Filing of Income Tax Return (ITR)

Filing of Income Tax Return (ITR)

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00:00
the broadcast is now starting all attendees are in listen-only mode hello assalamualaikum and welcome to all of you in today's session this is the second in the series of CPD's the 2020 CPD series that acc has launched to ensure that our members during the these testing times can convert their spare time into a blessing I would like to
00:30
welcome you all on behalf of ACCA today and it's great that you were able to spare your time and hopefully we'll be able to add value to your knowledge base and you'll gu richer from here today first of all before I continue can you just quickly by way of your messages let me know if you can hear me clearly just a few people you can just die PSF you can hear me clearly okay yes yes yes yes okay that's perfect
01:19
so everyone can hear us clearly okay before I continue we have received the question already I'll be answering the questions in between and this one is actually related to the last session Ally Heather I'll be talking that with our assistants for today nizam who is with us but let's formally start the session first so house below min ash-shaytani r-rajim bismillahi rahmani raheem rubbish rally sediba yes silly I'm Reba
01:53
luke the demille asani of guru Kohli Ola opened my heart and he's my task for me and removed the impediments from my speech so that they may understand what I say today's session is on one of the most important topics for any text professionals or not just any text professional being in the public practice but any professional dealing in taxation that is the filing of income tax return and we will view and the common issues that we face so let's
02:25
start today's session first of all I'll just quickly introduce myself for those who are attending a session of mine for the first time I'm basically a CCA's MNP chair as well as the chair of a CCS Taxation Committee I'm honored to be representing Pakistan on the global tax forum I'm also honored to be contributing on several other platforms one of the key ones being part of the editorial board of a CCS Meza region publication professional insights
03:02
I'm a fellow Chartered Certified accountant I'm also cfh otto hölder I also will see a VIP CPF a anti money laundering fraud risk management specialization etc etc with regard to professional experience I have a fund of 17 years plus experience gained in top management positions working both in leading British as well as Pakistani companies currently I'm serving as a managing partner at ml/cc that millennium law and corporate
03:34
company which is the pioneer ACCC an illegal practicing firm in Pakistan in addition to that I'm also sitting on the board of several corporate entities and think tanks with regard to trainings I'm an experienced trainer having delivered professional trainings in corporate public and academia sectors my portfolio including having conducting conducted mandatory promotional trainings of Carlmont officers at mpdd professional trainings at the likes of National Bank
04:04
of Pakistan HPL MCB PPC BL Balu key powerplant IB P in collaboration with State Bank Lahore Karachi take Pakistan takes Bar Association law or Karachi Chambers of Commerce and Industry barrier university uet and are very on alma mater KC CA for those of you who do like to read I like I'm a Don just like I'm actually a regular contributor to various national and international publications like daily
04:36
nation Daily Times Pakistan Today Express Tribune blue-chip Journal I'm honored to have received ACC as exceptional public value and national advocacy Awards I'm a life member twice serving chairman Finance and Economic Affairs lies in committee and four times chairman lies in Committee of the heart X Bar Association I also am the youngest ever director of the board of hunger tinker's forum the our director at the
05:06
Miller thinkers forum and professionally associated with various global organizations this is a slide representing some of our key existing clients and associations off our farm all the way from top names in various sectors to our own alma mater that you can see I'll just skip through the next few slides as you'll be having a copy of this presentation and can search me online queue and can access our firm's website too but yeah one thing which is
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an honor for us being a CCA member is that our firm being the pioneer ACC practising firm in Pakistan was actually profiled and a detailed report was published by ACC the link to that is available here you'll be having that in your presentation too so you can go through that and hopefully that this would serve as an inspiration for you to also come in the field of practice a professional acknowledgement that several legislation and other records of the FBR and are on firm ml/cc i would
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just like to point look we cannot see your screen you need to share your screen as well okay perfect okay guys you can see the screen now you okay great so so yeah this is the link of the a CCS report on the firm that I was referring to you'll be having that in the presentation and I was just going to the professional acknowledgement that several legislation and other reports
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importantly of FBR Federal Board of Revenue and our own from ml/cc millennium law and corporate company on this subject have been utilized in the development of this presentation and as usual due to limited time and the extensive volume of the topic that we are covering while we have strived to cover the maximum possible content within the available time the content coverage as you can imagine had to be prioritized and managed in order to suit the requirements and constraints of
07:18
today's session but we'll try to cover all the important points so you have nothing to worry about so first of all before going into the thick of things some vital concepts relating to ITR income tax return direct versus indirect tax so if you want to categorize taxation into two broad categories you can categorize them as either direct taxes or indirect taxes I would like to take your feedback would
07:51
any of the attendees like to share what do you think are direct or indirect taxes and I'll give you about 40 seconds to write your answers or while they are writing the answers nizam one Curie that's been received repeatedly on my social media and today too is that members are asking when can they expect to receive the CPD email for the last session you
08:27
so a brief email on only past webinars conducted or being sent out quarterly uh by the head of member of fears so they'll be receiving the links resources and everything in that very mail no I think they are referring to the email that we mentioned where they'll receive their CPD attendance certificate and the link is that also being sent on
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classes now now that would be sent by the head of member of face okay so hopefully you'll be receiving that soon there was some family a medical emergency with him but I'll speak with him and we'll update you on the frequency and the expected date soon inshallah okay guys so anyone nobody knows what direct or indirect taxation
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are now we've got quite a few responses so who's is saying direct exes are paid directly to the government okay Mohamed saw me direct exes are paid by individual himself on their income or salon directx where texts have been submitted directed to the regulatory authority session Majeed all taxes which are withheld at source are called dialect X's rest are indirect okay direct X's are this is so heaps a jaw
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direct taxes are applied directly on the income okay we have we saw receive so many responses that's wonderful I can't possibly read each and every one and respond to you but well done most of the responses have been correct a few have mists or confused a bit of the concepts but that's fine I'll explain that for you so direct taxes as the term implies are Texas which are levied directly on
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one's income so for example the tax income tax is directx if you are a salaried individual this text is deducted directly from the income similarly if we are a business person and our business is making profits the text that we pay on the net profit is a Direct X these taxes can be collected in a very in a in several
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different forms they can be withheld at source and one can be asked to pay them at a certain point of time after the computation of the profits our tech system in Pakistan is actually a bit unique in this that we do have a kind of a situation due to the nature of the undocumented economy where we have used tools normally reserved for indirect taxes to collect the direct taxes which oftentimes create confusion for some of
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the new entrants in the field anyway indirect taxes are taxes that are levied on these services or provisions of the goods on the supply chain and not the income itself so for example the sales tax is a prime example of indirect tax in Pakistan so income tax and sales tax are the prime examples of the direct or indirect taxes withholding somebody I did mention about withholding while answering my Kure about direct and
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indirect taxes withholding comes from the word withheld and basically the concept is this that for certain taxes and they include both direct and indirect taxes the pair the person who is making the payment is required to withhold either full or a person of the applicable tax and deposit that to the government so basically that person becomes a withholding agent the one who is making the payment in this scenario
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there are certain requirements they are not a topic of discussion today but what's important is that you have this concept or understanding so that when we'll be discussing the income tax return you would know what we are talking about so it's kind of a thankless job per se that a person a business individual is basically deputing their own resources for doing the regulator's work the text man's work depositing the money to the government then has to actually go through the with whole joint with the
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holding agents checks and balances and the audits too but that's the law of the land that's how things work so income tax return is required to be filed normally annually there are a few exceptions to that net income all of you are qualified accountants ACCA members otherwise very well aware so I don't think I need to explain net income the frequency for filing these income tax
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return is normally annually statutory format to report state of affairs and performance is how you can describe an income tax return and basically an income tax return is based on the fundamental accounting concepts of an alum statement and balance sheet which you have studied and mastered during your studies however the format is in a statutory way it's as per the requirement of the government it's in line with the taxation laws which you'll
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see in a moment but the fundamental concepts are those of the accounting concepts that you have studied so basically there is an amalgamation of the knowledge of taxation that you have acquired and your accounting knowledge you being accounting professionals are already standing at a place of advantage compared to anybody else from any other field because your accounting concepts are very well all you need to do is master the local taxation laws and you'll be in a fine space to handle all
