Income Tax Ordinance, 2001 — Section 114: Return of income

114. Return of income. — (1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:– Chapter X – Procedure 1[(b) any person not covered by clause 2[(a), (ab), (ac) or (ad)] who,

(i)has been charged to tax in respect of any of the two preceding tax years;

(ii)claims a loss carried forward under this Ordinance for a tax year;

(iii)owns immovable property with a land area of 3[five hundred] square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory4[;] ] 5[(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;] 6[(v) owns a flat having covered area of two thousand square feet or more located in a rating area;] 7[(vi) owns a motor vehicle having engine capacity above 1000 CC; 8[ ] ] 9[(vii) has obtained National Tax Number10[; or] ] 1 Clause (b) substituted by the Finance Act, 2005. The substituted clause (b) read as follows:

(b)any person not covered by clause (a) or (ab) who –

(i)has been charged to tax in respect of any of the four preceding tax years;

(ii)claims a loss carried forward under this Ordinance for a tax year;

(iii)owns immovable property, with a land area of two hundred and fifty square yards or more, located in areas falling in the limits of a Metropolitan/Municipal Corporation, a Cantonment Board, or the Islamabad Capital Territory or owns any flat;

(iv)owns a motor vehicle (other than a motor cycle) in Pakistan;

(v)subscribes for a telephone including a mobile phone in Pakistan;

(vi)has undertaken foreign travel in the tax year other than travel by a non-resident person or any travel for the purposes of the Haj, Umrah, or Ziarat; or

(vii)is member of a club where the monthly subscription exceeds five hundred rupees or the admission fee exceeds twenty-five thousand rupees. 2 The letters and word “(a) or (ab)” substituted by the Finance Act, 2006. 3 The words “two hundred and fifty” substituted by “five hundred” through Finance Act, 2019. 4 Full stop substituted by the Finance Act, 2009. 5 Inserted by the Finance Act, 2009. 6 Inserted by the Finance Act, 2009. 7 Inserted by the Finance Act, 2009. 8 The word “and” omitted by the Finance Act, 2011. 9 Inserted by the Finance Act, 2009. 10 Full stop substituted by the Finance Act, 2011. 224 Chapter X – Procedure 1[(viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees 2[five hundred thousand] 3[; 4[ ] ] 5[(ix) is 6[a resident person] registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan 7[; or] 8[(x) 9[is a] resident person being an individual required to file foreign income and assets statement under section 116A.] 10[(c) persons or classes of persons notified by the Board with the approval of the Minister in-charge.] Every individual whose income under the head ‘Income from 11[(1A) business’ exceeds rupees three hundred thousand but does not exceed rupees 12[four hundred thousand] in a tax year is also required to furnish return of income from the tax year.] Chapter X – Procedure

(a)shall be in the prescribed form and shall be accompanied by such annexures, statements or documents as may be prescribed 1[: Provided that the Board may prescribe different returns for different classes of income or persons including persons subject to final taxation;]

(b)shall fully state all the relevant particulars or information as specified in the form of return, including a declaration of the records kept by the taxpayer; 2[ ]

(c)shall be signed by the person, being an individual, or the person’s representative where section 172 applies 3[;] ] 4[(d) shall be accompanied with evidence of payment of due tax as per return of income; 5[ ] Chapter X – Procedure

(a)the person has died;

(b)the person has become bankrupt or gone into liquidation;

(c)the person is about to leave Pakistan permanently; 1[ ]

(e)the Commissioner otherwise considers it appropriate to require such a return to be furnished.

(4)Subject to sub-section (5), the Commissioner may, by notice in writing, require any person who, in the Commissioner’s opinion, is required to file a return of income under this section for a tax year 2[or assessment year] but who has failed to do so to furnish a return of income for that year within thirty days from the date of service of such notice or such longer 3[or shorter] period as may be specified in such notice or as the Commissioner may allow.

