The government is taking a big step to facilitate 1.4 million salaried individuals/pensioners for the tax year 2023 by introducing a separate salary return in simplified form or revision of the existing income tax return form.
The Federal Board of Revenue (FBR) took the decision on Wednesday following directives of the Federal Tax Ombudsman (FTO) providing relief to the salaried individuals/pensioners.
An order of the FTO office revealed that an own motion investigation was initiated on hardships caused to salaried individuals and pensioners by complex tax return format while exercising powers conferred u/s 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance).
The comments of the Secretary, Revenue Division, Member (Policy) and Member (Information & Technology) were requisitioned under the FTO Ordinance read with the Federal Ombudsmen Institutional Reforms Act, 2013.
In fact, Own Motion has been taken upon the issue of hardship created by the complex nature of online processes for tax filing forms many of which are redundant for the category of taxpayers of fixed income groups including salaried class and pensioners.
Therefore, it was found that the current mode of return filing facility provided by the FBR is suffering from neglect, inattention and inaptitude which is squarely covered under section 2(3)(ii) of the FTO Ordinance, 2000.
According to the findings of the FTO order, the statistical and descriptive analysis revealed that the present format of the tax return for salaried individuals is too complex for an ordinary individual to understand as the prescribed format contains many fields which are not relevant to a taxpayer whose only source of income is salary/pension.
While filing a return such a person has to unnecessarily go through all the fields to fill up the relevant fields. Besides, the so-called simplified form introduced through software wizard is also beyond the comprehension of an ordinary individual who is neither familiar with tax terminology and nor is he computer literate.
Therefore, there is a dire need to devise a separate salary return in simplified form or provide a separate window in Iris to facilitate about 1.4 million taxpayers.
The FBR’s current mode for filing tax returns caused hardships to salaried individuals and pensioners as the available tax return format was too complex for an average taxpayer to understand and fill out the tax return.
It was observed that out of more than 4.2 million taxpayers on the Active Taxpayer List, a large number of active filers fell in the category of fixed income group, being either salaried class or pensioners. Returns data analysis of this segment suggested that tax paid with the returns by a salaried individual was quite negligible because the tax was withheld at the time of payment of salary and that income of pensioners being exempt, the remaining source of income was mostly profit from different savings schemes and profit of debt on bank deposits.
It is evident that while tax is deducted at source from salaried individuals and by Banks & NSCs in the cases of pensioners, no further payment of tax is payable by the salaried individuals and pensioners at the time of filing return.
The FTO has directed Member (Policy) and Member (Information & Technology) to devise a new return form and also reopen a new window in the existing Iris for the salaried-only taxpayer within 30 days.
The FTO has also directed Member PR to widely publicize the said streamlined return filing facility for awareness through media and SMS for the salaried/pensioner class.
In order to provide a simplified version of returns it is, therefore, befitting to devise a separate tax return for salaried individuals having only minimum fields relevant to their source of income. It may be stated that such a return can be generated through Artificial Intelligence (Al) using historical data of tax returns available with PRAL/FBR in respect of persons having a source of income from Salary/Pension.
It may be further stated that as per data of returns for Tax Year 2022.
The number of filers who declared income from only salary stood at 1.3 million.
However, if pensioners may also be included the figure may safely cross 1.4 million filers who will be direct beneficiaries from the suggested simplified separate return.
In addition, many non-filers may be tempted to file tax returns by availing simplified version of tax return and in such a situation, FBR will be the direct beneficiary. Thus, this win-win situation will bring in dividends for all the stakeholders, FTO added.
A great step and decision to facilitate the pensioners. Our best wishes and prayers. It will make are lives easier
It is best effort for salried as well pensioners. Before this the form was complicated and just waste of time and also tedious.
Thanks for this good effort
Should it be circulated well in time i.e., before 30th Sept,2023 or FBR extend the date of filing for such category?
FBR is moving in a right direction.
A good step towards facilitating the salaried class.The existing form is complex and help of a Tax professional is required.The government should should always care for the welfare of salaried class.
Great job hurry up less you will forget to benefit the salarised class.its not income tax it’s salary tax pl change its name as well.
Asalaam Sir pls Jo hum grocery ke Bill MN ya restaurant MN bill pay karate wo BHI return Karen har month salary SE BHI deduction Hoti he r Bill MN BHI kolatoti Hoti he km SE km wo return hone chahye
Everytime new form is introduced similar claims are made. Always some lope hols are left to trap individuals. Proper purpose oriented quality checks should be carried before introducing a new form.
FBR, please GFYS
You’re nothing more than an accomplice in squeezing the salaried class dry and facilitating the criminals ruling this country
A simplified form as advocated in the said article is highly appreciated. Please make sure that the said new tax return form is really simplified so that an ordinary and averagely qualified person can easily fill it.
Definitely, it is going to broaden FBR tax network.
In deed it would be a good step towards easing the problem if filing. No extra details should be demanded in the new form as salary is a clear cut fixed amount
Let’s hope this time it’s actually “simple”
It is very good step for salarie & pensioners hope they can fill it himself easily
Let’s hope for the best . Although no better step is seen so far from FBR.
Where is new form in app or on google or FTo office provide reply
FTO has decided a big problem for salaries person and pensioners 1-4 million as on all cases deduction have been mades we need just to regularise the tax Name of all employee be added when tax due and their name be maintained in AT L and indl responsible to reqularize the same data be collected from NADRA
Alhamdolillah, after all they realized it. Now pensioners are mostly slow in their eyesight on screen and keyboard. This is a good step. It has come to my knowledge that even salaried persons have to give let us say 5k to an FBR accountant to fill and submit. This can open a way of rishwat by FBR employee who is not a registered legal adviser.
It is an excellent idea to initiate a modified format for salaried/pensioners.Simplification will entail good results.It will also help n increasing the base of filers..Good luck
very good effort
I have a suggestion that the new simplified form for pensioners should have a column to get back from FBR the’with holding’ tax paid by the pensioner during the financial year against different transactions,if the pensioner has no other income except pension.
I fully agree with this suggestion because majority of pensioners don’t have that sufficient an amount of tax payable even to offset the amount of withholding tax deducted at source on different transactions during the financial year.
Result is that their return has a negative balance which must be refunded by crediting bank account of the taxpayers automatically.