WEDNESDAY JULY 27: Plan to obtain data from banks: FBR to introduce major amendment in IT 'circular 13'

ISLAMABAD: The Federal Board of Revenue (FBR) is planning to introduce a major amendment, removing restrictions from the income tax law for obtaining information about the accountholders from the banks without interference of bank officials, who quoted FBR's income tax circular for not providing details of the accounts. Sources told Business Recorder here on Tuesday that the FBR has in principle agreed to amend the income tax circular 13 of 1991 dated June 30, 1991.
The FBR had placed restriction on itself as per circular 13 of 1991 for not asking about the accounts and names of receipts of interest or profit from banks. Due to this restriction, bank officials frequently quoted income tax circular 13 of 1991 for not providing the requisite information about the accountholders. Under the income tax circular 13 of 1991, the FBR has itself empowered the banks to not disclose necessary information about the accounts to the tax department. This restriction would be removed from the income tax law to avoid legal objections raised by the banks.
The bank officials ask the FBR to give the computerised national identity card numbers (CNICs) and account numbers about the individuals and companies registration numbers in case of corporate sector for providing information to the tax department. Following amendment in the income tax circular, the FBR will not be required to give account numbers to the banks for obtaining information and only CNICs would be sufficient in this regard. The condition of account number would not be mandatory for the FBR seeking information about the accountholders from banks.
The FBR would amend the Para (8) of Circular No 13 of 1991. It says as, "The banks shall not be required to disclose the accounts and names of recipients of interest or profit. However, the banks shall continue to provide information under section 144 of the Income Tax Ordinance, 1979 in respect of particular bank accounts to which the commissioner of Income Tax or the Central Board of Revenue gives permission to any of the Income Tax authorities mentioned therein", it added.
In the Para (8) of Circular No 13 of 1991, the FBR will omit the words, "the banks shall not be required to disclose the accounts and names of recipients of interest or profit". Resultantly, the restriction of the FBR would be removed through amendment in the income tax circular, sources added.