Income Tax

File An Income Tax Return In Pakistan With Lam Alif Law

Lam Alif Law is an Income tax consultant in Pakistan that provides affordable tax filing services. If your corporal affairs need extensive enlisting, the form filling seems like a hectic job with numerous sections and subsections to cover. Lam Alif Law offers the best income tax services in Pakistan. It only requires an upload of documents by you and our experts will prepare a draft of your Income Tax Return.

What Is Income Tax?

Tax is an involuntary fee imposed on an individual or a corporation by the federal government. It can be local, regional or even national. A tax set as per a person’s ability or income is called income tax. Therefore, income tax is the highly equitable form of taxation. By law, all capable individuals and businesses must file income tax every year. 

The government uses this collection of the tax to fund their activities and work. Lam Alif Law is one of the best income tax consultants in Pakistan, assisting the clients with matters on taxation. Income tax is progressive by nature; in a way, it reduces the economic disparity. The tax rates and method of calculating taxable income are different as per fiscal status of the taxpayer. Taxpayers are of several types; some of them are as follows.

    • Companies
    • Association of Persons (AOP)
    • Salaried individuals
    • Non – Salaried Individuals

Filing of Income Tax Returns

For an individual, filing income tax return is a tiresome and uninteresting process. Filing of income tax return in Pakistan involves a prolong calculation and writings, for which people spend long hours on working. It may become a stressful experience, even if it doesn’t include a large data. 

The reason is that it involves things that are not generally known to an individual. Also, there are specific deadlines to meet, which makes the process even more unnerving. The details on income tax filing in Pakistan are available under obligations of to file income tax declarations, issued by Federal Board of Revenue, Pakistan.

Who Needs To File Income Tax Returns?

Following is a list of people that are required to submit a return of income for a tax year under Income Tax Ordinance (2001). Check if you fall in any of these categories.

    • A registered company
    • An individual (other than a company) who has a taxable income for the year exceeding the maximum amount that is not chargeable to tax under this Ordinance for the year (Under PKR 400,000 as per Income Tax Ordinance 2001).
    • A non-profit organization as mentioned in clause (36) of section 2.
    • A welfare institution approved under clause (58) of Part I of the Second Schedule.
    •  Every individual subjected to tax in respect of any of the two preceding years.
    • Every individual claiming a loss to make progress with the Ordinance for a tax year.
    • An individual who claims an immovable property with a specific area (two hundred and fifty square yards or more) or any flat situated in regions that fall inside as far as possible existing instantly before the commencement of Local Government laws in the provinces; or zones in a Cantonment; or the Islamabad Capital Territory.
    • Every individual who possesses immovable property with a land area of five hundred square yards or more situated in a rating area.
    • Every individual who possesses a flat of area two thousand square feet or more situated in a rating region.
    • Every individual who claims to own a motor vehicle having engine capacity above 1000 CC.
    • Every individual who possesses a National Tax Number.
    • Every individual who is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds the prescribed limit (rupees five hundred thousand or more)
    • Every individual registered at any chamber of commerce and industry or any trade or business association or any market including Pakistan Engineering Council, Pakistan, Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan.
    • Every individual who has a business income that exceeds rupees three hundred thousand (PKR 300,000) but does not exceed rupees four hundred thousand (PKR 400,000) in a tax year.

What is Wealth Statement?

Every Taxpayer is bound to submit a Wealth Statement and Wealth Reconciliation statement for that year along with Income Tax Returns.It includes

    • All personal assets and liabilities.
    • Personal assets and liabilities of person’s spouse, child, minor or any other dependents.
    • Any asset that is transferred by the person to any other person during the tax year.
    • Total expenses encountered by the person, his spouse, children and all dependents during this period.
    • The Reconciliation Statement of Wealth.

What Are Tax Refunds?

A taxpaying individual who pays tax more than the amount, which the chargeable may also apply to the commissioner for a tax refund of the excess amount that is already paid. We at Lam Alif Law are here to help you to file for tax refunds and advice you on Income Tax Return, Wealth Statement with expert opinions by our legal team.

Step-By-Step Guide On Filing Taxes

  1. Check Your Status

Before registering online as a tax filer and submitting returns, it is necessary to go through the general process set by Federal Board of Revenue’s (FBR) recent SRO No. 981(I) 2017 from September 28. The salaried individuals have income no more than PKR 400,000 annually don’t need to pay any income tax. 

However, for transparency reasons, you are required to file your tax returns with the correct details. If the yearly income exceeds PKR 400,000, such an individual is subjected to income tax.

2. Register With FBR’s E-Enrolment System

Knowing that you are responsible for income tax next is to register with FBR. Here is a direct link to the site. .This site will take you to a form where detail filling is required. Previously, FBR was using separate portals for individuals and companies. But now, the process is combined.

3. Prepare And Submit Documents

After signing up at the online portal, you will see a few categories to select. From here you will choose the respective category and fill it. FBR will confirm your account after you submit. Now, you can file your tax returns and wealth statements.

If online option is not suitable, you can do it manually by file your returns on paper at Taxpayer Facilitation Counters of the respective Regional Tax Office. Paper Return Form is available for downloaded at FBR’s website as well. This process may look similar but know that these are a basic guideline to file tax in Pakistan. 

It is better to seek professional consultancy from experienced taxation lawyer. Our lawyers at Lam Alif Law are experienced to help you fill these forms especially if you are a new taxpayer or a businessman.

The Penalty For Non-Filing Income Tax Return

When an individual otherwise subjected to file income tax return (under section 114) fails to file it within the due time, he is exposed to a penalty, equivalent to .1% of the Tax payable in that year, for each day of default subject an extreme penalty of 50% of the tax payable. 

If penalty worked out as aforementioned is less than twenty thousand rupees (PKR 20,000/-), no fee is payable for that respective year; such person shall pay a penalty of twenty thousand rupees.

Cases When Income Tax Returns Is Unsuccessful

Remember, your Income Tax Returns will not be entertained in some instances. Section 182(1) of the Income Tax Ordinance 2001 says that individuals and companies must ensure the correct filling of details in the form. Adding the wrong information may result in penalties. Make sure to take care of the following things.

    • Attach the valid CNIC; it should not be missing, incorrect or invalid.
    • All the mandatory fields on the form, marked with * should not be empty.
    • The returns should be “signed” by the taxpayer or his Representative (defined in section 172 of the Income Tax Ordinance, 2001)
    • Tax should be filed on the prescribed form, following the definite pattern only.

his information is a general guide and not a comprehensive guide. It represents that it is the taxpayer or his representative’s responsibility to fill the accurate information and valid documents along with the form. Our consultants at Lam Alif Law are highly professional and responsible for following these guidelines.

How Can We Help You To File Income Tax In Pakistan?

Lam Alif Law is an Income tax consultant in Pakistan that provides affordable tax filing services. If your corporal affairs need extensive enlisting, the form filling seems like a hectic job with numerous sections and subsections to cover. 

Lam Alif Law offers the best income tax services in Pakistan. It only requires an upload of documents by you and our experts will prepare a draft of your Income Tax Return. Additionally, Lam Alif Law experts analyze the documents to check if there is any possibility for tax savings. We also offer to review the form for cross-checking the anomalies that need to be addressed before the final Income Tax Return submission. 

The step-to-step guide by our professionals will make your income tax filing easy and timely. All these facilities reduce the risk of inquiry into your tax affairs. These services are available at a competitive market price, but the professional commitments at Lam Alif Law are priceless.