The Federal Board of Revenue on Monday notified a simplified income tax return form for companies (Tax Year 2012) by creating separate annexure like Annex- E1, Annex- F1, Annex- G1, Annex- H1, Annex- J1, Annex- K1 and Annex- L1. In this connection, the FBR issued an SRO.848(I)/2012 here on Monday.
Earlier, the FBR has circulated the draft of the income tax return form (Tax Year 2012) for the stakeholders seeking their comments through SRO752(I)/2012 dated June 19, 2012. Now, the FBR has notified the return form incorporating viable suggestions of the stakeholders.
A separate IT-4 return form has also been notified for retailers (Individuals & AOPs) having annual turnover of up to Rs 5 million but not having any other taxable source of income. The retailers' statement has been notified under section 115(4) of the Income Tax Ordinance 2001.
Sources said the major advantage of simplifying main page of return will be to the small and medium companies with limited transactions/scope of business. They will comfortably complete the income tax return because in the electronic filing system of the FBR, the respective annexures are filled by the companies only when they conduct transaction of that particular nature. Now, the companies will only fill the relevant annexures saving their time by submitting a simple return form.
The FBR has introduced a couple of new annexures in the company's return such as Annex- E1, Annex- F1, Annex- G1, Annex- H1, Annex- J1, Annex- K1 and Annex- L1. The new annexures in the proposed return of income tax for companies are Annex F-1 (foreign income); Annex G-1 (income/loss from other sources; Annex J-1 (transactions with non residents to be field by taxpayers whose transactions, in aggregate, with non-residents are more than Rs 50 million during the tax year); Annex K-1 (bifurcation of Income/(Loss) from business attributable to sales/receipts etc subject to Final Taxation) and Annex L-1 (admissible/inadmissible deduction and adjustments).
The admissible/inadmissible deduction and adjustments were earlier part of the main page of the income tax return. Through a separate annex, further details have been sought from the companies. Sources said that those companies who will conduct any transactions with associates/non-residents for an aggregate amount of Rs 50 million and above and will complete annexure J-1 by providing the particulars of each non-resident company showing the value of transaction taking place. The separate Annex J-1 would effectively tackle the issue of transfer pricing by seeking necessary information from companies.
Similarly, Annex G-1 (income/loss from other sources) was part of the main return and now a separate annex has been introduced to obtain break-up of various heads, sources added. A tax expert opined that a new Annex-J1 has been introduced for the first time in the history of corporate taxpayers' income tax return. Under the new Annex-J1, transactions with non-residents has been asked to be reported in income tax return with the exclusion it is to be filled by corporate taxpayers whose transactions, in aggregate, with non-residents are more than Rs 50,000,000 during the tax year.
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