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FBR empowered through finance act 2016 to enforce income tax return of past 10 years

The government has taken an initiative through the finance act 2016 and the parliament approved the bill aimed at  people could not avoid filing tax returns as the people who did not file returns in last five years are enabled through the bill that they will be asked to file returns of last 10 years time.

For the purpose the government has amended section 5 of Section 114 to Income Tax Ordinance, 2001, empowered the tax authorities that in case a person who has not filed return for any of the last five completed tax years notice under sub-section (4) may be issued in respect of one or more of the last ten completed tax years. While sub-section 4 empowers a Commissioner Inland Revenue to issue notice for filing return to a person.

Under Section 114 persons or corporate entities are required to file returns are included:
(a) every company, (ab) 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; or
(ac) any non-profit organization, (ad) any welfare institution;(b) any person not covered by clause 8(a), (ab), (ac) or (ad) who,—(i) has been charged to tax in respect of any of the two preceding tax years;
(ii) claims a loss carried forward under this Ordinance for a tax year;(iii) owns immovable property with a land area of two hundred and fifty square yards or more or owns 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 a Cantonment; or the Islamabad Capital Territory;(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;] (v) owns a flat having covered area of two thousand square feet or more located in a rating area;(vi) owns a motor vehicle having engine capacity above 1000 CC;(vii) has obtained National Tax Number; or (viii) is the holder of commercial or industrial connection of connection of electricity where the amount of annual bill exceeds rupees five hundred thousand; or (ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan.