The last date to file your income tax return is coming (September 30th), but no reminders by FBR so far.
That’s because of the possible extension in the deadline.
Did you remember the last year’s (2018) filing date? It was extended up to August 9th, 2019.
So, people tend to be lazy as they know the extension is a must, and so does our tax system; not even bothered to remind people in time.
In my opinion, there should be no extension whatsoever in the tax filing date. If you want to favor the late filers, Reduce their late filing fee, and that would be enough.
But keep the last date fixed.
Anyway, the whole argument creates an opportunity to know whether you are required to file your income tax return.
Let’s discuss it.
When to File an Income Tax Return?
Section 114 of the Income Tax Ordinance 2001 explains it. In short, the tax statement is a must in the following cases:
1. For every company
2. When your income exceeds the exemption limit.
For example, a salaried person is exempt from tax for an income of up to Rs 600,000. If he makes more than that, he will file a tax return.
3. Non-Profit Organizations
4. Welfare Institutions
5. When tax is charged in any of the two preceding tax years.
6. If you claim a loss under the Income-tax ordinance 2001.
7. When you own a property of 500 square yards (16 marlas) or more in Cantonment, Islamabad capital territory (ICT) or in a Rating area.
8. If you own a flat of any size in Cantonment and ICT, or of 2000 sq feet in a Rating area.
9. For a car owner with engine capacity of 1000 CC or above.
10. If you have a national tax number (NTN).
11. Commercial/Industrial electricity connection holder if the annual bill exceeds Rs 500,000.
12. When your income from business exceeds Rs 300,000.
Income from business is exempt from tax up to Rs 400,000, but if your income crosses Rs 300,000, you will have to file a return even if it is less than Rs 400,000.
13. When your foreign income exceeds 10,000 USD, or if you have foreign assets equal to 100,000 USD or more.
This condition is applicable only on resident Pakistanis. Non-residents are exempt.
14. For members of Chamber, trade associations, any professional body, Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council, Institute of Chartered Accountants of Pakistan, and Institute of Cost and Management Accountants.
This is also for residents only.
So, if you fit in any of the above, get ready to file an income tax return.
The last date to file an income tax return is September 30th, and FBR didn’t issue any circular/notification until now to ask people to file tax returns in time.
So, to remind ourselves, we talked about the situations when filing a tax return becomes mandatory.
Are you going to file your tax return before the deadline?