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these income tax returns so let's move forward now before we go on to actually filing the income tax returned there are two key components that we need to have a look at the first one having two parts is who is actually exempt and who is required to file the income tax return so the exempt persons are basically any widow and orphan below the age of 25
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years of age a disabled person or in the case of ownership of immovable property a non-resident person so who is required to file a simple way is to simply say everyone else but let's actually have the look of the relevant section of the income tax ordinance section 1 1 4 which outlines in detail the persons who are required to file the income tax return so it says that subject to this
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ordinance the income tax ordinance 2001 the following persons are required to financial return of income for a text year namely every company every person other than a company whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this ordinance for the year this is the legal linguist a things so basically what this clause is saying 1 1 4 2 a B it's basically saying that a 1 1
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4 2 sorry it's basically saying that every person other than a company's taxable limit is above the BTL below taxable limit income they'll be required to file the income tax return then the fourth sub Clause is saying the third sub Clause wall basically omitted so the fourth one now says any nonprofit organization as defined in clause 36 of section 2 ah so you can't really say that if you are in the nonprofit sector
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you don't need to file your income tax return one would still be required to file the income tax return as you can see any welfare institution approved under clause 58 or part 1 of the Second Schedule would also be required to file their income tax return and similarly any person not covered by clause 8a a b AC or ad who has been charged to text in respect of any of the two preceding taxes so if you were not covered otherwise but you were charged to text
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any of the two preceding tax years you would still need to file your income tax return and similarly if you claim to carry a loss forward under this ordinance for ataxia you would need to file your income tax return if you own immovable property with a land area of five hundred square yards or more or on any flat located in areas falling within the municipal limits existing immediately before the commencement of local government laws in the provinces or areas in cantonment or the Islamabad
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Capital Territory you would still be required to file the income tax return if you own a moveable property with the land area 500 square yards or more located in a rating area on a flat now just have a look there is a difference between the areas of flat or other a movable property there is a cultural difference between some of our cities so for example in Karachi there is a trend of flats it's much more common in Karachi it's very rare in Lahore and in major cities of Punjab so anyway all
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these different different types of a moveable properties are covered within the taxation laws so if somebody owns a flat having a covered area of 200,000 square feet or more located in a rating area they need to file the income tax return and last but not the least if you own a motor vehicle having engine capacity above 1000 CC you would need to file the income tax return similarly as I've often discussed and told in my various sessions if somebody has
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obtained a national text number dyan tiyan number and you go out of the business you have stopped doing business you need to go through the proper process in Form D register you can't just stop filing the tax returns if you have obtained an Tien you need to file your tax return if one is the holder of a commercial or industrial connection of electricity where the amount of annual bill exceeds 500,000 this limit has been revised then you'd need to file the
19:26
income tax return similarly a resident person registered with any chamber of commerce and industry or any trade or business association any market committee or pay attention any professional body including Pakistan engineering Council Pakistan Medical and Dental Council Bob Council or any provincial bar Institute of cost and management accountants chartered accountants every resident person being an individual required to file foreign
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income and asset statement under Section 1 1 6 a would also need to file their income tax return and every individual whose income under the head income from business exceeds 300,000 but does not exceed 400 thousand in ataxia is also required to furnish return off income from that tax year so as you can see as I've often shared that in law they device the law in a way so that all the major areas are covered so you can see
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from this list that this is pretty exhaustive and practically anybody who is not within the exempt category would need to file their income tax return this brings us to the next topic which is the concept of filer previously the things were somewhat simpler to say there was a concept or that you were either a filer or you were not a filer not anymore the concept has somewhat been amended in the last Finance Act so
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now the concept is that one is either a filer or not on the ATL non filer per se has been removed so what is a filer a filer is any individual whose name any individual individual is defined as any taxpayer falling in any of the category that can be a business that can be a opiate cetera so we are referring to individual in that sense not in the sense of a single person just to be on just to be clear to everyone so a filer is someone our tax payer whose name a
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text file ur is someone whose name is on active taxpayer list what is the active taxpayer list that is a list released by FB our previously it used to be updated and released on a pre weekly basis there was a change in the regime which I'll refer to in a bit but that list is now released by FPR on the 1st of March of every year and then this list is continuously upgraded so what is
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a filer anybody whose name is on a TL and someone whose name is not on a TL technically technically that person would not be a filer but we don't call that person non filer anymore we just refer to it professionally as not being on the active taxpayer list there's an interesting concept that you should understand the file list basically works a year in the past so for example at present its 1st of april 2020 this falls
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within the text year 2020 that would be ending on June 30th of June 2020 now the active taxpayer list was released on 1st of March and that basically covers dexia 2019 and the next list would be issued on 1st March so if somebody wanted to come on the active taxpayer list for the duration of this year this checks here until the next ATL is
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released that person would actually need to file their previous year's tax return - so they'll need to file their tax return for the tax year 2019 and then they'll also definitely need to file that return for tax year 2020 however if they just file their tax return for tax year 2020 which is ongoing they tl4 that hasn't been released so they would not be on a deal and they would not be filed so that's something very important to remember a very fine point but important
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one and ATL is still upgraded on weekly basis so there is a continuous ongoing up gradation but now a change that was introduced the year before the last one has been continued there is a penalty so the people who haven't filed their tax return within the due times after all the extensions and still want to come on the active taxpayer list they can but now they need to pay some fines what do you think is it a good idea to pay the fines just
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some quick comments before I continue I saw my saying no Hasan is saying no Oh Bashar is saying no why guys why no yes no yes no yes no yes yes yes yes yes definitely government extended it for a long time no it's a good option if the benefit of the cost okay so we have a divergence of opinion amongst our members however likely people are saying it's a good thing so that people will start getting in the habit of filing their taxes again on a timely basis
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anyway keeping aside the discussion whether you think as a professional this is a good thing or the bad thing the fact of the matter is that's the law of the land and it has to be followed so if somebody still wants to go on ATL they can even after the atl has been released after did you date but they'll need to pay a fine depending on their structure whether they an into it they are an individual AOP or a company by the way it's as low as 1000 rupees only so an
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active tax peerless formal definition is also given it means the list instituted by the board under Section 181 a and includes such list issued by the Azad Jammu and Kashmir central board of revenue or gilgit-baltistan Council Board of Revenue and this was actually an important change with regard to harmonization because previously the atl of FBAR was different and then people who were filers from Azad Jammu and
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Kashmir and gilgit-baltistan were not being able to come on to that and it was creating a lot of difficulties for business especially those that were working on trance provincial basis so this was a good initiative taken to address that issue so what are the benefits why we even talking about filing the tax return so what if we don't file well first of all it's a national responsibility so being a responsible citizen a professional
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another even otherwise just being a citizen of the country it is our responsibility and obligation to actually file our returns and pay our do Texas but even if you think materially for other benefits from a business perspective there are material benefits number one which is written at the end peace of mind if you are filing your returns you can avoid the fines the penalties even in worst cases the prosecution so you'll have peace of mind
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number two you would be paying lower tax rates as much as a hundred percent less on certain transactions like profit on that advance income tax on property transactions capital gains dividends etc if you are a filer which mean if your name is on the active taxpayer list similarly no text deduction on certain transaction like cash withdrawals from bank for filers and then any withholding taxes that are deducted most of them
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almost all of them are adjustable for a filer whereas for a non filer those taxes are not only deducted they are deducted at almost double the rate and they are non adjustable so they are paying higher taxes and it's practically going down the drain so doesn't make much sense why would you not want to do that obviously we can argue that the system needs certain changes structural changes need to be made etcetera but if
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you just look at it from a standstill point of view the benefits far outweigh any reason for not coming on the filer list so before we go on to the actual thick of the things the practical demonstration and the common issues now is a good time to take your questions I believe some questions have been written before and rest you can write right now while nizam would be helping me to
