CBR clarification about income tax returns under USAS

ISLAMABAD (December 23 2003): Persons having landline phones/mobile phone connections having annual income below the taxable limit should not hesitate in filing income tax returns as their returns would not be placed for audit selection under the Universal Self-Assessment Scheme (USAS).

Phone/mobile phone users with taxable limit above the exemption threshold should also not worry as potential audit cases will be selected by taking into consideration various parameters to be notified by January 15.

Every person using mobile phone and not filing return must understand that he will not face any notice or proceedings after filing of return under the applicable law.

Phone/mobile phone users have to file return, but they should not worry, as those having income below the taxable limit could not be selected for audit under the Universal Self-Assessment Scheme (USAS).

CBR sources told Business Recorder here on Monday that mobile/landline phone users, even if their income is below the taxable slab, should file their return under the income tax law. But this does not mean that they have to face any assessment or audit proceedings.

Every return filed under the USAS would be acceptable and the CBR will only select potential cases for audit through parametric selection of cases using parameters to be notified till January 15.

Sources said that persons using company maintained mobile phone could simply submit copy of company's bills etc along with the tax returns. Thus, those using company's mobile phones should also file return without any apprehension of receiving notices/proceedings.

They said that a mobile phone user is most likely to have taxable income above the exemption threshold, but even these cases could not be selected for audit until they come under the parametric selection procedure meant to hunt for real big cases of under-reporting.

They said that people who are obliged to file income tax returns include owners of houses with 250 square yards or more, flats having 1500 square feet covered area, person owning a motor vehicle and persons having telephone connections etc.

Dispelling impression that phone users would face any statutory notices, they said that in case a mobile phone user does not file return, he could be identified through Integrated Tax Information System (ITIT).

In this regard, CBR has already collected data through both internal/external sources including National Tax Numbers (NTN), motor registration authority, tax return data, utility agencies, tax payment receipts, PTCL/mobile phone data and survey data.

The CBR could issue letters to these persons to get their NTN. However, CBR will not issue statutory notices to them.

There is a difference between a letter and a statutory notice as the latter is a legal notice served to any person.

The whole purpose of the exercise is to broaden tax-base, they added.

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