Income tax law: FBR proposes new definition of word ‘banking’

ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a new definition of ‘banking’ under the proposed draft amendments in the Income Tax Ordinance, 2001 for simplification and harmonization of tax laws.

In this regard, the FBR proposed an amendment in section 2 (definitions) of the Income Tax Ordinance, 2001.

Under the proposed definition of “banking”, it means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw-able by cheque, draft, and order or otherwise, it added.

Over Rs50,000 cash withdrawals thru credit cards/ATMs: Non-filers to pay 0.6pc WHT: FBR

Sources said that the term of ‘banking’ has been repeatedly used in the income tax law and it needs to be properly defined in the Income Tax Ordinance 2001. This proposed draft amendments in the Income Tax Ordinance, 2001 has been issued for simplification and harmonization through the next Finance Bill, 2024.

The Federal Board of Revenue is currently engaged in exercise for simplification and harmonization of Inland Revenue’s Tax Statutes, i.e., Income Tax Ordinance, 2001; Sales Tax Act, 1990; Federal Excise Act, 2005; Islamabad Capital Territory (Tax on Services) Ordinance, 2001.

The simplification and harmonization of the procedures and processes under each of these statues with each other for uniformity and ease of implementation/ compliance for the tax collectors and the taxpayers is a key priority of FBR.

In this regard, proposed drafts of amendments in the aforesaid Inland Revenue Statutes are hereby published on the FBR website, inviting valuable feedback and comments of the general public and other stakeholders to be provided by Dec 31, 2023. Subsequently, after further deliberations with stakeholders, the proposals will be considered during the preparation of the Finance Bill 2024, FBR added.

Copyright Business Recorder, 2023