The government may announce an extension in last date for filing return of income and wealth statement for tax year 2020, sources said.
Today i.e. Tuesday December 08, 2020 is the last date for filing income tax returns for tax year 2020. As per Income Tax Ordinance, 2001 the last date for filing tax return is September 30. However, this year the income tax return form was finalized on September 08, 2020 and as per law taxpayers should be provided statutory time limit of 90 days. Therefore, the Federal Board of Revenue (FBR) on the demand of tax bars and other stakeholders, extended the date by 90 days in one go.
This 90-day period is expiring today and the FBR has made it clear that it will not further extend the date as statutory time limit had already been granted.
Tax bars and business community are continuously pressing the tax authorities to extend the date as online portal IRIS was making miscalculation.
The sources in FBR said it was agreed at the Board level that the deadline would not be extended further in order to stop the tradition of repeated extension and to ensure compliance by due date.
However, they said that the stakeholders including business community had approached the Prime Minister through the advisor on finance to intervene and allow a reasonable time for filing the annual return.
A large number of returns have already been filed on the FBR portal, especially the salaried persons conveniently filed their returns through wizard based application. To some estimates around half of the returns filers, who filed their returns for tax year 2020, has made compliance by evening of Monday December 07, 2020.
Therefore, to accommodate a number of around 1.5 million on the last date is impossible. The FBR issued instructions to the field offices to facilitate the taxpayers seeking date extension through commissioner approval. Further, the FBR also allowed extension to many taxpayers through one application.
Tax experts said that the date extension through commissioner approval was already available in the Income Tax Ordinance, 2001 and by this way this issue may not be resolved and there is need to allow general relaxation in timing.
One of the major issues creating hurdles is significant increase in coronavirus cases. Due to resurgence of COVID the government and private sector have already slashed the work force to the half. In this scenario the return filing process through tax consultants/practitioners and third party filing may be affected.
The sources said that extension in date may be announced later today evening.
Pakistan Tax Bar Association (PTBA) in its letter on December 02, 2020 urged the tax authorities to extend the last date for filing income tax returns up to January 31, 2020 after considering the significant rise in coronavirus cases in the country.
Many other issued highlighted by taxpayers and other stakeholders including calculation errors on the IRIS portal. The FBR sources said that these issues were discussed and most of those were resolved.