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KARACHI: Federal Board of Revenue (FBR) has prescribed penalty amount for banks and withholding agents in case of non-compliance in providing details of transactions made by depositors and business partners.

According to updated Income Tax Ordinance, 2001 recently issued by the FBR, stated that where any person fails to furnish a statement as required under section 115, 165, or 165A, 165A or 165B within the due date then such person shall pay a penalty of Rs5000 if the person had already paid the tax collected or withheld by him within the due date for payment and the statement is filed within ninety days from the due date for filing the statement and, in all other cases, a penalty of Rs.2500 for each day of default from the due date subject to a minimum penalty of Rs. 10,000.

The withholding agents under Section 165 of the Ordinance are required to provide details of person where withholding tax has been collected. The withholding agents are required to provide information, included:

(a) the name, Computerized National Identity Card Number, National Tax Number and address of each person from whom tax has been collected under Division II of this Part or Chapter XII or to whom payments have been made from which tax has been deducted under Division III of this Part or Chapter XII in each month;

(b) the total amount of payments made to a person from which tax has been deducted under Division III of this Part or Chapter XII in each month;

(c) the total amount of tax collected from a person under Division II of this Part or Chapter XII or deducted from payments made to a person under Division III of this Part or Chapter XII in each month; and

(d) such other particulars as may be prescribed:

Provided that every person as provided in sub-section (1) shall be required to file withholding statement even where no withholding tax is collected or deducted during the period.

The FBR added explanation that for the removal of doubt, it is clarified that this sub-section overrides all conflicting provisions contained in the Protection of Economic Reforms Act, 1992, the Banking Companies Ordinance, 1962, the Foreign Exchange Regulation Act, 1947 and the regulations made under the State Bank of Pakistan Act, 1956, if any, on the subject, in so far as divulgence of information under section 165 is concerned.

The Section 165 of the Ordinance, explains about furnishing of information by banks, it included:

(1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962, the Protection of Economic Reforms Act, 1992, the Foreign Exchange Regulation Act, 1947 and the regulations made under the State Bank of Pakistan Act, 1956, if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—

(a) a list of persons containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon for filers and non-filers, aggregating to Rupees one million or more during each preceding calendar month.;

(b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;

(c) a list 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;

(d) a consolidated list of loans written off exceeding rupees one million during a calendar year; and

(e) a copy of each currency transactions report and suspicious transactions report generated and submitted by it to the Financial Monitoring Unit under the Anti-Money Laundering Act, 2010.

The FBR further said that where any person fails to furnish wealth statement or wealth reconciliation statement the such person shall pay a penalty of 0.1 percent of the taxable income per week or Rs.20,000 whichever is higher.”

Likewise, where any person fails to furnish a foreign assets and income statement within the due date then such persons shall pay a penalty of 2 percent of the foreign income or value of the foreign assets for each year of default.

Where any person fails to furnish a return of income as required under section 114 within the due date. Such person shall pay a penalty equal to 0.1 percent of the tax payable in respect of that tax year for each day of default subject to a maximum penalty of 50 percent of the tax payable provided that if the penalty worked out as aforesaid is less than twenty thousand rupees or no tax is payable for that tax year such person shall pay a penalty of twenty thousand rupees.