financial information, declare your true income, and submit any additional tax owed to the national exchequer.
This communication is not a legal notice, but it serves to inform you about the risks and responsibilities associated with providing inaccurate information on your tax return.
We value your cooperation in maintaining the integrity of our tax system and contributing to national development. Should you have any questions or require assistance in revising your return, please contact your designated tax office.
