Budget proposal 2014-2015: certificate of tax deduction or collection sufficient to obtain tax credit

KARACHI: The Pakistan Business Council (PBC) has advocated the government that law of certificate of tax deduction or collection should be restored as it is sufficient evidence to obtain the tax credit under income tax return.
The Finance Act 2013 inserted an amendment in Section 164 that along with certificate of deduction or collection taxpayer must obtain income tax challan or computerized payment slip (CPR) from withholding agent in order to obtain the tax credit under income tax collection.
The council said that such certificate shall be treated as sufficient evidence of the collection or deduction for the purpose of section 168 and it is impossible for the officials to prepare and issue each taxpayers’ CPR in the following cases: Section 8 of dividends; 154 of exports; 148 of imports; 231A of cash withdrawal from a bank; 231B of advance tax on private vehicles; 234 of tax on motor vehicles; 235 of electricity consumption; 236 of telephone users and 236B of advance tax on air tickets.
It is mentioned that the computerized payment slip is not practically possible in several cases.
However, the current situation explained that certificate of tax deduction or collection from the withholding agent is not enough as an evidence to claim a tax credit under income tax return.
The amendment in the law through Finance Act 2013, made it difficult to adjust the income tax withheld as per the following sections since the withholding agent is required to issue certificate of tax deduction or collection but owing to huge quantum of transactions.

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