Individuals, AOPs tax return forms: Taxpayers need to fill only relevant annexure

The taxpayers falling under the category of individuals and Association of Persons (AOPs) have to only fill the relevant Annexure of the income tax return form for Tax Year 2013. It is learnt that Regional Tax Office (RTO) Lahore has facilitated the taxpayers by clarifying all Annexure of the income tax returns form to ensure early filing of returns.
Responding to various queries of the taxpayers, officials of the RTO Lahore have explained the rationale behind filling each Annex attached to the return form. Explaining the income tax returns form, tax expert told Business Recorder here on Monday that filing of all Annexure of the income tax return form is not mandatory for the taxpayers. However, the pages 1 and 2 of the return are mandatory to be filed as the relevant columns provides basic information about identification of the taxpayer, brief business profile and particulars of business in terms of sales, expenses, heads of income, etc.
As regards page 2/2 related to presumptive tax regime (PTR) portion, if the taxpayer has any PTR income to declare only then he would fill the relevant column otherwise he would simply affix his signatures at the end of page 2. Annex-A related to depreciation/initial allowance etc, is again optional and will be filled only if the taxpayer has "eligible depreciable asset" under his ownership.
Sources said that the Annex-B is related to tax payments and adjustments. If the taxpayer does not have any presumptive tax regime (PTR) income, then the main columns to be filled are No 21 ie motor vehicle token tax, No 22, ie, tax deducted on electricity bills and No 23, ie, tax deducted on mobile phone bills. Besides, credit for instalments for advance tax and adjustments is also required to be filled in this annexure which goes to the favour of the taxpayer to fill in all such columns of annexure-B correctly. Annex-C is again optional as it gives break up of sales if the taxpayer has multiple businesses. In ordinary course wherein the taxpayer usually conducts only one business, this annexure is not required to be filled in, they said.
Annex-D is compulsory as it gives a detail of personal expenses in case of individuals, ie, in terms of utilities, education expenses of children, travelling, personal and household expenses etc. This data gives an idea of taxpayers' standard of living and must be filled in. Annex-E is again optional as it provides detail of deductions (admissible/inadmissible) which are technical cases. Normally disallowances under section 21 of the Income Tax Ordinance 2001 are usually made in company cases warranting specific legal additions. This is not done much in individual cases.
Annex-F provides a bifurcation of PTR and normal business regime as per rule-13 of the I Tax Rule, 2002 read with section 67 of the Ordinance. This again is attracted only in those cases where the individual has PTR income attributable towards imports, exports etc.
They further explained that the Annex-G is mandatory as it provides break-up of those expenses which are mentioned in page 1 of the return and if the taxpayer has one business only, this annexure is not at all difficult to fill in as it contains trading and P&L expenses only.
Annex-H &J are not at all relevant to normal individual cases as they require specific heads of business in terms of PTR etc especially Annex-J provides application of clauses (41A) and (41AA) inserted in Part-IV of 2nd Schedule (inserted by Finance Act, 2012) wherein the individuals dealing with exports and imports, attracting final discharge of liability, have been given an option to be assessed under normal law. This is hardly applicable in cases of normal individual businesses. It is further mentioned that vide SRO 978(I)/2013 dated 13.11.2013, clauses (82) & (83) have been inserted in part-IV of 2nd Schedule to the Ordinance wherein the individuals having assessed or declared income below Rs 1 million and FTR tax paid less than Rs 35,000 are now not required to file wealth statement along with the return. This latest amendment/instruction of the FBR needs to be noted by the taxpayers, experts added.