Got email of 114(4) (Notice to file Return?

[asad000003]

Tax return filing is very bad in Pakistan. Forms are very difficult to fill, so one has to hire some tax accountant (stranger) going through all your income and assets. Secondly, it is an annual process, so at the end of every year you will pay this person to help you file returns. You will need to provide all documents that show cash flowing in and out. As you are a freelancer, your income is not stable, so sometimes you have work and sometimes you don't but it wouldn't matter to FBR. You will have to file return even if you are jobless or you retire. Reality is that most tax filers are trapped and government is squeezing as much money out of them as possible. Everything in system is digitalise, so with your CNIC, they know who you are, where you live and your various property assets, bank accounts, etc. If you decide to take a break from filing returns, they can summon you for audit and even freeze your accounts. Had someone warned me before with proper guidance, I wouldn't have become a filer.

[mohsin.naseem]

1. how much consultant charge for this ?
   2 - I am getting foreign remmitance in bank so can i pay tax?

[xzap042]

The way you say it, you make it seem like trying to scare people away.
It's not a big job, if you have the required documents, it hardly takes 20-30 min. Let year I spent some time learning and did it myself despite no financial background or having any prior knowledge. Did same this year, took 10 min.

Regarding filer/non filer, I believe being filer is more advantageous specially for freelancer due to tax reduction in bank transfers.

[asad000003]

1. It varies for person to person. There are some consultants that charge PKR 3000/- while others who are more senior may charge PKR 10,000/-. Its hard to get hold of these people because during closing dates, they have so many clients that they have to attend to and if you pay them less, obviously they will give priority to their larger clients. From my personal experience there are 2 types of tax consultants. One who are accountants and understand financial requirements, the other are advocates who provide both legal and tax related services.

2. You don't have to pay anything additional for foreign remittance, tax is automatically deducted from bank. You simply have to file it. See, what FBR wants to know is how you are making money and where you are spending it. So, if you aren't making much in freelancing, yet you buy a car, it tells FBR that something doesn't add up. Either you are rich and evading tax or there is something odd. Your returns will explain, the money you got for the car was from your Dad who is a tax filer.

@xzap042 It is better if they know the truth. People who say they can fill out their own tax returns are "attay mein nimak barabar". I have a masters degree in business administration and close to 10 years experience in IT industry and even I can't work FBR's system. They constantly change their rules and forms. Being a filer is more disadvantage in Pakistan than any other place in the world. There are hardly any benefits. Audit process is extremely difficult and time consuming. If they make income tax forms easy to fill, then most of these accountants and tax advocates would be out of job. If you have paid more tax to government, then it is impossible to get reimbursement. Honestly, I wish they would offer existing tax filers a break. Anyone who is unemployed or retired shouldn't have to file their returns but it is not the case. We have to fork our savings to some consultant to let FBR know we are still alive.

[capsat]

if you scroll up post #20 has some numbers of professionals.

[capsat]

I have a masters degree in business administration and close to 10 years experience in IT industry and even I can't work FBR's system.

am 8th class runaway from school.
however started using computers, ms office since days of windows 3.1
any person with basic accounting skills can manage present online FBR Tax filing.

The work required to compile debit & credit is :

1. bank statement and an explanation for every inward / outward money transaction ( debit & credit )
2. details of receiver when a cross cheque is issued
3. expenses ( self maintenance, work place maintenance, bills payment etc etc )
4. personal expenditure details ( utility bills, household expenses, vehicle expenses, travelling etc etc )

in past 35 years as tax payer there has been nothing more simplified as tax returns since 2012,

have managed to gather up respectable wealth declaration which was hidden from GOP earlier.

[asad000003]

Capsat nothing is impossible for those who are experienced in this field. I am not pointing at individual cases, it has to do with everyone. I am sure 90% of people would file returns if FBR simply collects information from our banks, CNIC and verify it through our email/sms at end of the year. If we accept it, then its good to go and if we need to modify it, then they open the options. A single page form which is easy to follow would be ideal.

There should be option to see what information was passed on to FBR in previous 2 years, so all the changes can be seen gradually and you can easily edit/add any field.

[capsat]

@asad000003
there always is help available to learn.
choice is ours to be dependent or independent.
taxation is highly personal matter. Like a Woman's pregnancy. Lesser the people to know before bulge makes an announcement, just like that lesser the people to know our prosperity the better, before we buy a MayBach which can not be hidden.

Nothing personal but that is what i practice and believe about my taxes

[Einstein]

I agree with this. Earning and expense is a personal matter hence i do it myself too. Maybe not as detailed as you keeping all the expense receipts but still try to be as accurate as possible.

I believe free fields and then reconciled amount needing to be exactly zero before submission means that we can put in some values to the best of our knowledge as it is not possible to keep a record of every expense transaction down to the last rupee.

[sahirsani]

Okay so last year I filled my taxes for the first time, I am also a freelance software developer and 100 percent of my income comes as foreign remittance. And today I received this email from fbr, any advice/ideas?

My Dear Taxpayer,

The perusal of Tax Return filed for the Tax Year 2019 reveals that you have paid NIL tax despite the fact that you purchased properties/earned income, and/or were subjected to withholding taxes under various provisions of the ITO, 2001 of substantial value. Section 114 of the ITO, 2001 warrants every person to file correct income tax return for the relevant tax period having taxable income or meeting any of the other qualifications laid therein.

1. You are apprized that FBR already has the information about your incomes/assets as given in the table at the end.

2. You may log-in to https://iris.fbr.gov.pk/public/txpAILogin.xhtml to see if the information pertaining to your activities is correctly displayed. Kindly be advised that it is only partial information that FBR has gathered so far, and our data bank is continually being updated with more information being collected from various sources.

3. You are requested to file revised return of income by declaring the true particulars of your income and paying proper tax by December 15, 2020, or filing a valid explanation in support of your earlier tax declaration, failing which the penalty/prosecution proceedings under the relevant provisions of the ITO, 2001, will be initiated.

[moneebariffast]

Hi,
Sahirsani so any update on how you are replaying and any other there how to tackle it?

[Nabs]

Did you attach your accounts with the tax return? I attach my accounts along with PRCs in one PDF document before submitting return.

Although attaching accounts is not required, but its better to attach it in case of availing tax exemption.

If you think everything in fine, tax returns are correct and you have proof (PRCs). Then ignore this notice, as it could be automated based on spending vs tax paid without taking into account the tax exemptions. But since you're under the radar, be prepared to get audited in future, especially if you didn't attach tax exemption proof.

[moneebariffast]

I think it is best to replay otherwise they can do an audit. I will attach similar proof with replay.

[Nabs]

The notice may not have a reply option, but if it does, he should definitely reply with proof of tax exemption.

[moneebariffast]

I do not think they even see attachment or anything they just sending computrized notice.

[xzap042]

Has anyone claimed tax refund? I have a refund amount which I want to claim, what do I need to attach with application?

[capsat]

I have a refund amount which I want to claim,

refunds are only adjustable.
Only manufacturers exporters get the refund, salaried and business class can claim adjustments only.

[xzap042]

That's what I'm after, to get adjustment on my future tax liabilities.

[dms664]

R u salaried?

[capsat]

my future tax liabilities.

That can only happen if FBR has some policy to " CARRY FORWARD " excess paid / collected from business or the salaries. So FAR it is not practised by FBR @Nabs