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answer that so Nizam can you please scroll up and start asking from the first question that we received I thought asked whether the exam person will be considered as fire or non-final for banking transaction unfortunately they would be considered non filer if they are not a non active taxpayer list the only exception to that is what I covered in the last CPD session for the
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second amendment tax law Second Amendment Ordinance which is focused on foreign investors they are the only one that are being given an exception but this is still in discussion and like all the professionals all the reputable professionals your body ACC and your Taxation Committee has recommended the government to create a mechanism for these people to bring them within the filer spectrum especially when they are not required to file the tax return hope
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that answers the question next one you devious asking which is the a limit of maximum amount under Section double 1/4 to a B who is asking that something okay Sandeep a good question basically what Sandeep has asked is that what is the maximum amount under 1 1 for a B right one for to a bee yeah okay so he is
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basically asking what is the BTL limit below taxable limit Sandeep that's 400,000 next one motion degrom is came widely known for the term has been changed were there any legal implications associated abate and there were legal implications associated however it hasn't made much difference in practical terms in terms of the benefits and the cost so it's only that
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the term non filer doesn't exist it simply mean you are not a filer you are not on a TL but you'll still be paying twice the tax rates you would still happy with holding non-adjustable you would still be liable to in worst cases prosecution so not much difference in practical terms there hope that answers the question next one bobber is asking will to create WH T deducted on mobile we paid load ba but that's a good question but please
31:26
hold your horses we'll be covering that in the practical demo next one what is the D registration process for sold property relationship omer max with omer that's a good question it's not within today's purview but it's such a good and vital question i will briefly address that but when you want to deregister if sole proprietorship has stopped doing the business you need to first of all see all your filings are in order
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you have no liability with FPR or any other government regulatory body and then you need to file an application to your relevant RTO intimating them that you have stopped doing the business and requesting them for t registering it's a cumbersome process many consultants are not even unfortunately they are not even aware that it exists the processes then the application goes through a process where visits would be made to your place of business and Quietus would be made it's quite cumbersome you'll have to
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keep on visiting them representing them reminders if everything goes fine then eventually they would allow you to do that but you will actually need to go through this entire process hope that answers the question next one what if a person has not filed the IRT for the tax year 1920 after filing returned can he or she be in active tax lists after filing in April aheh Russia Zara that's a good question but you had
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a typo it's not ard it's ITR income tax return so Zara if a person wants to file the income tax return now for texia 2019 because the ATL as I told you goes one year in pendency so at the moment while we are in taxi at 2020 the ATL that is currently running is off text here 2019 so you need to file first of all your tax return for 2019 obviously for 2022 and then you need to pay the penalty for
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being the lead filer once you pay that penalty your name would appear on the active taxpayer list so the good news is you can still come on the ATL but we need to start changing our national habits because the discussion is that ultimately D regulators and the government ought to do away with this leniency and ultimately they plan that once the tax base is sufficiently extended they will withdraw this facility and people will miss the
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deadline would then not appear on a TL but as of right now there is flexibility available hope that answers next one when someone inherits piece of land what could be the treatment will Eve Emmett okay Willie then everyone let's do a thing I love to answer your questions you know that but we have a limited time we have to do two and a half hour sessions everyday in these series so we have to focus on the topic in hand but
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we can do one thing at the end of the session in the final Q&A session if we have time left I'll answer your question or you can send me a message on LinkedIn I will be sharing my personal contact details with you and I'll answer your question and third one you can send a suggestion to member affairs or even directly me I'll forward it to member of SS chairman M and P and Taxation Committee suggesting the topics you think should be covered so in the interest of everyone I think it would be
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fair if we focus on the topic otherwise we might not be able to cover the topic fully and that would not be fair to all the other participants hope you understand but I'll try to answer these questions advance questions or questions that are not directly relevant to the topic if we get some time at the end of the session next one what are the implications of income tax for non-resident Pakistani and what is the procedure for it should we need to
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submit wealth statement or m/c say it's a good question it would basically depend on your individual circumstances whether you have a Pakistan source income or not whether you have any property or bank account in Pakistan or not and whether you have any property abroad so they are quite a few questions you need to answer and your answer would depend actually on your exact circumstances so it should be a direct message on LinkedIn and I'll be happy to address that next one what is the time
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requirements for individuals to retain records relating to their personal returns secondary shiok five years at least next one what is the purpose of withholding tax and how are withholding agent deals with it genetic poll the purpose of the withholding tax is to ensure that the text is collected in a non documented economy at source while the payment has been made and the second question unfortunately is outside the purview of
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today's topic but you can ask me that either on LinkedIn or in the final Q&A session today we have some time left next one would we be liable to pay tax on our assets while filing income tax return for first time as one of the few countries Sadiq while let me just tell you it's a good question Sadiq Pakistan is one of the few countries in the world which does not have a wealth tax the well techs in
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Pakistan was abolished almost a decade ago so unlike UK and many other countries we don't have those taxes on assets next one what if someone skipped to enter details of bank account Khalid mama Khalid well it would depend what they have skipped just entering the bank account or totally not mentioning it there would be implication depending on the gravity so them more serious the
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offense the most serious would be the implications next one a weather text will be detected on deceased account barbara lee you can't run away from the text man if a defaulter is deceased by law texas to be deducted from their estate before it is transferred on to those who are about to inherit it those people who are exempt when their
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name is shown in ATL if not how will they appear in all ranking sister Salma what do you think how someone could help a country who is only a tax filer but not within taxable income threshold just like a salaried person who asked this cause amath because it's a very very good question a very intelligent question you know what even if you are not earning an amount where you'll be paying any taxes or serious taxes by being just a filer you are helping
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document the economy then you are coming within the tax embed and documenting the economy what is happening is the people who are dealing with you there is an indirect check on them - and they might actually be liable to pay more taxes so even if you are not liable to pay taxes by just filing the return by way of documenting the economy and providing the regulated a mechanism to check the counterparties to you you are helping the country and the economy next in Islam you can ask the next question
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the Texas depicts rates on rental income is very high and adjustments not allowed for individual kushma a piece advice how can we do tax planning in this area of the room abdul raheem that's a brilliant question but unfortunately it's both a lengthy question and outside the scope of today's session so again try it in the last Q&A if we have time left allah address that otherwise send me a message on linkedin next one
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you you okay I'll read couple of question while we get Nizam back tari Han has asked a very good question he said exempt from filing income tax return but it also mean that these people are exempt from tax altogether meaning no Department can withhold any income tax from to that person no thorak it does not mean that it simply means that you are not required to file your income tax return you can still choose to file your income tax return the withholding taxes would
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still be applicable unless you fall within the exempt category by way of one of these specific laws okay what are the implementations of income tax for non rizal ready been answered then we have Sandeep Kumar Raj pal what is the limit of okay that has been answered and read heed honey fast being a member of ACCA
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which is a professional body are we also required to file income tax return yes you would be as per the law a mead Emma Daanish whether gilgit-baltistan council Board of Revenue is issuing a TL that is now being marched the names are included within fpr's atl garnished so that's a good question then we have a lot of comments and then yes definitely is government okay I'm
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just scrolling through your comments right now just give me a second okay some very interesting comments the penalty is very low so should have a late wait for another amnesty scheme or kashaf week are you so certain because the times seems to be changing but you never know the deadlines previously were meaningless okay okay okay they are numerous person who are filing
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income tax return however if a person filed a return they should be filer I'm not sure Hasan you made a comment or ask a question but that sounds about right if that was a comment car scree so we have a question now back to them can you make clear how withholding Texas adjustable Shaquille Muhammad should yield an income tax return is filed any withholding taxes are adjusted in that we'll be seeing that in a moment while
