Beware! Hefty Fines Await for Not Complying with New Income Tax Laws

The Finance Act 2024 outlines various penalties for failing to comply with Pakistan's income tax regulations. Here's a breakdown of some key offenses and their corresponding fines:

Late Filing of Tax Returns (Section 182)

• Penalty for not submitting your income tax return on time:
• Higher of: 0.1% of your tax liability for each day you're late (ouch!) A flat Rs. 1,000 per day of delay
• Minimum penalty: Rs. 10,000 for individuals Rs. 50,000 for businesses and other entities

Unregistered Traders and Shopkeepers

• Not registering your business or failing to pay advance tax as required: Shop closure: First offense: Seal for 7 days Subsequent offenses: Seal for 21 days

Ignoring Income Tax General Orders

• Failing to follow income tax guidelines issued by the Federal Board of Revenue (FBR) within 15 days:
• Penalty: This one's a biggie! First offense: Rs. 50 million (that's over $300,000!) Subsequent offenses: Rs. 100 million (over $600,000!)
• Note: The effective date for imposing this penalty will be notified by the FBR separately.

Not Paying Tax During Share Transactions

• Skipping tax payment when buying or registering shares:
• Penalty: 50% of the tax amount owed

Incomplete or Inaccurate Tax Returns

• Companies and associations that: Don't provide all necessary details in their tax return forms Submit blank or incomplete annexures (additional documents) Attach irrelevant information
• Penalty: Higher of: Rs. 500,000 (roughly $3,000) or 10% of your tax liability

Remember:

• This is just a glimpse into the penalties outlined in the Finance Act 2024 for Tax year 2025 and onwards.
• In addition to that Sim block, disconnection of Utilities and 100% higher tax rates for Non Filers are also implemented
• It's crucial to consult with a tax advisor for specific guidance based on your situation.
• Timely filing, accurate reporting, and compliance can save you significant hassle and financial burden.

Stay informed and avoid penalties!

This article was published at New Fines Imposed for Non-Compliance u/s 182 for Tax Year 2025