There will be no change in Section 111 (un-explained assets or income) of the Income Tax Ordinance 2001 in budget (2012-13) and the existing government policy of not probing foreign remittances through banking channels will be followed. Sources told Business Recorder here on Saturday that the government does not want to change the existing scheme of Section 111(4) of the Income Tax Ordinance 2001.
The Section 111(4) of the Income Tax Ordinance, 2001 provides immunity from probe into any amount of foreign remittances sent to Pakistan through proper banking channels. The Federal Board of Revenue (FBR) has tried to propose amendments to Section 111(4) pertaining to the un-explained assets or income of the Ordinance 2001, but the policy makers are not ready to accept the same. Therefore, the FBR is not in a position to make any major amendment in the Section 111(4) of the Income Tax Ordinance 2001. "Yes there would be no change in Section 111(4)," sources emphasised. However, there might be slight procedural changes in other sub-sections of Section 111. No change would be made in section 111(4) in the coming budget," sources further said.
Earlier, the FBR had proposed an amendment in the Section 111 (un-explained assets or income) to document the un-disclosed and un-explained income and assets. The provision of Section 111 was amended by Finance Act 2010, so as to enable the commissioner to assess the un-disclosed or un-explained income of a person in the year to which the said income is related. This means that if the assets pertain to Tax Year 2003 the addition would be made to Tax Year 2003 only. The limitation provided in section 122 of the Income Tax Ordinance 2001 automatically barred the Commissioner to open the assessment prior to five years.
This means that asset of the earlier years ie beyond limitation could not be taxed by the tax authorities. It was proposed that the outer limit of five years be extended to ten years, so that the un-disclosed assets prior to Tax Year 2006 would also be brought in the ambit of Section 111 of the Income Tax Ordinance 2001. It was a measure to assess un-disclosed assets or income of the persons whether in the tax net or not, sources added.