Archive April 2020

It is the duty of every filer to tax their files before the deadline in order to protect him from the consequences of missing the tax deadline. However, If any person failed to tax his filer before the deadline, he should file his tax as soon as possible. In case of failure of pay tax, you will have options for a tax extension, late payment, or penalties of late payment.

Note: The last date for federal tax return filing for tax year 2019 is July 15, 2020

Filing for an Extension:

In case of missing tax deadline, you can go for a file for an extension if you want to get yourself protected from penalties. You will have to pay a 5% amount each month after missing the deadline. However, if IRS is paying you the refund, then there is no need to ask for tax extension but if you are not getting a refund then there is a need to filing a tax extension. Moreover, if you are getting refind from IRS for 3 to 4 taxpayers every month in a year then there will be no penalty for missing the deadline.

If the balance is pending:

In case if you have paid your tax before the deadline but you still have a pending amount due then every month, you will have to pay the penalty of 0.5% of the total amount per month and it will be a maximum of 25% payment of late payment. You can also end up likely to owe interest to the remaining amount.

If you are not given with extension, then you will have to pay a penalty of 5% of the pending amount per month with interest as well.

Extension of time for tax payment:

You also have an option to apply for an extension of time in order to pay your tax after the deadline but you will have to meet the legal requirements as well in order to get a time extension. You can apply for a time extension here: Application form for Extension of Time for Tax Payment.

If you want to pay your income tax, visit ‘How to pay income tax‘.

What is DIRBS:

Mobile Device Regularization – DIRBS stands for Device Identification, Registration, and Blocking System used to identify the non-complaint devices. A strong inflow of mobile phones and their import is in demand in the country. However, leaving noteworthy issues with the grey market and counterfeit devices affecting Government, Distributors, MobileNetwork Operators, and Consumers.

How It Works:

The system uses the International Mobile Equipment Identity (IMEI) a 15-digit number that is used for identification of the device. It reveals the device make model and details of type approval, manufacturer, and country of production.

Any person who buys a new smartphone in Pakistan needs to check the phone’s compliance with PTA at the time of purchase. You can check the validity by sending the phone’s IMEI to 8484 by text message or you can check it online at the PTA website. Android users can also check it through by downloading DIRBS android mobile app from the Play Store.

Also Check: How to Pay Income Tax

Advantages Of DIRBS:

DIRBS System helps to identify the illegal devices and the devices which are imported. The copies of the original equipment from official OEMs, Devices whose import tax has not been paid, the devices with invalid IMEIs which are not assigned by GSMA, multiple devices with the same IMEI, the devices that have been reported within Pakistan and globally to GSMA  as stolen or lost these types of devices are considered as illegal or invalid devices using the DIRBS.

Objectives Of DIRBS:

DRIBS  System is used for Identification and approval of Devices in which the device with SIM functionality must contain a unique and valid IMEI, new devices with unverified DIRBS, IMEI / false identifiers will not be registered by the Mobile Network Operators (MNOs) on their networks, the retailers and users will identify the validity of IMEI and only the PTA approved devices will be imported into the country and handling of stolen devices in which the introduction of the mechanism by PTA  through which OEMs and operators will be able to notify the PTA of any business being identified by stolen devices, once notified, MNOs will block stolen devices and mobile network operators (MNOs) will notify the PTA of any device connected to their network if reported as stolen are the main focus.

Awareness Through DIRBS:

              DIRBS system is a very informative awareness for consumers and retailers to check compliance. The system is also beneficial for both the retailers and customers in a way they can check the devices is it proper in warranty in PTA or approved by PTA while purchasing new devices.

If you are a filer or taxpayer and want to pay income tax, you can pay it either online or manually. Please see the payment methods:

Factors of Income Tax Calculation:

Calculating income tax depends on various factors that contain your status whether you are an individual, a company, a firm or a local authority, The amount of your income and its nature, and your age.

Heads of Income:

According to Income Tax Ordinance, 2001, taxable income is divided into five categories:

Salary

Business

Capital Gains

Income from Property

Income from Other Sources

Benefits of Paying Income Tax:

Paying your tax returns and wealth statements is good for your government as well as for you to get filer benefits to enjoy a minimum withholding tax on all of your services at excise offices, airports, banking transactions, in purchasing new cars and for real-estate matters. Earlier, the FBR had separate portals for companies and individuals. But now, they’ve made it easier for everyone.

Online Tax Payment

Steps for FBR E-Enrollment:
Here are the ways for FBR E-Enrollment to start paying your income tax: 

• Get yourself register with FBR and start paying your tax returns online.
• For unregistered person go to FBR IRIS portal provide all relevant information by clicking on the registration tab
• For different options again open the IRIS portal and click on e-enrollment.
• To complete the registration process, enter all the asked details like your mobile number, CNIC, etc.
• Login into your account and fill the form by entering all your income information.
• Now you are a Tax Filer.
• In order to check that you are on active taxpayer list or not type ATL give space then enter 13-digit CNIC number and send SMS it to 9966.
  

Guidelines to Pay Income Tax:

Once, you become tax filer you need to pay your income tax by following these steps:

• First of all, log into e-file
• Click on the e-Payments tab.
• Then, go to Create Payment, select Income Tax Annual Return option.

