Amending tax return for bonus applicability: FBR receives suggestions from CA firms

The Federal Board of Revenue has received suggestions from leading chartered accountant firms to amend the income tax return for the Tax Year 2010 to allow salaried taxpayers for declaring bonus, which would be taxed at applicable slab rate for salary. It is learnt here on Tuesday that the FBR has received presentations from CA firms on the issues relating to the income tax returns.
According to the chartered accountant firms, the form of return available on web-portal, inter-alia provide a tax rate of 30 percent for the bonus, in terms of proviso to sub-section (2) of section 12 of the Income Tax Ordinance, 2001. Finance Act 2009 had earlier levied Internally Displaced Persons (IDPs) Tax ie IDPT @ 30 percent on bonus. The Sindh High Court has however recently declared the IDPT on bonus as unconstitutional/null and void; thus bonus as per present legal position is taxable at applicable slab rate. The form of return therefore needs to be amended to enable taxpayer to file return of income and declare 'bonus, taxable at applicable rate for salary and not 30 percent.
The FBR has further received presentation that the individuals having salary income of Rs 500,000 or more for Tax Year 2010 are required to electronically file the return of income.
It is to be noted that web-portal has recently started to accept return of income. Therefore, a very short time was available to upload the income return on web-portal and particularly due to Ramazan it is very difficult to meet the deadline. It is, therefore, requested to kindly extend the date of filing return of income, at least for a month.
Tax experts further said that the withholding agents are now required to file quarterly statements. Sub-section (1) of section 165 of the Ordinance provides that a person 'collecting' tax shall file the statement on prescribed form. Such person is required to file the statement even if during the period no withholding is paid, by virtue of newly inserted proviso to sub-section (1) of section 165. In our view, a non-resident taxpayer who is merely earning dividend income, royalty or fee for technical services and not making any payment or deducting tax in Pakistan during the year is not required to file quarterly statement. In our view, filing of quarterly statement in such case would not serve any practical purpose. Further it would also unnecessary increase 'load' on the web-portal.
The FBR should confirm CA firms' understanding that withholding statement is not required to be filed by a non-resident person who has no presence in Pakistan in any form and has not made any payment or tax deduction during the year.