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we will be filing the income tax return anomalous if a person obtained dainty and long time back is and is not a resident of Pakistan anymore it's that person liable to file the return none of the answer is both yes and no the person if they don't have any Pakistan so Center methods bank account etc and they update their current status to FBR they can even request them to deregister them then they would not need to file that
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however if they don't do that until the whole TN TN they would be required to file their income tax return okay so next one is Muhammad Hassan Khan the note state lower tax rate as much as one hundred percent less on certain transactions however is in profit on that under the final taxation regime that's a good observation there are different categories 7b falls under that
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but they are certain other types which might not abdul ahad if a person is a widow and she has overseas income but doesn't file return is her income taxable or exempt if the video has overseas income now there would be a few questions whether she has overseas assets whether she has assets in Pakistan on this it would did depend
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whether she needs to file the income tax return or not but any foreign source income would not be taxable in Pakistan if it's repatriated through proper banking channel it however would depend if there is a double taxation treaty between the two countries Reza Hussan give an example of adjustable withholding tax tax on banking transactions tari Khan sir I'm working in shatral and I'm originally from savate so I have heard that chitral comes in provincial
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II administered tribal area rule my employer is based in Islamabad and they withheld my text my question is am i exempt from text if I am then how can I get exemption certificate from our t.o.p shower thank you sir okay that's a very interesting question Tariq static the thing is this you need to differentiate between sales tax and income tax we are talking about income tax return so income tax falls
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within the purview of FPR Federal Board of Revenue is the regulatory body that administers and manages a post 18 amendment sales tax on services not the goods only sales sex on services has been given to the province's so now we have Punjab Revenue Authority Sen revenue board KP Revenue Authority Balochistan Zhan body so all these bodies are administering these sales tax
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on services within the jurisdiction of a province they are different the text that is deducted from your salary is advance income tax is income tax and that is administered by FBR so there is no categorization of the provincial body within this I hope that answers your question barbara lee where to treat withholding tax deducted on mobile load you'll see that Barbara in a bit Mohamed awesome I
47:04
find my return on 29 February February whereas as / FP our last date was 28 February so then you need to pay the fine depending on your status whether you are individual AOP or company it may be just as low as a thousand rupees the Zhang Han is text with held against banking transactions from non-resident refundable know it can be adjustable if that non-resident is registered has some Pakistan source income is filing the
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income tax return Sayed Mohammed was Co San Cosme oh good to see you cos missive again sir if a company's deducting income tax on any payment against resident of Azad Jammu and Kashmir the they have to deposit this text in FBR yes they will need to Omar Maqsood what is the D registration process for sole proprietorship already answered there's an Hassan Javed please we'll elaborate
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the concept of fiscal year and atl list upgradation phase on this has already been done in detail I'll try to do a summary or recap at the end of the session and the recording of the session with will also be available I just wait till the end of the session if you still feel you are not totally clear on the concept feel free to contact me on LinkedIn Mohsen Akram why the non filer term has been changed this has already
48:39
been answered Omer bin abdulaziz person exempted from filing okay that has been answered Emma data has asked sir if we pay the penalty for late tax return then in how many days a person again is included in the atl immediately in the nest and next atl up tradition okay that he'd honey if if a window if a widow have no problem have has if a video has number of
49:13
properties in her name still she will be exempt from filing income tax return well it depends whether she has an income or not if she has no income no taxable income and doesn't fall in any of the other requirements then yes if she has properties if she has taxable income then just by being word she offer video she can't claim exemption vikas amethyst please explain the conditions for a resident and non-resident persons according to recent
49:46
changes it has been explained Mohamed Hamzeh maybe the question is irrelevant but I need to confirm this okay what is it is it true that FPR has started to issue refunds yeah the mechanism has started some refunds have been issued but they have largely been focused on the export oriented businesses osama Teavana penalty for atl for companies is also thousand rupees now ten thousand ZM
50:22
Abbas hello salem good to hear from you are non-for-profit registered under section 42 required to file the return Nizam can you hear me are you back against it Nizam can you open the mic off theorem he has been a long-standing member and attained a lot of our sessions I would like him to ask the question himself jigum Nizam is about to
50:58
unmute your mic so you can ask your question after the question has been asked could you Nizam please mute the mic again his might is mic is unmuted Oh take em applause you may ask your question hello how are you Salam alaikum I'm very well how are you good to hear from you I am thank you so much and thank you for providing me the opportunity to speak here I just wanted
51:31
a clarity over this section 42 registered company you can say it a non-for-profit organization so are they required to file their taxes or they are totally exempt from that like they have the exemption certificate but I am not sure if they are required to file that okay there are two parts to your question I'll answer them both first of all as far as the income tax return is concerned they are not exempted they have to file the income tax return now
52:03
the exemption certificate that you receive serum that is not about not filing the income tax return that is about certain taxes that are not applicable on not-for-profit so those taxes would not be levied on not-for-profit but a not-for-profit registered under section 42 would still need to file their income tax return it might be that they have no tax liability at all it might be that they have some excess tax that was withheld maybe when
52:36
they were not issued the exemption certificate that might be adjustable no matter what the cases but they are required to file their income tax return and will II hope that answers the question so that brings us to the next one Ali Aslam if the widow is running her own business and substantial incomes still she is exempt from filing they return not in that case Ali she would need to file the income tax return Sardar Muhammad Ali
53:06
Mujahideen mashallah that's quite a big name Siddartha if % P is fine and his name appears in ATL however at the time of filing withholding tax return FB our system automatically applies on file a tax rate how to deal with this well it might be that the person filed the income tax return after the withholding tax was deducted so whatever withholding tax was deducted would be now be declared in the income tax return
53:37
and they'll claim an adjustability against that Masonic ROM do I get any relief on loss on capital disposal we are about to see that when we file the income tax return Mohamed Hamzeh sir isn't it's 600,000 now the BTL limit now it's different for salaried individual we were referring to the business individual ready it asked the same question
54:08
the BTL limit that's answered Salomon Salim those people who are exempt will their name be shown in ATL now if not how they will they appear in banking system by a banking system you must mean how would they appear as a filer in the banking system for that Salomon they would need to file their income tax return so I think we have asked answered a lot of question soon Islam if you could mark that the last question that we answered was by Salomon Salim and the
54:41
next one we have to answer is from surah Shah so I can just go back to the presentation and we'll come back to the question in the next week you and I break are you with me Nizza yesin okay great so the next one is the actual practical demonstration of filing an income tax return and the common issues and I actually wanted to show you how it's done practically rather than just talking about it but one of the biggest challenge was that we had filed
55:16
returns of all our clients and time anyway I spoke with one of the client who was kind enough to allow us to share his detail or to show a demo however the return was already filed but we had opened I revised it and form it which is pretty much the same this is so you can actually see how things are done and can get a taste of the practical aspects of it so let's do that now so I've already locked in what you need
55:52
to do is you go on fpr's website which is f PR dot govt dot PK then you click on this link for iris income-tax and you'll have this tab open you'll enter the login ID and password which I already have and then you'll click on login and you'll come in this system so here we logged in and we are in the system so when you are filing the income tax return for the first time you'll go up here
56:29
on the declaration tab you'll click on the drop down menu and you'll choose one of the tax return that is applicable to you if you are a cell rate individual who has only salary income or salary is more than 50 percent of his or her total income you can click on this link if you are a business or a person who is only dealing in areas where he or she is only ending up paying the statement of final
57:01
taxation then you don't need to file a detailed tax return you can simply click on statement of final taxation if you are a new business in a transitional period and want to file the tax return for incomplete or transitional year you would need to click on this link for the incomplete or transitional year tax return and this is the normal return for individual AUP or company that is where you do it normally clink click on and then after that you would also need to
57:32
file the wealth statement if you are an individual and that would be by clicking on this link 1 1 6 2 wealth statement if you are a non-resident Pakistan origin person having known Pakistan source income you can simply click on this simple Performa fill in some basic details file that instead of filing the whole tax return and your name would appear on the atl you would need to file 1 1 6 a 1 4 an income and asset statement for resident individuals if
58:04
you have foreign source income and assets and your resident in Pakistan last 2 are not very common but just for the sake of complete yes a non-resident ship owner or charter would need to file this one if they have any affairs in Pakistan but they are not resident in Pakistan and similarly an aircraft the honor or charter who is a non-resident in Pakistan but may have assets or income in Pakistan would need to file a return by clicking on this so