(5)A notice under sub-section (4) may be issued 4[in respect of one or more] [of the] last five completed tax years 6[or assessment years] 7[:] 5 Chapter X – Procedure 1[(6) Subject to sub-section (6A), any person who, having furnished a return, discovers any omission or wrong statement therein, may file revised return subject to the following conditions, namely:

(a)it is accompanied by the revised accounts or revised audited accounts, as the case may be [:] 2[ ] 3[Provided that Commissioner may waive this condition if the Commissioner is satisfied that filing of revised accounts or audited accounts is not necessary;]

(b)the reasons for revision of return, in writing, duly signed, by the taxpayers are filed with the return4[; 5[ ] ] 6[(ba) it is accompanied by approval of the Commissioner in writing for revision of return; and] 7[(c) taxable income declared is not less than and loss declared is not more than income or loss, as the case may be, determined by an order issued under sections 121, 122, 122A, 8[ ] 129, 132, 133 or 221: Provided that if any of the above conditions is not fulfilled, the return furnished shall be treated as an invalid return as if it had not been furnished] 9[:] Chapter X – Procedure 1[Providedfurther that the condition specified in clause (ba) shall not apply if revised return is filed within sixty days of filing of return: Provided also that where the Commissioner has not made an order of approval in writing, for revision of return, before the expiration of sixty days from the date when the revision of return was sought, the approval required under clause (ba) shall be deemed to have been granted by the Commissioner, and condition specified in clause (ba) shall not apply: 2[Provided also that condition specified in clause (ba) shall not apply and the approval required thereunder shall be deemed to have been granted by the Commissioner, if

(a)the Commissioner has not made an order of approval in writing, for revision of return, before the expiration of sixty days from the date when the revision of return was sought; or

(b)taxable income declared is more than or the loss declared is less than the income or loss, as the case may be, determined under section 120] 3[: “Provided also that the Commissioner shall grant approval in case of a bonafide omission or wrong statement.] Chapter X – Procedure Provided further that in case the taxpayer 1[revises] the return after the issuance of a show cause notice under sub-section (9) of section 122, he shall deposit the amount of tax sought to be evaded, default surcharge and fifty per cent of the leviable penalties under the Ordinance along with the revised return and thereafter, the show cause notice shall stand abated.]

(7)Every return purporting to be made or signed by, or on behalf of a person shall be treated as having been duly made by the person or with the person’s authority until the person proves the contrary. 2[ ] 3[114A.Business bank account.— (1) Every taxpayer shall declare to the Commissioner the bank account utilized by the taxpayer for business transactions.

(2)Business bank account shall be declared through original or modified registration form prescribed under section 181.] 1 The words “wishes to revise” substituted by the Finance Act, 2011. 2 New section 114A added through Finance Act, 2020 dated 30th June, 2020 3 Section 114A substituted by the Finance Act, 2021. The substituted section read as follows: “114A. Taxpayer’s profile.-(1) Subject to this Ordinance, the following persons shall furnish a profile, namely:

(a)every person applying for registration under section 181;

(b)every person deriving income chargeable to tax under the head, “Income from business”;

(c)every person whose income is subject to final taxation;

(d)any non-profit organization as defined in clause (36) of section 2;

(e)any trust or welfare institution; or

(f)any other person prescribed by the Board.

(2)A taxpayer’s profile

(a)shall be in the prescribed form and shall be accompanied by such annexures, statements or documents as may be prescribed;

(b)shall fully state, in the specified form and manner, the relevant particulars of –

(i)bank accounts;

(ii)utility connections;

(iii)business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer;

(iv)types of businesses; and

(v)such other information as may be prescribed;

(c)shall be signed by the person being an individual, or the person’s representative where section 172 applies; and

(d)shall be filed electronically on the web prescribed by the Board.

(3)A taxpayer’s profile shall be furnished,

(a)on or before the 31st day of December, 2020 in case of a person registered under section 181 before the 30th day of September, 2020; and

(b)within ninety days registration in case of a person not registered under section 181 before the 30th day of September, 2020.

(4)A taxpayer’s profile shall be updated within ninety days of change in any of the relevant particulars of information as mentioned in clause (b) of sub-section (2).] 230 Chapter X – Procedure