Home Business FBR doubles penalty amount for non-filer salaried persons

FBR doubles penalty amount for non-filer salaried persons

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ISLAMABAD: The Federal Board of Revenue (FBR) has doubled the minimum penalty amount, from Rs5,000 to Rs10,000, for salaried persons who fail to file an income tax return during a tax year.
The minimum penalty has been increased from Rs5,000 to Rs10,000 through the Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through a presidential order this week. The amendment has been introduced to Section 182(1) of the Income Tax Ordinance, 2001.
According to the amendment, where any person fails to furnish a return of income as required under Section 114 within the due date:
“Such person shall pay a penalty equal to higher of: (a) 0.1 percent of the tax payable in respect of that tax year for each day of default; or (b) rupees one thousand for each day of default: Provided that minimum penalty shall be -(a) rupees ten thousand in case of individual having seventy-five percent or more income from salary; or (b) rupees fifty thousand in all other cases:
“Provided further that maximum penalty shall not exceed two hundred percent of tax payable by the person in a tax year: Provided also that the amount of penalty shall be reduced by 75 per cent, 50 per cent and 25 per cent if the return is filed within one, two and three months respectively after the due date or extended due date of filing of return as prescribed under the law.”
The FBR has explained, “For the purposes of this entry, it is declared that the expression “tax payable” means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under sections 120, 121, 122 or 122D.” – TLTP