How to File Revised Income Tax/Wealth statement & Sales Tax Returns in Pakistan

How to file Income Tax & Sales Tax Returns

Earlier, it was quite difficult job to revise income tax return. For this, you have had to get approval from the Commissioner, in case you detected any mistake or omission of return. However, as per the amendments made through Finance Act 2015 in the Income Tax Ordinance 2001 now a person can revise his income tax return within the period of sixty days without the approval of the Commissioner Inland revenue in case he finds any sort of omission, mistake etc.This law is applicable with effect from 01.07.2015.

However, after the lapse of this period of two months/60 days, if a taxpayer intends to revise income tax return where there is a short payment he has to pay 25% of the penalty and default surcharge in case the application for revision is filed before issuance of a show cause notice.

Through this amendment, hardship is created for the genuine cases where there is no intentional default or tax short payment. Before this amendment, revising the income tax return was very simple. If a taxpayer has filed income tax return online, he was required to just make a request online and within five minutes you were allowed to revise the return. If you had filed the income manually and you had found an omission or mistake just file the revised return on the prescribed format and your return will be accepted under Universal Self Assessment Scheme in terms of section 122(3) of the Income Tax Ordinance 2001.

Similarly, the wealth statement could also be revised without the permission of the Commissioner within the period of two months/sixty days from the date of filing of original return. However, after the lapse of this period, permission from the Commissioner Inland Revenue is mandatory. Such an amendment regarding taking approval from the Commissioner is encouraging the culture of red tap and corruption in FBR.

However, irrespective income tax affairs, it is quite difficult to revise the sales tax returns. Prior to 01.07.2011 it was very simple to revise sales tax return which was allowable in case your tax liability is increased by filing the revised return. However, this facility has been removed.

Now, you have to file online request for revising the return. In the revision request you have to submit the reason for revision. It is very common practice that mostly registered persons thought it is enough to file application for revision of return, which is not correct.

The next step for revision of return is to file manual application for revision of return to the concerned Commissioner as the Commissioner is the competent authority. For this purpose you have to provide him complete supply register, purchase register and invoices. In other words, you have to submit the details for audit purpose. After furnishing the said details it is discretion of the Commissioner Inland Revenue to allow or reject your application for revisiion of sales tax return.

It is also worth mentioning that people are facing hardships in revision of return as hundreds of thousands of revision requests are pending with the Commissioners and there is a shortage of supporting staff to dispose of such requests. Moreover, the basic theme of the reforms in the Federal Board of Revenue was to reduce the contact/inter-action between the registered persons and the Department personnel. This helped a lot to eliminate corruption in the Department. However, now for revision of return the registered persons have to contact the concerned personnel, which is against the basic theme of reforms in the Federal Board of Revenue as audit does not mean just audit but you also have to satisfy the concerned staff. It is also important to mention here that now the sales tax return are filed online and it is very easy to detect any wrong practice on the part of the registered persons.

In view of above, it is the demand of the day that procedure for filing of revised return should be made as easy. Similar amendments as made in the income tax law are needed in the sales tax act. When in the case of income tax affairs the returns are allowed to be revised very easily for the whole year, why this facility may not be made available to the sales tax registered persons.

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