Flood levy would cover entire period of 2010-11

The 10 percent income tax surcharge would be applicable in the first half (July-December) of current fiscal year, as the flood surcharge would cover entire period of 2010-11. Sources told Business Recorder on Friday that the 10 percent flood surcharge would be applicable for whole fiscal year ie 2010-11. This is a wrong perception that the surcharge would only cover period of January-June 2010-11.
The surcharge would be paid along with the income tax returns and statements to be filed for the Tax Year 2011. At the time of filing of income tax returns for Tax Year 2011, the surcharge would be paid for the whole fiscal. It is not correct that the surcharge is limited to second quarter (January-June) 2010-11, but it would cover first six months of the current fiscal as well.
In case of non-compliance, the tax department is legally empowered to issue notices to the non-filers of returns for collection of the due amount of flood surcharge.
For example, if a salaried taxpayer has paid flood surcharge on monthly basis from January to June period of 2011, he would pay 10 percent surcharge of the tax payable at the time of filing of income tax returns for the Tax Year 2011. However, the period of July-December 2010-11 is not exempted from payment of 10 percent flood surcharge. The burden of surcharge would be reduced at the time of filing of returns as the salaried person would make payments for January-June period during current fiscal.
Similarly, if an importer has cleared a consignment during July-December 2010-11, the surcharge would be applicable on filing of statement for Tax Year 2011. The importer would pay the surcharge on the consignments imported during first half of 2010-11.
According to sources, the five months of current fiscal have already passed and it is not possible to collect surcharge on already paid tax. However, the surcharge relating to this period would be paid at the time of filing returns for Tax year 2011.
Official said that the impact of surcharge on salaried persons is very nominal because it is only 10 percent of the tax payable during 2010-11.