Filing of income tax returns is not mandatory for persons including widows, orphans,s and disabled persons for sole reasons mentioned in the Income Tax Ordinance, 2001. In Pakistan, Section 115 of the Income Tax Ordinance, 2001 categorizes persons, who are not required to file income tax returns. The following persons are not required to furnish a return of income for a tax year solely by reasons provided in sub-clauses (iii), (iv), (v), and (vi) of clause (b) of sub-section (1) of section 114.
Income Tax Exemption in Pakistan
The persons are:
(a) A widow
(b) An orphan below the age of twenty-five years
(c) a disabled person; or
(d) in the case of ownership of immovable property, a non-resident person.
Now, let’s look at the sections one by one in detail. The sub-clause (iii), (iv),(v) and (vi) of clause (b) of sub-section (1) of section 114 are as under.
Sub-clause (iii)
A person who owns immovable property with a land area of 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 Capital Territory, Islamabad.
Sub-clause (iv)
A person who owns real estate property with a land area of five hundred square yards or more located in a rating area.
Sub-clause (v)
A person who owns a flat having a covered area of two thousand square feet or more located in a rating area.
Sub-clause (vi)
A person who owns a motor vehicle having an engine capacity above 1000 CC
Additionally, any person who is not obliged to furnish a return for a tax year because all the person’s income is subject to final taxation under sections 5, 6, 7, 148, 151, and 152, sub-section (3) of section 153, sections 154, 156 and 156A, sub-section (3) of section 233 or sub-section (3) of section 234A shall furnish to the Commissioner a statement showing such particulars relating to the person’s income for the withholding tax on property in Pakistan year in such form and verified in such manner as may be prescribed.
Income Tax Return
(4A), Any person who, having furnished a statement, discovers any omission or wrong statement therein, he may, without prejudice to any other liability which he may incur under this Ordinance, furnish a revised statement for that tax year, at any time within five years from the end of the financial year in which the original statement was furnished.
(5) Subject to sub-section
(6), the Commissioner may, by notice in writing, require any person who, he thinks, is required to file a prescribed statement under this section for a tax year but who has failed to do so, to furnish a prescribed statement for that year within thirty days from the date of service of such notice or such longer period as may be specified in such notice or as he may, allow.
(6) A notice under subsection (5) may be issued in respect of one or more of the last five completed tax years. Pakistan's Income Tax exemption policy and preferential favor towards widows, orphans, and disabled persons is, indeed, a laudable step in facilitating and serving the less privileged strata of society.
