NOTIFICATION

(Income Tax)

The following amendments/additions have been made by FBR through SRO. 1065(I)/2013 dated 20-12-2013:-

In Part IV of the Second Schedule to the Income Tax Ordinance, 2001, four new clauses (85), (86), (87) and (88) have been added.

Clause 85: By virtue of insertion of clause (84) through SRO. 1040, the tax payers who, for Tax Year 2013, revised their returns by paying 25% excess tax on their income as compared to the Tax Year 2012 shall be granted immunity from audit. Now through insertion of clause (85) such tax payers do not need approval of the Commissioner for revision of return.

Clause (86): The said clause states that source of income shall not be questioned if:

(a)   1. Investment is made by an individual in a Greenfield industrial undertaking:

1. Directly; or
2. As an original allottee in the purchase of shares of a company establishing an industrial undertaking; or
3. Capital contribution in an association of persons establishing an industrial undertaking.
4. Investment made by an AOP in an industrial undertaking.
5. Investment made by a company in an industrial undertaking.

This facility will be available only if investment has been made on or after 1st January, 2014, and commercial production commences on or before 30^th June, 2016.

(b)  The concessions given in this clause will also apply to investments made in:-

i.                        Construction industry in corporate sector,

ii.                        Low cost housing construction in the corporate sector,

iii.                        Livestock development projects in the corporate sector,

iv.                        New captive power plants,

v.                        Mining and quarrying in Thar coal, Balochistan and Khyber Pakhtunkhwa.

(c)  The concessions given in sub-clause (a) will not be available to investment made in :-

i.                        Arms and ammunitions

ii.                        Explosives

iii.                        Fertilizers

iv.                        Sugar

v.                        Cigarettes

vi.                        Aerated beverages

vii.                        Cement

viii.                        Textile spinning units

ix.                        Flour mills

x.                        Vegetable ghee and

xi.                        Cooking oil manufacturing

(d)  The term Greenfield industrial undertaking will include expansion projects for the purpose of this clause.

(e)  Immunity under this clause will not be available to proceeds of crimes relating to offences under the following laws:

i.                        Control of Narcotics Substances Act, 1997;

ii.                        Anti Terrorism Act, 1997; and

iii.                        Anti-Money Laundering Act, 2010.

Clause (87): Through this clause opportunity for the filing of income tax return has been given to those individuals who hold National Tax Number, but did not file income tax return for the tax year 2008 to 2012. Such person in the Form-A can file income tax return on or before 28.02.2014 by paying minimum tax of twenty thousand rupees for each year. The taxpayer shall not be entitled for any adjustment of withholding tax collected under this Ordinance.

Such person will be granted with immunity from penalty (Sec 182), default surcharge (Sec 205) and audit (Sec 177 and 214C).

Form A can be obtained from the following link.

http://download1.fbr.gov.pk/SROs/2013122018121641822013SRO1065.pdf

Clause (88): Through this clause immunity from penalty (sec 182), default surcharge (sec 205), audit (sec 177 and 214C) shall be available to the individual who has filed his return(s) by 28-02-2014 for any or all of the tax years from 2008 to 2012, and

i.            has not filed any return for the last five years;

ii.            is not an NTN holder as on 28^th November, 2013;

iii.            declares taxable income for the year which exceeds the amount on the basis of which, tax payable is twenty five thousand rupees or more; and

iv.            has paid the tax on the basis of taxable income declared in the return(s):

The concession under this clause shall only apply for the tax year or years, for which return(s) has been filed and for equal number of succeeding consecutive tax years, provided that the tax paid for the succeeding tax years is at least equal to tax paid for tax year 2012. However, the taxpayer would not be entitled for any adjustment of withholding tax collected under this Ordinance. The due date for filing of return for tax year 2013, of individuals availing concessions under this clause shall be 28-02-2014.

Clause (30): In Part II of the Second Schedule clause (30) is added which reduces the rate of tax in column (3), against serial no. 2 in clause (1), in Division I of Part I of First Schedule to 5% from 10% for taxable income declared in a return for tax year 2012. This reduction is only for the tax payers who have filed their income tax return for Tax Year 2012 under clause (87) or (88) of the Part IV of the Second Schedule.