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FBR seeks details of depositors receiving Rs500,000 as profit on debt per year

FBR seeks details of depositors receiving Rs500,000 as profit on debt per year

ISLAMABAD: Federal Board of Revenue (FBR) has directed banks to provide details of all those persons receiving interests above Rs500,000 in a year on their deposits.

According to FBR sources an amendment has been introduced to Section 165-A of Income Tax Ordinance, 2001 through Finance Act, 2019 and tightened laws regarding information providing by banks about their depositors.

Prior to amendment the clause (d) of the Ordinance, the banks were required to provide a list of persons receiving profit on debt exceeding Rs1 million for filers and Rs500,000 for non-filers and tax deduction thereon during preceding financial year.

However, after the amendment, now the banks are required to provide list of all those persons receiving profit on debt exceeding Rs500,000 – irrespective of filers and non-filers – and tax deduction thereon during preceding financial year.

Through the Finance Act, 2019 the term non-filers has been abolished and a new Tenth Schedule has been introduced under which persons appearing on Active Taxpayers List (ATL) would be subject to reduced rate of withholding tax rates.

Another amendment has been made through the Finance Act, 2019 to clause (a) of Section 165A of the Income Tax Ordinance, 2001, under which the banks are now required to provide a list of persons containing particulars of cash withdrawals exceeding Rs50,00 in a day and tax deducted thereon aggregating to Rs1 million or more during each preceding calendar month.

The amendment deleted the words ‘for filers and non-filers’ due to elimination of term ‘non-filers’.

However, banks would remain required to provide the details under clause (b) of Section 165A of the Ordinance, including a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month.

Meanwhile under clause (c), the banks are required to provide a list to FBR of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month.