On Saturday, officials said the Federal Board of Revenue (FBR) had directed for issuance of Income Tax Exemption Certificate to Provident / Gratuity Funds after Inland Revenue offices had verified genuine applications for taxpayer convenience.
Inland Revenue service sources said that the FBR has issued a directive in response to taxpayers’ complaints that tax offices are refusing to grant income tax exemptions against gratuity and provident funds. According to officials, the FBR is deeply concerned about the treatment of exemption certificate applications by some field formations under section 159/150/151 of the Income Tax Ordinance 2001.
The FBR said that the taxpayers had pointed out the exemption given to the funds before the tax year 2013, due to which the tax offices were not allowing their applications. In addition, the tax authorities asked taxpayers to submit fresh applications for approval that the fact of their approval was not available / clear in the FBR’s IRIS system.
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The FBR said that applications for exemption from recognized provident / gratuity funds could not be denied. Therefore, the Revenue Authority directed the tax offices to process all the provident / gratuity exemption certificate applications. Funds providing proof of identity under the relevant rules. Framed under the Income Tax Ordinance, 1979 Act enacted under the Income Tax Ordinance, 2001.
“Further, asking for fresh applications for recognition. Merely on the pretext that such recognition is not available on the system is not a valid excuse,”
FBR Directed
“Mere issuance of exemption certificate under section 159 of the Income Tax Ordinance, 2001 does not foreclose. The possibility of reviewing/recalling such action in case it is later on discovered. That the taxpayer produced some incorrect/invalid or wrong evidence for obtaining the favour”.
FBR Cautioned the tax offices
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