Tuesday, September 6, 2016

Details/documents required - Transactions on which tax is deducted and credit of which could be claimed

In order to submit income tax return as a business individual or AOP you may need following documents/details:
  1. In case you enjoy normal income of sales, purchases, you have to prepare your trading account comprising, gross sales, gross purchases (exclusive of sales tax), opening/closing stock and other direct and indirect expenses details. Special care should be given while mentioning opening stock in your trading account which is the closing stock of the previous year. In case you mention some other figure, there is a probability that your case will be selected for audit.
  2. In the equity folder please mention the details of your balance sheet. The data should comprise the machinery, figure, capital employed trade debtors/creditors. Figure of capital should (in normal circumstances) be less than the closing stock.
  3. If you are registered with sales tax as well one should have to mention his sales and purchases as per sales tax record, otherwise F.B.R. will issue you a notice indicating the discrepancies and you will be asked to reconcile the difference.
  4. You have to provide complete details of salaries paid during the year. These should be in consonance with the data declared in the withholding statements u/s 149, if you are obliged to e-file the same.
  5. Detail of rent paid during the year. In case rent is over Rs.150,000 you were required to deduct tax on the same otherwise the department can disallow the expense claimed on this account if the landlord is single.
6. Details of all other business expenses e.g. conveyance, communication, office supplies, lease charges, interest on business loan etc should be provide.
7. You should be in possession of copies of electricity, telephone/mobile phone certificates and bills of other utilities of business premises as well as of residence so that the expenses under these heads could be mentioned and you may know how much tax is deducted on your electricity bill and telephone/mobile bill.
8. In case of imports please mention the figure of imports under Final tax regime if the same are not consumed for self manufacturing.
9. In case tax is deducted on supplies/services or on contracts, a deduction certificate from the relevant institute/(s) should be made available to ascertain the figures and tax deduction details.
10. Please mention the detail of interest on business loan paid/financial charges paid on leased assets etc.
10. In order to fill in your wealth statement detail of any sort of loan as on 30.06.2015.
11. Bank statements of all the bank accounts maintained personally or in the name of business should be obtained from the banks. You have to mention the end balances as on 30.06.2015 in your wealth statement.
12. Certificate from banks regarding tax deduction on banking transactions/cash withdrawals as well as profits earned on bank deposits should be obtained to claim tax credits.
13. In case you have made any local or foreign trip, please keep the copy of air ticket in tact which contains the amount of income tax deduction which you can claim while submitting your income tax return
14. In case any investment is made in the shares of the company or mutual fund, detail of the same along with details of profits on sale of shares earned during the year please mention the same in the relevant column of “Final/Fixed/minimum tax” folder.
15. Any cash or capital dividend received should be mentioned in “Final/Fixed/Minimum tax” folder.
16. Detail of any function/gathering arranged in a marriage hall etc. along with invoice thereof so that credit of tax deducted may be claimed.
17. Tax is deducted by the educational institutions if the fee is more than Rs.200,000 per annum.
Following details
18. In case of purchase or sale of any vehicle during the year, copy of registration book/amount of consideration received.
19. Documents relating to any immovable or movable property acquired/sold during the year.
20. Detail of motor vehicles in your name e.g. make, engine capacity, year of acquisition, cost of acquisition and registration No.
21. Detail of token tax paid during the period 01.07.2014 to 30.06.2015
22. In case you have acquired any movable or immovable property on lease, the installments paid during the period 01.07.2014 to 30.06.2015.
23. Detail of any other income e.g.
a. Income from property (gross rent, tax deduction on rent [if any], property tax paid, insurance premium paid.
b. Details of profits earned on bank deposits/saving certificates etc. The following details should be provided:
i. Bank account No.
ii. Nature of deposits/saving certificates
iii. Gross profit earned during the year.
iv. Tax deductions made by the banks/National Savings
24. Detail of any foreign remittances received during the year.
25. Complete details of household expenses;
a. Gross amount of electricity bills
b. Gross amount of gas bills
c. Gross amount of telephone bills
d. Water bills
e. Insurance premium paid
f. Expenses on education of children.
g. Donation/zakat paid.
h. If you have joined any club detail of club fee.
i. In case any contribution in expenses is made by any other person, his/her NTN, name and amount contributed by him should be indicated.
26. Detail of any other income earned/gift/remittances received during the year.
27. In case of a withholding agents, copies of monthly withholding statements u/s 165/149.

Importance of electronic filing instead of manual return?

Previously, the taxpayers who submitted their income tax returns manually, as per policy of FBR, faced problems while paying token tax, vehicle registration fee, or making any banking transaction etc, as their returns were not entered in the electronic system by FBR officials. Due to this neglect of FBR officials the name of the taxpayers were not appearing in the Active Taxpayers List and the taxpayers who have filed their returns had to pay enhanced tax which was to be charged on the persons who had not filed their tax returns. So in the interest of taxpayers, it is advisable that all taxpayers should e-file the returns online.
In order to e-file online returns of taxpayers, who are not registered with FBR earlier, one has to obtain get himself e-enrolled with FBR using the following link.

Procedure for e-filing income tax return 2016

Procedure is very simple. The important thing is that you should have at least one mobile SIM in your name. After completing the procedure within five minutes you will receive your password and pincode while username will be your CNIC No. Save the password/pincode in your mobile and email to use the same in future for filing of income tax return for tax year 2016.
So in order to avoid any penalties/default surcharge for late submission of return it is advisable that you should e-file your return today without wastage of time as online system of FBR i.e. IRIS is not reliable and gone down time and again and create hassles for the users.

Getting ready to filing your tax return

How to submit/efile income tax return online for 2014, 2015 & 2016 as business individual/AOP


Easy guide for submitting income tax return and wealth statement for tax years 2014, 2015 and 2016 with FBR. Who is required to file income tax return and how to fill in the return is explained here.

How to file Income Tax Return for Tax years 2014 and 2015

Business individuals having net income of less than Rs.500,000 can file returns mannually, while all other individuals, Association of persons (AOPs) and companies are required to e-file their income tax returns and manual returns are no more acceptable. All individuals registered with Sales Tax are also required to e-file their returns. Tax returns for tax year 2016 can be filed by using the internet portal of FBR of iris . For the individuals having income less than Rs.500,000 can download return form from FBR website and after filling in the date submit the same in the local office of FBR.
For business/salaried individuals and AOPs the deadline for submission of return is 30th September 2016 which will be extended as is done all the years before.