Doctors, service providers, chain stores likely to be selected: FBR finalising parameters for audit

There is a strong possibility to select doctors, professionals, service providers, chain stores, shopping malls and big departmental stores for audit under section 177 of the Income Tax Ordinance 2001. Sources told Business Recorder on Wednesday that the FBR is in the process of finalising parameters under section 177 of the Income Tax Ordinance 2001 for carrying out audit of income tax returns filed this year.
A committee comprising Director General, Large Taxpayer Unit (LTU), Karachi, Regional Tax Office (RTO), Lahore and others are reviewing the criteria for selection of cases for audit in consultation with the FBR Direct Taxes Wing.
Sources said that the big chain stores have daily turnover of millions of rupees, but they are depositing meagre amount of tax. Such type of cases might be selected for audit under the 'class of business' category.
The criteria for selection of cases for audit under section 177 have not yet been finalised. It is under examination to select cases of professional service providers, advocates/doctors, big chain stores/shopping malls, etc, for audit under section 177 of the Ordinance 2001.
Sources said that the section 177 has given ample powers to the commissioners for selection of cases on the basis of parameters set by the Board. Once the criteria for audit is finalised, it would be communicated to the field formation for compliance.
In addition to the selection criteria, the commissioner may also select a person for audit of a person's income tax affairs. The commissioner can also take up any other matter which in the opinion of commissioner is material for determination of correct income. The Board had decided to resume audit under section 177 of the Income Tax Ordinance 2001 with a well-defined and clear criteria. For this purpose, a strict monitoring mechanism and transparent policy for selection of cases for audit is being formulated. The audit would be carried out without causing any undue harassment to taxpayers.