Tax adjustments possible through employers as well?

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SOURCEBusiness Recorder
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The employees including salaried class must take tax adjustment from their employers instead of waiting for refunds from the Federal Board of Revenue (FBR). Imtiaz Ahmad Khan, IT Expert and former general manager of Pakistan Revenue Automation Limited (PRAL)-FBR explained that the employees should avail the benefits already available to them under Income Tax Ordinance 2001. The employees can easily get their adjustments from their employers and no need for waiting for refunds. The employees are entitled to tax adjustments from their employers under the law.

Under the section 149 of Income Tax Ordinance 2001, income tax in respect of an employee is required to be deducted by the persons responsible for paying salary to an employee after making adjustment of tax withheld from employees under other heads and tax credit admissible under sections 61, 62, 63 and 64 during the year after obtaining documentary evidence.

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Most of the persons responsible for paying salary to employees deduct the income tax under section 149 of the Income Tax Ordinance but do not make ta’x adjustment of tax withheld from employees under other heads because of the fact that the employees do not submit the adjustment claims to their employers. Whereas ta’x under various heads is withheld from the employees by various agencies like banks, motor vehicle registration authorities, telecommunication companies, electricity distribution companies, insurance companies, educational institutions, property registration/transferring authorities, airlines, etc. which are adjustable and the employees can get this adjustment from their employers before release of salary for the month of June for the ta’x year 2019.

Adjustable taxes withheld by various agencies under the income ta’x’ ordinance 2001 are as under:

All employees of Federal Govt., Provincial Govt., Autonomous Bodies, Private Sector organizations, etc. can avail this golden opportunity of getting ta’x adjustment from their employers by submitting relevant evidences of ta’x deductions, meaning thereby that they will not have to wait for refund from FBR if they take this adjustment from the ta’x deductible from their salary during the month of June. Moreover, if any excessive amount is withheld by the employer during the year they can take that adjustment in the month of June as well. Employees should contact their employers immediately well before processing of pay roll for June-2019 so that ta’x adjustment is made by the employers in a timely manner. For the sake of convenience and ready reference the IT-3 Form (Declaration by Salaried Persons – To be Submitted to the Employer by the Employee) has been notified by FBR, Imtiaz Ahmad Khan added.

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Sr.   Description                                        Section

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1     Withdrawal from Pension Fund                          156B

2     Cash Withdrawal from Bank                             231A

3     Certain Banking Transactions                         231AA

4     Motor Vehicle Registration Fee                     231B(1)

5     Motor Vehicle Transfer Fee                         231B(2)

6     Motor Vehicle Sale                                 231B(3)

7     Motor Vehicle Leasing                             231B(1A)

8     Private Vehicle Tax                                    234

9     Electricity Bill of Domestic Consumer                 235A

10    Telephone Bill                                   236(1)(a)

11    Cellphone Bill                                   236(1)(a)

12    Prepaid Telephone Card                           236(1)(b)

13    Phone Unit                                       236(1)(c)

14    Internet Bill                                    236(1)(d)

15    Prepaid Internet Card                            236(1)(e)

16    Domestic Air Ticket Charges                           236B

17    Sale/Transfer of Immovable Property                   236C

18    Functions/Gatherings Charges                          236D

19    Educational Institution Fee                           236I

20    Purchase/Transfer of Immovable Property               236K

21    Purchase of International Air Ticket                  236L

22    Banking transactions otherwise than through cash      236P

23    Education related expenses remitted abroad            236R

24    Advance tax on general insurance premium              236U

25    Advance tax on life insurance premium                 236U

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(This news/article originally appeared in Business Recorder on June 10th, 2019)

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