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FBR amends Income Tax Rules 2002

FBR amends Income Tax Rules 2002

ISLAMABAD: Federal Board of Revenue (FBR) issued draft rules for making recovery from persons holding money on behalf of taxpayers.

The FBR amended Income Tax Rules, 2002 and introduced new rules related to “Recovery of Tax from Persons Holding Money on Behalf of a Taxpayer.”

Under these draft rules, the FBR authorities can recover from employer (who may owe salary to its employee), a tenant (owing or who may owe rent to its landlord), or a debtor owing or who owe money to the taxpayer. Further, the recovery may be made from ‘holding or who may hold’ includes bank accounts or TDRs/CDRs, fixed deposits.

As per the rules, a person shall remit or send the money to the Commissioner through pay order or demand draft or through banking transfer or cheque for payment to the government treasury on the same day the notice is served, or, in case the money is to become due for payment to the defaulter at a future date, on the same day it becomes due.

“Provided that where the person is liable to make a series of payments to the taxpayer, the commissioner may specify the amount to be paid out of each payment until tax due has been paid.”

It said that the recovery of tax shall be made only to the extent of tax due by taxpayer; provided that in case the money is held jointly with any person other than the defaulter, the shares of the joint-holders in such account shall be presumed, until the contrary is proved, to be equal.

The FBR said that every person to whom a notice is issued shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or other document to be produced for the purpose of any entry, endorsement, or the like being made before payment is made, notwithstanding any rules, practice or requirement to the contrary.

Where a person fails to comply with a notice, the person shall personally be liable to pay the amount to the commissioner who may pass an order to that effect and seek to recover the same.