The Federal Board of Revenue (FBR) has started legal proceedings against two famous players of Pakistan cricket team from Lahore for recovery of income tax under the Income Tax Ordinance 2001. Sources told Business Recorder here on Thursday that the Regional Tax Office-II (RTO) Lahore has issued notices to these two top players under section 122 (5) A of the Income Tax Ordinance 2001.
The players have treated their tax payments on services as final discharge of tax liability under section 153 of the Income Tax Ordinance. However, as per law the 6 percent tax under section 153 of the Income Tax Ordinance 2001 is minimum tax and they have to pay tax on relevant rate of the First Schedule of the Income Tax Ordinance 2001. The income of the players would be assessed on actual profits and losses being declared in their income tax returns. Their income on services provided would not be treated as final discharge of tax liability under section 153 (1) (b) of the Income Tax Ordinance 2001.
According to sources, payments received by these top players under the contract with the Pakistan Cricket Board are to be treated as income from services rendered under section 153 (1) (b) of the Income Tax Ordinance 2001 so as to levy tax under normal law at the prescribed rates. In this connection, the concerned RTO has served notices to these cricketers here on Thursday.
The players are providing services under the contract and liable to tax as per provisions of the section 153 (1) (b) of the Income Tax Ordinance 2001. It has been further learnt that one of the famous cricketers' tax liability has been assessed at Rs 40 lakh and recovery notice has been served on him.
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