58:35
let's assuming that you clicked on this let's see what you'll be getting into so we can go in the draw section click on declaration click on the format and click on edit so this is what a text return looks like for those individual who are not usually dealing with filing the tax return I'm sure many of you would be filing the tax return and I've conducted countless sessions on filing
59:06
the income tax return from accs platform and even for corporates and other institutions otherwise but for those of our participants who are new to this arena this is how it looks like the only differences this says 1 1 4 6 this is a revised income tax return draft as I've shared since the text return of everyone was already filed this was the only way I could show you this text return in real unless one of you want to volunteer
59:40
who hasn't filed their tax return yet and then I can show you the 1 1 4 4 2 so anyone who wants to volunteer their details that would need to be someone who hasn't filed their income tax return till now okay Nadia me saying they can't hear me can you guys hear me okay great so Natyam unfortunately it seems like the problem is at your end so anybody who is comfortable sharing their text
01:00:17
details and who have not filed their income tax return yet can share that you have 30 seconds if nobody shares in 30 seconds then I would assume that nobody wants to and will just continue with this form okay most of the people have filed silly Huma and Sahara have not filed so if you guys want to share your detail then I'll comfortable with them being shown here then please feel free to share and I
01:00:55
were to log in and show that anyone who is willing to share would need to share their iris login ID and password in the Q&A box where you are typing your questions okay I think time is about to be up and we got the first one okay don't you see
01:01:27
volunteer res visib just typed the ID password so we have the first one but you can see why return obviously rather than everyone would be able to see that's the thing only share if you are comfortable in sharing that it's not required it's your call we have managed a detail but if you are comfortable sharing you can so I've got details of several people it is obviously confidential so I would just
01:02:03
freeze my screen for a minute while I log in so their login detail is secure and I would go with the first one who shared his detail that is half his vessel just bear with me let me just log in and I'll come back and reconnect you guys with the screen you you you you okay guys we have locked in and I would
01:02:51
like to thank office vessel on behalf of everyone and everyone else - including shibir Hanif Sahara and everyone else who shared their details we'll just continue with the first one that was shared of officer thank you for sharing your details so I'll quickly have a look whether detect certain 419 was filed no it was not filed I clicked on the completed tasks and just confirmed so I look in the draw section whether there is a draft there
01:03:23
is a draft for 2018 but 2018 was already filed okay so the draft is not relevant I'll go in the inbox and see whether there's a notice to file 2019 yes there is so what would happen now because the due date has passed and the tax return was not filed whose detail have you shared half is up have you taken a permission from them because I can see
01:03:54
it's not your detail ethically we need to be sure that we have the permission from the person we are about to work on yes sure sir okay so officer has taken the permission that's fine so as we can see the text written was not filed within the due time so what happened here is that FPR has sent a notice under section 1 1 4 subsection 4 to file the return of income for complete here which is 2019 so now we can't go to
01:04:26
declaration and click on this tab instead we have to file the return by way of this notice so how we do that we'll click on this link we'll click on view or we can directly click on reply it's the same either way and it's asking us which return we want to file 1 1 4 subsection 4 which is a return for the complete here but a normal text return or 1 1 5 subsection 5 which is again for the complete text here but a statement of
01:04:56
final taxation so which one do we want to file office up is this person your client or friend dealing only in matters that pertain to final taxation or does he fall under normal tech switching so office up has confirmed the normal tax regime so we'll select one one for subsection 4 in this case and the text return would open here you go okay so now what they have done is while the text return does look a bit
01:05:32
complicated but they have arranged that and with that they have also done something very good which I'll be referring to in a bit so first of all you can see the first tab here where my cursor is is employment so if there is any income from salary that needs to be mentioned there let's say this particular person is actually earning 2 lakh per month so his total annual
01:06:02
salary was 24 lakh okay then we have two tabs about subject amongst exempt from tax subject to fix final text and amount subject to normal text any one should I write anything in this section in this tab that is appearing which is saying I need to mention any amount which is either exempt from tax or subject to a fixed or final tax anyone
01:06:40
no not in exempt total income is taxable annum yes medical exemptions on medical allowance medical medical medical medical okay okay okay I'll give you a very quick hint if you are unsure there is one way I don't normally advise that it is like a quick tip I'm sharing it but don't make it a habit actually go through my lectures on income tax ordinance get used to the taxation law but if you are
01:07:11
in a rush and you are not sure what you can quickly do in addition to referring to the taxation laws click on this text chargeable and payments there you can see that we have taps for adjustable text and final fixed minimum average relevant text so click on adjustable text and find out whether the thing you are clicking looking for falls under adjustable text if it falls under adjustable text that's normal text regime if it falls on the final fixed
01:07:43
minimum average then it would appear in the center section so we can see that salary for federal government employees under Section 149 salary for provincial employees corporate sector employees or other employees would all fall within this area however we are aware that there is a certain limit which is exempt from taxation so the amount that is exempt from tax the BTL would be
01:08:14
mentioned and the rest of the amount would be left and then we'll click on the calculate button and iris would do the rest of the calculation if we have any other cut wizards or expenditure reimbursements we would mention them here now let's assume that this person also has some property there is no limit mean there is no law that if you are an employee you can't have any other source of business you can't have a property
01:08:45
that you have let out you can so let's assume that this person also has a property from where they are earning the our rental income so let's say that the rent received or receivable are 18 lakh so one and a half lakh per month one tenth of the amount not adjustable against rent that is normally what you refer to as deep agree let's assume that
01:09:16
this is an ongoing rental so this is not applicable any forfeited deposit under a contract for sale of property would also pair here why does it make any sense why would have forfeited deposit under a contract for sale of property appear as income from property anyone you okay you guys I have 30 seconds token
01:09:56
money property income this is income of Landlord premkumar yes okay Nabila cram Sundy Fahad Muslim Reserve is the most fairly Shaikh thank you all for responding well the concept is very simple and being qualified accountants you should be of all the people able to understand it if a person received a deposit for the sale of a property and the seal didn't actually go ahead and
01:10:27
that deposit is forfeited that person now has that income they now have that amount with them that is their income so that has to be assessed and the text has to be charged on that if the sale actually went ahead then they would calculate the gain or loss on the disposal and they'll charge any capital gain accordingly depending on the value of the property and whether they are on the sale or the purchase
01:10:59
side they would also pay the advance income tax but in the scenario where the sale did not go ahead it was cancelled and he deposit that was forfeited and received by the potential seller is the income of the server so there is a tax charge on that hope that makes sense so let's say that they'll receive the deposit of 3 lakh 19 thousand but the property sale couldn't go ahead so that is also the income then any deductions
01:11:32
well the law was changed I never put in [Music] okay we are receiving some questions we'll be answering the questions in a bit okay forfeited deposit under contract for sale of properties done now we are talking about the deductions against Frank so what can be deductions if you are an individual there are not any automated deduction there used to be one by fifth that you can take as a
01:12:07
repair and maintenance charged not anymore in the case of a company you still can so any deduction against your rent can be if there is an actual damage there is an actual material expense that incurred you can put that in deductions otherwise there would be no deduction per se so that's the income from rental I know you might have some questions just write them down and gone free I'll be answering them let's assume that this
01:12:38
person was also working in a business the employment was in private sectors so they allowed him to a side business just so we can quickly have a look at all the various sections the returns would likely be similar it would be a bit different in the case of a company I have a detailed session on filing the income tax returns of corporate entities which you can see on my social media networks it the recording
01:13:10
I am sure is available on my YouTube channel you can search that by my name as a he me too but likely the concept are the same so let's have a look if the business is of trading items are manufacturing then you will enter it all the relevant figures here just have a quick look what does this form this pro forma look like let me give you a hint let me help you it's related to a financial statement
01:13:42
the answer is a financial statement that you have studied practice and mastered a lot you you cash flow statements Salman attic no Salman you don't have accounting depreciation in cash flow statement income statement income statement P&L Maya Fatma volleyed Ameth genetic ball at Perpignan e sake Latif Ali Aslam air finally Faison Khan sadar Muhammad Ali
01:14:27
Mohideen and everyone else who is commenting now you are all correct so basically what you are looking at is a taxation version of your P&L profit and loss account or your income statement so you'll enter any cost of goods sold opening stock ad purchases you have your admin selling expenses celery wages you have fuel you basically this is your trading account not the entire P&L so this would be calculating your GP it
01:15:00
would end up calculating your GP gross profit and then you'll have a separate tab to enter your management and selling expenses any salaries for those staff repair and maintenance communication utility bills traveling rent rates Texas says charges stationery repair maintenance advertisement insurance professional charges profit on that brokerage indirect expenses irrecoverable that's obsolete stock
01:15:31
accounting loss sale on tangibles accounting loss or sale are on sale of assets accounting depreciation amortization then any inadmissible or admissible deductions as per the taxation laws would be added back and I told you that they have done quite a few good things which I'll be talking about the first one being here they have mentioned for you all the things that needs to be added back which are inadmissible and they have given the
