Employers should file annual withholding tax statements by August 31: FBR

The Federal Board of Revenue (FBR) has observed that the employers would be required to file annual withholding tax statements by August 31, 2010 under section 118 of Income Tax Ordinance 2001. According to an income tax circular 12 of 2010 issued on Wednesday, an amendment had been made in the provision of section 165 of Income Tax Ordinance 2001, whereby the requirement of filing of annual statement of deduction of withholding taxes has been done away with.
Resultantly, annual withholding tax statements are no more required to be filed. Although this has been clarified through circular 11 of 2010, still it appears that certain ambiguity exists about the requirement of filing of annual withholding statements of deduction of tax from salary by the employers.
It is, therefore, once again, clarified that under the provisions of section 118 of Income Tax Ordinance, it has been laid down that annual statement of deduction of tax from salaried persons having salaried income less than Rs 500,000 per annum filed on or before August 31, next following the end of tax year to which the annual statement filed by employer relates, shall be deemed to be return of income. It is therefore, required that annual withholding tax statements by the employers may be filed by August 31, 2010, the FBR circular added.