How to Submit/Efile Income Tax Return and Wealth Statement Online With FBR for Tax Years 2015, 2016, 2017 & 2018
Income Tax Return and Wealth Statement for 2018: Changes for Non-Resident Pakistanis
The Federal Board of Revenue has uploaded the income tax return and wealth statement for tax year 2018. There is almost no change in the income tax return for tax year 2018 as compared to the tax return for tax year 2017. However, a new form has been introduced—Form under section 116A of Income Tax Ordinance 2001—which is related to the income and assets of non-resident Pakistanis. Earlier, non-resident persons were not required to file a wealth statement and it was sufficient for them to file income tax return. However, now non-resident Pakistanis have to file Form under section 116A otherwise their income tax return under section 114(1) cannot be submitted.
Important Changes Regarding Filing of Tax Return for Tax Year 2018
Another very important change is that earlier, taxpayers, even if they filed the income tax return after the due date, become the filers/active taxpayers every Monday. However, now, a person can't become a "filer" after the due date even if they file a tax return.
This means that the Active Taxpayers List, based on returns for tax year 2018, will be updated on 01.04.2019 and no further update will be made.
At present, the last date for filing of tax return is 30th September 2018. If a person does not file the return by the due date, and files a return after that date (e.g. on 01.10.2018), that taxpayer will not be an active taxpayer / filer during the whole year 2019.
If the income tax return for tax year 2018 is filed in time, however, the person will remain an active taxpayer during all of 2019.
Change in Tax Rates and Tax Slabs
The Government of Pakistan through Finance Act 2018 has raised the limit for taxable income to Rs.1,200,000. People having an income of Rs.1,200,000 have to pay income tax of just Rs.2,000 per year. This amendment is applicable to the income earned during 1.7.2018 to 30.06.2019. However, when filing an income tax return for tax year 2018, we have to follow the tax rates for 2017-2018, where the taxable limit is just Rs.400,000 only.
Tax Rates for Business Individuals and AOPs
Tax Return for Tax Year 2017 is Ready for Submission
There is not much change in the tax return for tax year 2017 compared to the return for tax year 2016. We hope that the IRIS system of FBR now works smoothly and bona fide taxpayers do not face as many problems as they faced last year. We pray that FBR this year removes the deficiencies in the return process and ensures the smooth running of its online system for filing returns.
FBR website: http://www.fbr.gov.pk/
IRIS taxpayer login: https://iris.fbr.gov.pk/infosys/public/txplogin.xhtml
Filing Income Tax Returns Online in Pakistan
This article is an humble attempt to guide the taxpayers who intend to file their income tax returns on their own without help of any tax lawyer of practitioner.
Earlier, salaried individuals were not required to submit their income tax return if their only source of income was salary and their income was below Rs.500,000. However, with effect from tax year 2013 every employee earning taxable income is required to submit his income tax return.
I think the salaried individuals who do not submit their returns make a blunder. First, they expose themselves for penal action on account of non-submission of return and secondly in majority of cases of salaried persons the tax deducted is more than their actual tax liability. In case such person submit returns they can claim the excess deduction as refund.
It is quite easy to pay income tax in Pakistan. If your income is more than Rs.33,500 per month, your employer is required to deduct taxes from your paycheck. Under section 149 of the Income Tax Ordinance of 201, your employer is also required to file a statement of all taxes they withhold. This has not always been the case.
Every salaried employee with a taxable income of Rs.400,000 is required to electronically file (e-file) an income tax return using the FBR'Sonline system known as IRIS.
In addition to an income tax return, every person who is required to file income tax return for tax year 2015 has also to file wealth statement. Wealth statement is mandatory for filing of income tax return. Without wealth statement you will not be able to submit your income tax return.
Wealth statements contain details of a person's assets and liabilities. That is to say, you have to mention in detail your properties, plots, houses, and vehicles in your name as well as the detail of movable and immovable properties that are in the name of your dependents e.g. your wife and children. Taxpayers are also required to give details of personal expenses e.g. rent of house paid, Travelling, electricity, education and other personal household expenses. Personal expenses is the part and parcel of your wealth statement.
First step to file Income Tax Return for tax years 2014 and 2015
If your income is more than Rs.400,000 and you have decided to submit the return, you first have to register with FBR. For registration with FBR you may visit the following address and state your particulars correct. You may also have to attach the following scanned documents.
1. Both sides of your Computerized National Identity Card (CNIC)
2. Copy of electricity bill of your residence
3. Copy of your pay slip or employer's certificate
4. Document of your ownership of the residence or rent deed, as the case may be.
5. Fill in and signed/thumbed NTN application form.
After attaching the documents please submit the application. After submission of NTN application you will be eligible to prepare and submit your income tax return for tax years 2014 and 2014.
Detail of Personal Expenses
Online Verification of NTN
Before applying, you may check if you have already been allotted NTN by the FBR. For this you may visit following website of FBR to know whether you have already allotted NTN by the FBR or not. After mentioning your CNIC No. if the NTN appears against your name, you need not to register with FBR. Just skip the step of registration and went on to to "E-enrollment for registered person" link.
Online Verification of National Tax No. (NTN) Federal Board of Revenue
FBR Salaried Employee Tax Return Deadline
Did you file your tax return and wealth statement on time?