01:16:03
relevant sections under which they need to be added back so for example you are not sure of the unrecognized unapproved funds so you can refer to the section 21 subsection E we'll look there and see whether yours fall under that category and then they have admissible deductions accounting gains on sale of tangible our text loss on sale of intangible etcetera any unabsorbed text depreciation from previous year which can be entered here
01:16:34
and this word brings us to bring us to any other adjustment which are basically the unadjusted losses that might be carried forward from the last six years and then we'll have the business asset equity and liability just have a quick look which financial statement does this performer resemble to you so we are getting all the right answers here let me just quickly open that
01:17:12
mashallah the correct answers are coming so quickly well we have close to four and a half hundred people locked in right now so I wanted to take everyone's name seems like might not be possible so I'll just take as many as I can Mohammad Fahad Muhammad Usman Ali Sajjad Sheikh you are all right Mohammed
01:17:43
Ali Hodja rosie's Mohammad Sohail Iqbal so now Allah mmm possession Jamil Ilyas ah nice Oh a Siddiqui Mohammad Azam Muhammad Amir Muhammad Hassan Ashraf kashaf Maqbool Ali Rezai Kirmani Muhammad Ahmad so this is what you used to call the balance sheet or as is referred to now statement of financial position so well done guys and everyone else who commented rightly - and I can see some
01:18:16
people mentioned statement of cash flows and cash flow statement not at all guys come on just recall how can this be a cash flow statement we are talking about the assets the liabilities anyway this is more like a balance sheet so you being the accountants I don't need to tell you we can just plug in some numbers for the sake of filling this you won't actually do that this would be based on actual
01:18:45
data this is being done as an example so 15 million for land two and a half million or 25 million for properties building plant machinery and equipment can be 10 million a stock and sphere can be 5 million 5 lakh in fact cash and cash equivalents should at least be 5 million and any other asset can be 2 million and of we need to put in
01:19:18
the cash cash equivalent is done stalking Spears at once deposits okay and how much was the capital forty million and create creditors can be ten million and so create creditors can be
01:20:03
seven and a half million long term boring ten million and then our balance sheet is balanced now so this was in the case we were dealing with manufacturing or trading off items but as we all know that services is a very important segment of business now services actually is one of the fastest growing segments of business in Pakistan's economy and not just Pakistan's economy but world economy the knowledge economy the financial services they are all
01:20:34
based on services so if you are dealing in professional services you'll click on the gap of other revenues under business and enter the relevant figures here so for example let's say you are providing professional services which are subject to normal taxation and you are providing two and a half oh that's too big two and a half million 25 million should be fine okay you'll click on calculate and I
01:21:08
just will fill in the rest of the numbers for you there is a very important feature here which I would like you to pay attention to if you have been filing returns Iran here and want to import figures from the previous year because they are largely the same and there are only a few changes you can click on this button here and that would actually fill the return inculcated with figures from the prior year and you can then simply amend them as you want to anyway so this was the business segment will then move on to the capital assets
01:21:40
if you have disposed of any capital asset and there has been any gain or loss you would enter the figures here this is bifurcated between long and short term you'll then move on to the other sources if you have invested in bed boots certificate or a pensioner or someone who has a shorter family benefit account you'll enter your income here any royalties you have received any profit on that any other receipts any ground rent any annuity or pension you
01:22:11
are receiving they would all come under other sources of income this would bring us to the foreign sources and agricultural income if you have any foreign source income you would enter that here before I comment on that aren't foreign remittance exempt from taxation you hello anyone so you can actually type in your feedback in the Q&A section where you are asking the question yes yes yes
01:22:45
yes yes okay so if it is tax exempt why are we entering it here why is there a section for foreign income you you only IT related are exempt profit on TDRs business income you guys are simply amazing your responses are coming at the speed of lightning and it is simply not possible to read them but it's great I've read a few responses which are correct and they have disappeared and
01:23:30
the other responses are coming okay let me just clarify it for you and if you have answered this correctly you can actually pack yourself on your backs as an appreciation from me and if you were confused you can correct yourself so basically this is not foreign remittance this is foreign income the foreign income is taxable to what extent would depend on the double taxation treaties that Government of Pakistan may have that with the foreign countries but foreign income is a different ballgame
01:24:02
foreign income is not foreign remittance it's the proceeds of a foreign business or the services that you have provided by lieu of which you have received foreign income if there is any such income you would enter that here and similarly if you have any agricultural income and you have paid any agricultural income tax on that you would pay here you would mention the paid amounts here and the agricultural income here there is a very important thing that you should remember agricultural Texas are largely in the
01:24:34
provincial domain however there are some token income taxes that are levied at the federal level so you have to mention that here and now the provincial and the federal boards taxation regulators are working on actually amalgamating their data and collaborating with each other something that ACCC has also advocated for a long time so in future they can corroborate these figures because what people do is that they declare a lot of agricultural income to safe taxation at the federal level but they are not say paying the provincial taxes on the
01:25:06
similar income income level so such collaboration between federal and provincial taxation authorities would close this lacunae and this kind of tax avoidance or text scam scheme for the future now that this is out of the way and we are moving on to the last segment of our text return which is very crucial I would like to take some questions for next five to ten minutes and then we'll conclude the
01:25:39
income tax return so Nizam are you with me yes sir could you please continue the questions from where we left we have a question from wrong written please specify option for shop owner option for shop owner ROM you'll have to clarify your question I'm not sure what you have really asked here which option are you
01:26:12
referring to next one please you you you okay I'll ask the audience to ask questions so I can what if what is you'll ask the audience why you have the questions already nothing from the recent layover no no that's okay just continue asking the questions where we left just continue asking them we need to answer all the
01:27:02
questions at least as many as we can or is asking why they have provided balance sheet here we can insert the details and wealth statement okay who asked this question you Naresh Kumar nourish you only file a well statement if you are an individual and you file the balance sheet data if you are a business so if you are a business you won't be filing the wealth statement you will be filing a well statement in your capacity as an
01:27:43
individual I hope that answers the question and another thing which I should clarify if you look at this return they have modified the format of the return in this year we are yet to cover this but you can see the wealth statement is incorporated within the tax return now so if you are filing one of these newer tax returns which have been introduced in this next year and even in the last one so you'll be factually filling one continuous form and the
01:28:13
wealth statement would also be incorporated within it however when you'll be filing a revised to return you will need to file separately the income tax return and the bail statement revised once for that but as for the nourish question the question asked by Naresh Kumar I've already clarified the businesses do not need to file the well statement individuals do hence the businesses need to file the data of their business assets and liability and hence having the business asset equity and liability section there next one please
01:28:47
asking what will be the treatment while filing ITR for vehicle purchase on leasing arrangement just wait we are about to cover the well statement and you'll see how we will treat that we are to cover the depreciation schedule too so you'll be seeing that either way whether it's a business proposition or the individual proposition in both of these scenarios we will be covering the treatment don't worry next one where will account receivable treated and worker income statement income
01:29:22
statement account receivable would not come in income statement first of all we are filing tax return not the income statement these different sections resemble the trading account the profit and loss account and the balance sheet and the account receivable would come here you any other assets and your balance sheet hope that answers the question next one
01:29:55
Lenny Jay none much nani I hope I'm pronouncing it right where will we enter for a remittance in return you would not enter that in the income tax statement you had entered that and what we are about to cover okay let me show you since you have asked a question when we'll be doing the reconciliation there is a segment for foreign remittance this is where the remittances actually disclosed here
01:30:26
seven zero three five hope that answers the question next one please okay this question is a bit confusing here what does he take techniques for Tex Tex avoidance it's one question it's a good question what are the texts and you are saying yeah what are you asking me the taste for more acceptance is a good question yeah sure okay okay look the question that you have
01:31:10
asked is wast we can't possibly cover that today we actually do detailed week-long sessions on text planning then you have to asked a generic question it's a good question that you are interested in learning about detects planning however it depends on the scenario that you might be talking about and then there are endless possibilities so for example if we are talking about a service segment business that would be different if you are talking about industry or manufacturing that would be different then within this sector there
01:31:42
are several sub sectors if we are talking about service sector which is focused on IT services that would be different if we are talking about education services or financial services that would be different okay can you hear me guys you okay guys so anyway it like scenario again my answer would be the same send in a suggestion that you would like to have sessions on text planning and you can mention about which segments and inshallah we'll do that or otherwise if you have very specific QD which is not relevant to the session
01:32:37