Creating Payment Slip:

• Selection of related tax year
• Entering the Tax amount due
• Selecting a payment mode
• Clicking on create a button and confirm the e-payment created.
• Select the nearest city branch of State Bank (SBP)or National Bank (NBP) for payment slip deposit. (you can download the PSID by printing it)
• After the payment of due tax, the COMPUTERIZED PAYMENT RECEIPT (CPR)is generated. It is reflected in Iris within 24 hours of payment being submitted
  

Manually Tax Payment:

If you can’t go online and pay taxes then you can manually submit your statements on paper at the Taxpayer Facility Counters of the relevant regional tax office.

However, if you want to pay your income tax but you are not a filer, then check the relevant blog ‘How to become filer‘.

Late Tax Payment Penalty:

Failure to pay your taxes is punishable by a fine or a penalty of one year or two in prison.

Other than apply for NTN manually, you can apply for NTN number online through the FBR official website by following steps given below:

Online Procedure:

Step 1: First of all, you need to go to the website: https://e.fbr.gov.pk in order to apply for your NTN number.

Step 2: Here you will see the ‘e-Registration’ tab. All you need to do is select a new e-registration in order to start with a new application.

Step 3: In this step, you need to select the type of application according to your requirements.

Step 4: After that, select the taxpayer type (Individual, AOP, or Company).

Step 5: Here you will have to Enter the CNIC / Reg. Inc according to the type of selected taxpayer, Name and image character then click Ok in order to continue the process.

Step 6: Now you will see the already selected category on the next screen.

Step 7: Once completing the online registration form, verify it and submit that application if you want to apply online. To process from TFC, you need to submit the application at the TFC counter along with your all required documents.

Step8: A Token number will be assigned to that application for further processing/ approval/inquiry. After login, go to the Registration=> Enrollment=> Change profile and update the information accordingly. Moreover, if you want to apply for NTN number manually other than applying for NTN number online, follow the steps:

Manual Procedure:

Step 1: Download the taxpayer registration form by clicking here.

Step 2: After filling the form, submit it to concern NTN Cell/RTO.

Recommended Blogs:
How to become Filer
Check NTN number

Many Pakistani National living in foreign countries may have a question arising in their mind that how overseas Pakistanis can become filer. You can find your answer here:

Do Overseas Pakistanis Have to File Taxes?

Yes, overseas Pakistanis can become filer and every foreign Pakistani has to pay their taxes based on their income in Pakistan. Like many other countries, taxation in Pakistan depends on the individual’s resident status other than the foreign country in which he/she resides. Previously, if someone was held for 183 days (or more) during the tax year, it was assumed that the tax resident would end July 1 to June 30. However, this period has been reduced to four months following the 2019 financial law. This means that for the year 2019-20, a person must remain in a foreign country for at least eight months to claim tax-free status. In addition, Pakistan residents should be aware that their income is taxed. Meanwhile, after filing tax returns for foreign Pakistanis, it is necessary to file an income tax return on income from Pakistan. Non-resident Pakistanis are not obligated to file a declaration of wealth. Foreign Pakistanis file tax returns if the Pakistan-based income is below the legal income tax threshold or in any case. If they need a valid CNIC, they file tax returns to trigger the filer benefits.

How Can Overseas Pakistanis File Tax Returns in Pakistan?

First of all, foreign Pakistanis must get NTN (National Tax Number) and it can be obtained by registering on FBR’s online portal.

You should first check the FBR filer status.

How to Check Your FBR Filer Status and NTN?

You can check the taxpayer status and the NTN using the following two methods:

1. Type ATL [space] CNIC in a message and send this message to 9966. Please note that do not add any dash, any character or extra space between the numbers because it will not be sent. In a few minutes, you will receive a text message of your taxpayer status. For this purpose, you will need a Pakistani SIM card.
2. Visit the official FBR website and go for search taxpayers in the navigation panel that shows up on the website. At the top-down menu, select Active Taxpayer (IT). Then you will be asked to type your CNIC and the verification code received in the text message. After entering the CNIC and the verification code, click on Verify and you will immediately know whether your name exists in the ATL (Active Taxpayer List) or not.

If your name is available on ATL but you don’t know the NTN number, click on the online NTN / STRN Inquiry link and get your NTN number. Meanwhile, if anyone has an NTN and no Iris login credentials, log in details can be obtained by clicking on the ‘E-Enrolment for Registered Person’.

Registration for NTN

Foreign Pakistanis, who have not filed their taxes before, are required to register themself on FBR by visiting FBR and click on the registration number. They should fill in the required details to enter the iris system.

The person who is applying for NTN should verify himself with the code sent via mobile phone or email. The person is required to verify himself as soon as possible as verification code works for a few minutes after sent to you.

After completing the ‘Registration Form’, submit it to get your NTN number.

For more information, check out our comprehensive blog ‘How to become Filer’.

Filing Tax Return for Overseas Pakistanis

First of all, log in to IRIS and then click the ‘Declaration’ menu available above. Follow the procedure described and be sure while stating your income from foreign sources in the ‘Other Sources’ section of the website.

Moreover, depending upon the months you spent in Pakistan during the financial year. Depending, choose your status as ‘resident’ or ‘non-resident’ in the ‘Active’ section and enter the required information in the input field.