FBR allows banks to deposit collection by July 31

MUHAMMAD ALI

KARACHI: The Federal Board of Revenue (FBR) has accepted banks’ request to deposit the payment of advance tax deducted under section 236P of Income Tax Ordinance 2001 by July 31, 2015.

According to sources, after the insertion of section 236P in Income Tax Ordinance 2001, the financial institutions are required to collect advance adjustable tax from a non-filer at the time of sale of any instrument, including demand draft, pay order, special deposit receipt, cash deposit receipt, short term deposit receipt, call deposit receipt, rupee traveller’s cheque or any other instrument of such nature from July 1, 2015 at the rate of 0.6 per cent.

They said that this tax was also applicable on a non-filer at the time of transfer of any sum through cheque or clearing, interbank or intra bank transfers through cheques, online transfer, telegraphic transfer, mail transfer, direct debit, payments through internet, payments through mobile phones, account to account funds transfer, third party account to account funds transfers, real time account to account funds transfer, real time third party account to account fund transfer, automated teller machine (ATM) transfers, or any other mode of electronic or paper based funds transfer.

Moreover, sources said that bankers had conveyed their grievances to chairman FBR Tariq Bajwa during meeting at Karachi last Thursday and requested him to allow three months period to update their systems in accordance with the newly inserted section 236P of Income Tax Ordinance 2001.

Sources further said that chairman FBR in response to the request directed Shahid Hussain Asad, member tax policy and Amjad Hussain, chief tax policy to convene meeting with the bankers on July 6, 2015 in Karachi. Consequently, a meeting was held at Large Taxpayers Unit (LTU) Karachi to resolve grievances expressed by the bankers.

Talking to Business Recorder, Shahid Hussain Asad member tax policy said that no bank had objection to collect advance tax under section 236P of the Act as it was only applicable on non-filers.

Replying to a question, he said that banks did not forward any request for three-month amnesty to collect the said levy during meeting. However, the bankers have made a demand to allow banks to deposit the collection of advance adjustable tax by July 31, 2015.

He said that board had no issue to oblige banks’ request but it was only for July and added that banks from next month were required to deposit the collection of said levy on same day in case of government departments and within a week, if the same was collected from non-government organizations.