today send me a message on LinkedIn next one is armed you or freelancing income although it is exempt for tax purposes as if someone is salaried and also half an relaunching in come out repeated the gemoro said if someone has salary and freelancing income how to treat that freelancing income is exempt as what he said what are implications for freelancing income although it is exempt for tax
01:33:18
purposes Nana it's not exempt it's your taxable income you are supposed to declare that okay and as if someone is sell weed and also having have freelancing income so here's two kinds of so we just showed you that you can have multiple sources of income it doesn't mean that you have to declare only one you would be declaring them all okay have you discussed agriculture income and where would we
01:33:58
included bond risks we just discussed that at farm were you not connected or did you take a quick sneaking break and just came back see we caught you by your question you next one okay Mohammad Ahmad asked a question where we account for income from NSC I've just shown that Hammad okay guys I'm showing again please pay attention
01:34:42
don't take sneaking breaks because if you were already attending the session with full attention you couldn't have possibly missed it here are other so hang on hang on is my apologies it's this question is has been asked at 5:23 my apologies okay that's why we look at harm that's fine it's okay let me just go push magazine just show them anyway
01:35:09
so okay so here we are so any food certificates or pensioner benefit account income would be declared here and any agricultural income would be declared here so I hope that answers the question next one you you you hello almost lead ask if tax here one month income is exempt
01:36:07
foreign IT related and rest of all months our local shared income will that first month one month still be exempt so if I understand that correctly he's saying that for one month he was providing IT services which were exempt and for the remaining eleven months he had a salaried income which was taxable is that what he asked I repeat the question if in a text year one month
01:36:39
income is exempt foreign IT related and rest of all months local salary income will that one month still exempt yes next okay if someone is giving services a software development and see foreign income will it be exempt yes if they are receiving it to proper banking Channel and they
01:37:11
have the export license all right next okay file on Javed person Javed is asking what if someone has not disclosed his or her feel dancing income foreign or for income what would be the implications also please confirm whether limit has been extended to 25,000 pounds from 5k okay
01:37:58
so if someone is not disclosing what would be the implications as a professional we would always advise against that the implications would be same as in the case of any other text fraud or mistake Eurasian so depending on the severity it can range from fines to all the way to prosecution in the worst case scenarios which limit are you referring to from five or twenty five thousand please elaborate next question okay Norris Allen asked tax credit on
01:38:32
investments in mutual funds and insurance some some under the same section whatever person invests in both to the maximum limit if a person invests okay I think we have lost Nizam take charge of the questions myself and start answering them I'll try to go backwards so we'll answer the most recent questions first Homer has asked while filing salary income I did not
01:39:25
insert 600,000 exempt slap in exempt income proportion but it still calculates the correct amount in computation is it necessary to feed in first of all Omar good to have you here secondly I'll show you that by example in a bit Mohammed ijazah asked will it increase the exemption limit with some percentage not sure what you are referring to adjust please elaborate secondary stock ACCA membership paid then refunded from employer is this taxable income of the
01:39:57
employee yes because that's basically a benefit in kind Mohamed Mohsen Bilal could we have handout of property income related information please sure say it fussy harsh me where can i disclose income under share trading you have seen at the income from other sources and then we'll be covering the next section of adjustable non-adjustable taxation where the taxation deduction and the income total received from dividend income would be
01:40:27
disclosed Bilal Tariq dear sir can you please share income tax regulation for filing the return if she were seeing my screen that's what I was exploring I'm about to give you the direct link Mohammed sooo here so bear what you do if a person is receiving foreign support remittance from family receive it to formal banking channels and up to the allowable limit there are no tax implications muti Blasi a person whose salary is not taxable should he/she submit tax return
01:40:59
for it if they are do not fall in any of the other required categories then no because motiva covered detail categories and requirements in the beginning that it's not just having taxable income that would require you to become a filer there are a whole lot of other requirements if you do not have taxable income but you fall in one of the other categories you might still need to file your tax return for hot safe that we can claim interest on house loan as tax credit if yes then please refer to
01:41:31
section and trust on house loan as tax credit you've lost me there fart what context are you referring to faison Hasan Javed what if someone has not disclosed I think that was already answered Russia de nieve mr. Nizam should sit with you if possible Russia's social distancing on a serious note we are also working from home all of us so that's not possible but it's ok
01:42:08
these minor things can happen and I've taken charge now so hopefully you won't be feeling any discomfort now okay so next one say it foresee harsh mean trust paid to Bank on house loan is deductible or not sir now it comes in reconciliation it's not deductible per se mr. big for non-resident Pakistanis will you cover tax returns mr. big I have covered that in a detail session
01:42:39
it's a simple form if you do not have any Pakistan source income you are just giving a declaration or listing of your foreign assets Abdul Ronnie Ansari question on tech statement of financial position which value of land should be insert lease value on paper or the market value the least value on paper or FPR value can we reveal land or building as well in subsequent year mr. Zaheer is
01:43:09
it true that if someone file late return they will automatically qualify for audit very good question of the honey I'm sorry sir have quite a few questions okay so which value should you declare if you have a PR value you will declare that if you don't have a PR value you will declare the purchase price the cost price on paper I is it true whether someone who file return late would automatically qualify for audit that's what used to happen to 140 but that section is now obsolete so it's not
01:43:39
applicable anymore doesn't happen now is there a limit on receiving foreign remittance from abroad from family members premkumar no limit on receiving the foreign remittance from abroad but yes there is a limit after which you have to disclose the source why you are receiving these funds Siddiqui Sadiq Ameth declaring the well statement for the first time and disclosing property will FPR not ask about the source of income for the property under
01:44:11
Section triple one they can ask there is nothing limiting them but normally they don't unless you are a very big fish a miracie question I received an email from SACP that the company must file income tax returns for all of its employees my question is that is there any such compulsion under income tax ordinance or is it a corporate compliance issue Amaro you can share the directive with me basically a CCP is encouraging companies to educate their employees and file returns for them I'm not sure if this is actually a
01:44:42
requirement for them but you can just whatsapp me um I actually saw your whatsapp messages but had the CPD session and a few other meetings so hopefully I'll Chi have fed you tomorrow share with me the notice and I will guide you accordingly alehrer zakir money can a seller 8% claim ACCC subscription fee as a deductible expense against salary income Ali there are no expenses against salary income first thing but yes in reconciliation you can
01:45:13
show that as an expense if he has kindly referred to the SRO that's already been answered Zahra Shah is CGT adjustable Zara adjustable against what Muhammad Zhu here so bad what is the allowable limit in what context were here new routine bomani how to treat gradually and Provident Fund you'll declared them and appropriate Texas would be applicable normally on gradua teas that are given
01:45:44
to you on retirement there are no tax implications Ali Shah Nawaz Ghazi but definitely it would depend whether that was an approved fund or not and what were the actual modalities Ali Shah Nawaz Ghazi YB food NSC income is not exempt and also the pension account up to 50 lakh the NSA is not exempt well Ali we can always argue whether law is a good lord the backlog but when a law is in existence we have to comply with that Faison Husson I would like to
01:46:16
answer your questions in more detail but because the time is limited and we have so many questions I'm trying to answer everyone to the point so hopefully that is addressing your Curie if not you can even after the session send me a message on LinkedIn or other social media so our salon Rezai saying sir if we have saving account which we are receiving interest income we have to report it in other sources yes we should report it was a milk olya can you please explain
01:46:48
that where should we enter freelancing income in return filing other sources and finally I suggest the comment and question tab should be separate they already are Oh comment that's a good idea we can send that Mohammed the jaws will it increased the exemption limit with some percentage I think this must be a continuation of some question that was previously asked secondary stock ACCA membership when paid when they funded
01:47:19
from employer is taxable income of employee yes it is okay so Mohammed Mansoor Khan is asking I gave a loan to my friend before registering myself as a tax payer he will return the same among this month which is around 8 million rupees but now I am registered how to tackle this issue no issue when you'll file your income tax return if the amount is outstanding declare your tax per se if you have already received it that would appear in your cash in hand balance
01:47:52
you okay guys let's go back to our topic and then we'll come back to the question answer session later on so you can see on your screen these are video tutorials from fpr's website dealing with all these individual segments I have gone through these tutorials they are basically uploaded on YouTube and I do recommend you to have a look at them so for example just have a look here
01:49:06
okay the reason for showing you guys this was that normally when we used to do income tax return filing session they used to be a full day session of eight hours long and we used to discuss each and every point in detail because we only have two hour session today are going to the limitation the sessions are done during this ongoing crisis and otherwise there was a thought that the attention span is improved if it's a two
01:49:37
hour session I think that in the interest of knowledge sharing you guys should go through all these video clips these are short video clips they would give you a good idea of all the individual categories and many of your questions will be answered if however after going through these you still have any questions feel free to ask me I would also encourage you to let us know what you think whether these two-hour sessions are sufficient or you think the
01:50:09
duration of these sessions should be increased if the duration is increased do you think it would be good for the attention span and the retention please do share your feedback anyway coming back to the return so we reached the foreign sources and agricultural income section and the next one was tax chargeable and payments so if you have any deductible allowances is a card under Section 62 any of the approves the
