The Federal Board of Revenue (FBR) has proposed relief for individuals who file their income tax returns after the due date. Under the draft amendments to the Income Tax Rules, 2002, eligible late filers may be included in the Active Taxpayers List (ATL) without paying the prescribed surcharge, subject to specific conditions.
The proposal aims to encourage tax return filing while placing restrictions on certain property transactions during the relief period.
Key Features of the Proposed ATL Relief
1. ATL Inclusion Without Surcharge
Under the proposed amendment to Rule 81B, individuals filing their latest tax year income tax returns after the applicable deadline may qualify for ATL inclusion without paying the late-filing surcharge.
2. Six-Month Undertaking
Eligible individuals would need to submit an undertaking electronically through the FBR’s IRIS portal using the proposed Form ATL-U.
The undertaking would cover a six-month period, starting from the date of the electronic acknowledgement issued after successful submission.
3. Restrictions on Property Acquisition
During the six-month undertaking period, taxpayers would be required not to purchase, acquire or otherwise obtain ownership or a beneficial interest in property.
The FBR may verify compliance using information available from relevant government authorities, registries, financial institutions and other lawful sources.
4. Consequences of Non-Compliance
If the FBR determines that a taxpayer has breached the undertaking, the proposed relief may be withdrawn from the date of the breach. Subsequent ATL inclusion would then be governed by the applicable rules.
What Should Late Tax Filers Do?
Individuals who have not filed their income tax returns should review their filing obligations and assess their eligibility before relying on the proposed relief. Taxpayers should also understand the property-related restrictions and confirm the current legal status of the draft rules before submitting an undertaking.
How Xact Legal Can Help
Xact Legal assists individuals and businesses with income tax return filing, ATL-related matters, tax compliance and guidance on applicable tax regulations in Pakistan.
Contact Xact Legal for professional assistance with tax return filing and understanding FBR requirements.