The Federal Board of Revenue (FBR) has clarified that cash deposits made directly by buyers into a seller’s bank account will be treated as valid payments under the Income Tax Ordinance, 2001.
The clarification is in reference to the new clause (s) added to Section 21 of the Ordinance, that if a seller receives a payment of Rs. 200,000 or more on a single invoice and it is not made through a formal banking channel or digital means, 50 percent of the related business expenditure will be disallowed for tax purposes.
The FBR has now confirmed that such disallowance will not apply where the buyer makes a direct cash deposit into the seller’s bank account. These deposits will be treated as valid payments through the banking system.
The FBR stated that the clarification aims to support the transition to a formal economy while acknowledging that bank cash deposits remain a legitimate financial transaction method.
Can you explain in terms everyone can understand
English seekhlo jahil. It’s written as clear as daylight.
In simple terms it mean lets say you are a seller and you sold goods worth of 3 lakhs a year. When you are doing your taxes you told FBR that it costs 2 lakhs in the procurement of the goods then FBR will only taxes you of the remaining 1 lakhs profit, now if you according to this new ordinance recieve payment through informal channels like hand-on cash you will get 50 percent disallowance penality meaning FBR will count your profit now 2 lakhs not 1 lakhs and will tax you according to it.
Cash is king.
It means that You can pay or receive big amounts by depositing cash into a bank account — without any tax issues.
Just don’t deal hand-to-hand in cash for large payments. Use the bank — even if it’s cash.
Is ko khud Samaj nahen Aya. Bus copy paste kardiya news ko.
Mujhe Karni
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Government will take my banana 🍌
I will smash the worst government
What about if a business deposit cash in his own account ?
Sounds great indeed….
Please share if any circular issued.