Penalty amount doubles for non-filer salaried persons

The Federal Board of Revenue (FBR) will recover a minimum amount of Rs10,000 as a penalty from salaried persons, who failed to file an income tax return during a tax year.

The minimum penalty has been increased from Rs5,000 to Rs10,000.

The changes have been brought through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through Presidential order on September 15, 2021. 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 per cent 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.

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