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FBR to Impose 100 Percent Penalty for Not Mentioning Money in Tax Returns

FBR

Federal Board of Revenue (FBR) has started examination of income tax returns filed for tax year 2020 and directed tax offices to identify undisclosed income / amount for imposing 100 percent penalty.

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According to sources in the FBR the tax authorities had started examination of tax returns filed for the tax year 2020 and were cross matching with the information of database where details of transactions made by taxpayers had been stored.

The sources said that those taxpayers, who had failed to provide details of those transactions already available to the FBR through third party information, would pay tax at normal rate along with payment of penalty equal to payable tax detected as undisclosed.

The last date for filing the income tax return for tax year 2020 was December 08, 2020 and the FBR for the first time had not extended the date beyond the deadline. The number of return filers by due date was 1.768 million. However, enforcement measures through issuance of hundreds of thousands notices to non filers the number of return filers increased to 2.316 million January 04, 2021.

The sources said that the tax offices were examining tax returns with all aspects of Income Tax Ordinance, 2001. However, undeclared income or assets in the returns will be treated as concealment of income/assets.

Under Section 182 of the Income Tax Ordinance, 2001, where a person has concealed income or furnished inaccurate particulars of such income, including but not limited to the suppression of any income or amount chargeable to tax, the claiming of any deduction for any expenditure not actually incurred or any act referred to in sub-section (1) of section 111, in the course of any proceeding under this Ordinance before any Income Tax authority or the appellate tribunal.

“Such person shall pay a penalty of one hundred thousand rupees or an amount equal to the tax which the person sought to evade whichever is higher. However, no penalty shall be payable on mere disallowance of a claim of exemption from tax of any income or amount declared by a person or mere disallowance of any expenditure declared by a person to be deductible, unless it is proved that the person made the claim knowing it to be wrong.”

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