The Federal Board of Revenue (FBR) has imposed a condition on Pakistani citizens earning profit on debt to submit a certificate on plain paper that total profit on debt received during the tax year from all investments has not exceeded Rs. 500,000 for paying a lower rate of 10 percent tax.
FBR has issued an income tax circular number 7 of 2020 here to clarify the issue of certificate submission by the earners of profit on debt.
The FBR’s circular revealed that the general rate of the tax deduction on profit on debt under section 151 of the Income Tax Ordinance, 2001 is 15% of the profit. However, the proviso to the Division IA of Part III of the First Schedule to the Income Tax Ordinance, 2001, provides that the tax rate shall be 10% in cases where the taxpayer furnishes a certificate to the payer of the profit on debt that during the tax year, total yield or profit payable in his case shall remain at Rs. 500,000/- or less.
Queries have been received regarding the nature or format of the above-referred certificate. It is clarified that the required certificate is to be furnished by the recipient of the profit on debt to the payer of such profit to the effect that total profit on debt received/receivable during the tax year from all investments in his case shall not exceed Rs. 500,000/-.
The requisite certificate can be submitted on plain paper, FBR added.
Actually the problem is in system,
while filling the return from every one is mentioning their profit amount.
System generated tax rate byself,
even below or greater by Rs.500,000/ all tax generated automatically by 15%,
And could not accept by additional paid challan of 5% difference. And all have paid the difference amount or they have adjusted their refund amount.
Now the return from has been submitted.
What to do of this circular.
Note the payer department already deducted 10% without any plain paper certificate. Even though return didn’t accept 10% all were in so much confusion.
Now this foolish notice issued by FBR which is totally rubbish.
Ha ha. Fbr officials were sleeping. It is true that in tax return there was calculation of 15% and there was no 10% calculation for bank profit. Now taxpayers have submitted their tax returns and paid extra 5%. Now fbr circular is “fazool”. There were many mistakes in the tax returns 2020. Lot of money spend on fbr but all in vain. Fbr is looting the world bank loan in the name of reforms.