Procedures for Using the FBR to Submit Income Tax Returns 2014 and 2015
In order to use the Iris portal to e-file your income tax returns for tax years 2014 and 2015, you must enroll yourself with the has to enrollment himself with the Federal Board of Revenue (FBR). Necessary steps are as under:-
After registering with the FBR, visit the portal's online registration page. A new screen will appear where you will enter your CNIC number, email address, and the verification code that will appear on the left side of the screen. Click "Submit" and the system will ask you to enter codes sent to your mobile number and email address. Enter the codes in the right columns and press "Submit." You will receive your password and pin code in your email and on your mobile phone within less than five minutes.
It is important to note that the SIM of the mobile number you enter must have been registered in your own name for at least the last month. If it is not the case, you will not receive the verification code on your mobile and will not be able to enroll.
It is also advisable to use Internet Explorer 6 or Mozilla Firefox to file your returns. Google Chrome and other browsers are not fully compatible with the FBR's new system.
Online FBR Tax Return and Wealth Statement 2016
How will you meet your tax and wealth return deadline in 2016?
Submitting Income Tax Return as Salaried Employee
In order to file your return, you may need the following documents/details:
- Annual salary certificate from your employer indicating the gross salary and tax deducted.
- Contributions to provident/gratuity/pension funds indicating ending the balance and contributions made during the year.
- Certificate from banks regarding tax deductions on banking transactions as well as profits earned on bank deposits and tax deducted/deposited against these profits.
- In case of any local or foreign trip, copy of air ticket including the amount of tax deducted.
- In case any electricity bill exceeding Rs.100, 000, copy of the same may also be required to take credit of advance income tax deducted.
- Bank statement/(s) for the period 01.07.2014 to 30.06.2015.
- 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.
- Any cash or capital dividend received and tax deducted.
- Certificates from mobile phone companies regarding deduction of tax. This applies to all the cell phones under the taxpayer's use.
- Details of any function/gathering arranged, such as a marriage, including invoices, so that credit of tax deducted may be claimed.
- Invoices issued by any educational institutions to claim credit of tax
- If you bought of sold a vehicle during the year, provide a copy of the registration book and amount paid or received.
- Documents relating to any immovable or movable property acquired or sold during the year.
- Details about motor vehicles in your name, including make, engine capacity, year of acquisition, cost, and registration number.
- Details of token tax paid for tax year 2015.
- In case of the assets acquired on a lease, provide the information and installments paid during the period 01.07.2014 to 30.06.2015.
- Details of any foreign remittances received during the year.
- Complete details of household expense including gross amount of electricity, gas, telephone, and water bills.
- Insurance premiums paid.
- Expenses related to education of children.
- Donation or zakat paid.
- Fees to join a club including details.
- If anyone contributes toward personal household expenses, provide their name, NTN, and amount contributed.
- While preparing a wealth statement, provide details about assets owned by your spouse and/or dependents.
Loan Information Required for Tax Return
Be prepared to provide details about any sort of loans you have, in the following format:
- Nature of loan.
- Total loan facility availed.
- Total installments paid during the year.
- Remaining Loan/(s) amount as on 30.06.2015.
Other Sources of Income for Salaried Employees
When filing your tax return, provide details about any other sources of income, including:
- Income from property (gross rent, tax deduction on rent [if any], property tax paid, insurance premium paid).
- Details of profits earned on bank deposits/saving certificates etc. including bank account number, nature of deposits/saving certificates, gross profit earned during the year, tax deductions made by banks or National Savings.
How to Prepare a Wealth Statement Online
Taxpayers are required to file wealth statement and to reconcile their wealth with the declared in the previous year's wealth statement. Usually, government employees are also required to file Declaration of Assets and liabilities with their respective departments. So, you can pick the figure from declaration of assets. However, reconciling the wealth is little bit tricky.
In the Wealth statement you are required to mention the complete address of your house, plot or properties etc. your bank balance as on 30.06.2015. While mentioning the value of assets please mention the cost of the asset that is borne by you to acquire the same. For example, you purchased a plot for Rs.100,000 including incidental charges of registry and payment of commission etc. and present value of the said plot is Rs.500,000. You have to mention the value of plot at Rs.100,000 and not Rs.500,000. Similarly, you purchased a vehicle for a consideration of Rs.500,000 four years back and now its market value is around Rs.300,0000. You have to mention the value of the same at Rs.500,0000 and not Rs.300,000. Regarding loans you have to mention the position of loans as on 30.06.2014 or 30.6.2015 (for tax years 2014 and 2015 respectively). Suppose you have obtained house building loan of Rs.100,000 three years back and after payment of instalments the current position of loan is Rs.65000. You have to mention your liability at Rs.65000 and not Rs.100,000.
So far as the reconiliation of wealth is concerned there is a basic technique that taxpayers should use, which can best be explained through the following example
To begin you will need these figures (followed by example amounts):
- Wealth for the year: Rs.100
- Wealth for the previous year: Rs.90
- Increase in wealth: Rs.10 (A)
Sources of Income
- Salary income: 50
- Rental income: 10
- Business income: 20
- Foreign remittances: 10
Total: 90 (B)
Now from that amount take away the total calculated from this list of figures:
- Personal expenditure: 50
- Marriage of son: 20
- Taxes paid: 10
Total expenses: 80
Difference 10 (C)
Note that A and C should be equal in all circumstances.