What Happens If You Don not File Your Tax Return? The most common question asked by the majority of the taxpayers. what will happen if we do not submit our tax returns? What will be the consequences of this? Will we not be fined? Will our account not be blocked by FBR? Will our bank accounts not be blocked? Will this happen to us?
This blog post provides you complete information that if you do not submit your tax returns or delay them for any reason, what can happen to you. And if submitted what benefits will you get?
Why should File My Income Tax Return
Every year in Pakistan, many people forget to submit their annual returns. The reason for this is either lack of awareness or a misconception that perhaps if we do not file returns, nothing will happen our data will not go to the FBR. But this is a completely wrong thinking. The FBR is constantly receiving your financial data. If you do not submit returns, you have to bear the consequences and losses.
Legal Requirement
First of all, it is important to understand that according to the section 114 of the Income Tax Ordinance 2001, if your income is taxable Whether you are a salary person, doing business or renting out property and you do not submitted returns, then it is a legal offense. You can be punished and fined for this.
Why should file my tax return when tax is already deducted
Some people also think that since our taxes is already being deducted from the salary or other payments there is no need to file returns. It is a big misconception
Tax deduction and filing returns are two separate matters
Even if taxes are being deducted, it is still important to file a return, as it is often the case that the tax withheld is more than your actual liability.
In addition, some tax credits can only be obtained after filing a return correctly.
What Happens If You Don not File Your Tax Return?
Extra tax:
If you are not a filer, you have to pay more taxes when withdrawing money from the bank, buying a vehicle or property.
Issuance of notices:
The FBR will issue you a notice and gives you time for filing. If you do not file the return within the stipulated time, the FBR will then again send you a show cause notice to explain your position.
Penalty:
Failure to file return and comply with show cause notices a fine of 20,000 can be imposed under section 182 of the Ordinance.
This penalty order is some time system-generated and can be avoided only by giving sufficient explanation.
SIM Blocking
Last year, the FBR had blocked the SIMs of those who did not file tax returns. This proved to be very difficult for them, although many people became filers only to save taxes on buying or selling property. But when they get the NTN, they do not know that after that they have to fulfil some legal obligations.
For Overseas Pakistanis
Overseas Pakistanis often ask whether we are required to file returns or not. The rule is that if you are a non-resident and have no income from Pakistan, then you are not required to submit returns. But If you have any income in Pakistan, such as business, rent or bank profits, then you must submit it.
Similarly, if you are registered with the FBR and have NTN then you are required to require to submit.
The only difference is that you only have to declare income earned from Pakistan. You do not need to declare income earned abroad.
Solution
The easiest solution is to file your annual return on time. The current last date for filing returns is September 30.
Filing your return on time will help you avoid additional taxes and penalties, your name will remain in the filer list, you will pay less tax on buying and selling a vehicle or property and it will be easier to get banking facilities.
If you know about What Happens If You Don not File Your Tax Return or tax return filing and other related please get in touch with us through our website by filling out the Contact Us form, or reach out via our social media accounts.
