Amendments proposed in Income Tax Rules 2002

ISLAMABAD (June 16 2004): The Central Board of Revenue (CBR), through Finance Bill 2004, has proposed amendment in the Income Tax Rules 2002 to incorporate changes made in the income tax law.

The CBR on Tuesday issued a draft amending the Income Tax Rules 2002 through an SRO(I)/ 2004 issued here on Tuesday.

Under the draft amendment, the CBR has worked out quarterly statement of deduction of tax on income chargeable under the head 'Salary'.<br>
The CBR has asked all stakeholders to comment on the proposed amendment within 15 days of the issuance of notification. After the expiry of period, the CBR will issue formal amendments in Income Tax Rules 2002.

According to the notification, in rule 9 of the Income Tax Rules 2002, for sub-rule (2) the following shall be substituted, namely:

'(2) Where any allowance or perquisite is receivable in cash, the whole of such amount shall be included in the employee's salary except house rent allowance receivable by the employee in cash up to 45 percent of the minimum of the time scale of his basic salary or the basic salary where there is no time scale subject to a maximum of two hundred seventy thousand rupees' (Rs 270,000).;

(1) in rule 18, in clause (b), in sub-clause (ii), the proviso shall be omitted;

(2) in rule 51, after sub-rule (6), the following new sub-rule shall be added, namely:-

'(7) The Commissioner may on sufficient cause being shown, extend the date for the delivery of any statement so, however, that no extension of time for a period or periods amounting in all to more than fifteen (15) days from the date specified in sub-rules (1), (2), (3), (4) and (5) shall be allowed'.;

(3) in rule 51A, in the marginal heading for the word 'Quarterly' the word 'Annual' shall be substituted.

(4) After rule “51A”, amended as aforesaid, the following new rule shall be inserted, namely:-

“51B. Quarterly statement under section 165 read with section 149 regarding salary.- A statement under section 165 read with section 149 thereof, shall be furnished by every person responsible for paying income chargeable under the head 'Salary', where the income so paid by him to any person exceeds the maximum taxable limit, to the Commissioner having jurisdiction to such recipients, in the following form and shall be verified in the manner indicated therein, namely:-

2. In the case of an employee who has left the service of the employer progressive totals of the amount paid, etc, and the tax deducted should be shown up to the last month of the each quarter.

3. The address of the former employer of a new employee and the address of the new employer of an outgoing employee shall be given in the remarks column of the above statement wherever practicable';

(5) in rule 53, in sub-rule (1), –

(a) after brackets and letter '(c)', the word, brackets and letter 'or (d)' shall be inserted;

(b) in the form, in the heading, after the brackets and letter '(c)', the word and letter 'or (d)' shall be inserted.

(6) in rule 118, for the words, brackets and letters 'sub-rule(1) of rule 109' the word and figure 'rule 102' shall be substituted; and

(7) in rule 225, in clause '(e)', after the word 'Certified', the word 'Chartered' shall be inserted.

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