01:50:38
card institution worker Welfare Fund profit on death educational expenses they would all be declared here if we have any income tax on working capital under ninety nine a of nine scheduled it would be mentioned here if you are a full-time teacher or foreign filmmaker your tax reductions would be mentioned here if you made any charitable donations but to approved funds that is important the charitable donation has
01:51:10
to be made to n approve fund only they would come here okay similarly any tax credit for investment in shirasu cook and life insurance premium health insurance contribution to your approved Bunch pension fund they would come in all these section there's a particular formula how you would calculate this tax credit so for example for approved pension fund you need to go to section 63 of the income tax ordinance see the formula there and do the working
01:51:49
accordingly then comes the adjustable text section if any withholding text has been deducted already then you would mention that here so for example if you were an importer if you are an importer or you are a employee of federal government and Texas have previously already been deducted you would mention them here or if you supplied goods under section 153 and withholding taxes were deducted from your payment you would mention them here if the text was deducted on cash withdrawal from banking transaction you would enter the detail
01:52:20
layer you'll click on the plus sign you'll enter the bank account details all your account number bank institution and the amount that was deducted then other than cash withdrawal if they were other banking transaction on which taxes were deducted you will need to mention them to you then we'll move on to the tab of final fixed minimum average relevant reduce taxes and for them you would need to mention any Texas that have been deducted so for some areas they are categorization and the
01:52:52
Texas can be fixed or final or adjustable depending on the exact item that you are dealing you would need to refer to the relevant sections which are mentioned here so for import you will need to see section 1 4 8 and the relevant schedule to see whether the item that you are importing the text on that would fall within the adjustable or final fixed regime so once all this is entered you would click on the computation tab click on calculate and this would calculate your tax liability so a question that Tamar asked whom are
01:53:23
asked whether he need to enter any amount here or not so if you have any allowance that is exempt from txt so let's say my medical allowance is 600,000 I would enter that here if I do not have any medical allowance any exempt limit of that medical allowance then I would not enter that here so in this case let's assume that out of this 24 lakh 6 lakh is the medical allowance that my company is paying me 50 thousand per annum so I'll click on the calculate tab now then I'll
01:53:53
go into the computation tab click on calculate tab so all my income from salary from property from business from other sources etc are shown my total tax liability is computed let's say that some of the text was already deducted so let's say that as an employee let's just put in a random figure across 24 lakhs so let's say 2 lakh was deducted from my income and let's say that as a business
01:54:24
I was providing let's say I was providing goods and let's say 5 lakh has been deducted ok so obviously you would look at the actual data when you are filling the return this is just a hypothetical scenario to give you an example so now when you calculate this you'll see that the withholding income tax that was deducted already is shown here and your total tax liability is
01:54:57
reduced by that amount now we have filed the income tax return but as an individual you can see that the statement under section 1 1 6 of the Income Tax ordinance 2001 which is your wealth statement needs to be filed so you need to fill in your individual expenses your personal expenses they can be vehicle running electricity telephone medical educational whatever and if you are receiving any contribution by family members you can also mention that then
01:55:30
you have to show your wealth statement any assets that you may have you'll have to enter those details here and then finally there would be a reconsideration of the net asset so it would be showing the net asset that you declared the previous year the net asset you declared the this year any income that you declared subject to normal text you'll have to actually see what you have declared in your income tax return for this so the return income that you have declared subject to normal text you'll
01:56:01
add that up the amount that you have the declared subject to final taxation you lag that up and then you'll mention all these incomes here so let's put in some figures because we are short on time let's just randomly put in the figures so you can actually see how this works so now you can see that this year I've earned a lot and my assets have not increased so there is a difference in the reconciliation I have to account for that I might be putting all this in my
01:56:31
cash in bank cash in hand or cash in bank so I'll simply increase these figures if this is the cash in hand or bank then I entered that figure there and then I'll press calculate and this reconciliation should come up to 0 once this is done if I'm also a business individual I would need to enter my fixed assets schedule which you are all aware of being accountants here then if I am an importer and I want to opt out
01:57:03
of PTR I can click this if I fall within the minimum tax regime being importer of plastic raw material I'll fill this in otherwise I'll just leave this because there is a text liability I can't file my income tax return till I submit my income tax liability so I'll save this and I'll actually create a CPR for my Tech's liability submit that once that is submitted I'll click here I'll search here and a CPR would appear I'll click that and that would be appearing here
01:57:35
and then I'll be able to submit my tax return but before submitting I would have to verify the pin and then I'll click Submit and the return would be submitted I'm not gonna submit this return because this fine gentleman shared his data and this is all hypothetical we don't want to have him land in a trouble for just being good to us so I hope you have gotten a fair idea of how income tax returns filed I know you would have a lot of
01:58:05
questions how to create the challange etcetera but this tutorial that I've just shared with you has many videos about how to do the tax payment how to file de return how to file the well statement for salaried individual please go through these videos these are short videos but would compensate you for the lack of time we had at our hands today even after the videos if you have any confusion again eridan again i've repeated that please feel free to
01:58:36
contact me on any of my social media links and i'll be more than happy to guide you to and as i promised with you on your screen you can now see my contact details the best way to reach me is on LinkedIn if you do decide to send me an email or send me a whatsapp message the best way is to introduce yourself if you are interacting with me for the first time I will definitely answer you but as you can imagine there
01:59:07
are many different limitations on the time so it might be difficult please bear with me if I don't respond to you immediately but I will respond to you so I would just go a little over the time and I would try to answer as many questions as we can now and thank you very much for being such a nice audience so let's answer some questions ok many
01:59:37
comments and questions so okay um also must say it's question treatment okay this shun has asked treatment of income received that is credited into your account from mutual funds for their any gains realized but not received in closing values of mutual funds of an individual the Shan not the topic of today send me a message on LinkedIn Muhammad Khalid Mohammed Tariq okay please guide income tax refundable is
02:00:15
adjusted against future tax liability or refunded to cash check it's not income tax a fundable it's the excess income tax that you have paid you can either apply for a refund or adjustment against future liability in some scenarios it can only be carried forward AG for adjustment in others it can be applied for as a refund to but practically refunds are cumbersome so many businesses prefer to get them adjusted against future liability hope that answers your question Naresh Kumar asked where we can insert the capital gain loss to be carried forward
02:00:46
Naresh I have already shown that the video of this session would be available so you'll be able to see that Nenita jam net next nani I hope I pronounced that properly Nenita if not my apologies if an individual's income is taxable in texier 2018 and started filing return for text from texia 2018 but then that individual has opening balance in the bank account and has received notice from texter thought is what should the
02:01:16
individual do Nenita the individual should respond now what should they respond would depend on what notice have they received Sajjad share if an individual was private employee for six month and remained government federal employee for next six months then which option he would choose in the return he would segregate declare his income for six month as private six month as government employee Mohammad Amir Khan if we have text refundable how can we proceed by applying for a tax refund
02:01:49
Tariq Han for individuals do we need to separately file well statement we need to file well statement now they are incorporated in the format of the original text return however if you are going for a revised text return you would need to file a separate statement okay okay okay okay okay commence thanks for your kind comments who pays agricultural tax and what sets criteria we already discussed that Hara
02:02:28
sir please arrange a session on filing quarterly advance text mother essen ok please send us an email you can send that to me directly or to members affair or send me that on LinkedIn and I will pass that on and inshallah we'll arrange that Salim Sidhu Dean sir where we enter ACC and we'll subscription and return in your expenses reconciliation or if your employer is paying that or if he is reimbursing you as a benefit in kind in
02:03:00
this celery other perquisite section Bilal Emeth if someone is giving services a software developer and receive foreign income will it be exempt IP export are currently exempt if you fulfil all the other criteria it will be ok um I think we have a lot of question we might even need to do another session on this one I will discuss that and get back to you I hope today's session was of value for you and these two ours were
02:03:31
a positive investment these are testing times you might have free time much more free time or at your hand use them positively attend all these CPD series if you want to equip yourself the taxation knowledge in more detail you can subscribe to my youtube channel to you have free of cost recordings available there a CCS GoToWebinar channel will also have the recordings of these sessions which you can attend do
02:04:04
let us know if you want the timing of the sessions to be extended do let us know which other topics interest you if you have any specific questions feel free to connect with me on LinkedIn feel free to attend the future sessions these are complementary there is no charge for you and this would be a good way to turn your free time into a blessing by developing your professional skills I hope this session added value to you thank you very much for your time thank you very much for being such a nice
02:04:35
audience have a good day take care bye bye you you

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