KARACHI: The Federal Board of Revenue (FBR) has introduced a separate simplified income tax return form for salaried persons, who have other sources of income, including profit on debt (interest income).
In this regard, the FBR issued a notification on Wednesday and said that the separate and simplified income tax return form had been introduced to facilitate salaried taxpayers, who were deriving income from salary and other sources where income from salary is more than 50 percent of the total income.
The FBR explained that the income is classified under five heads of income such as salary, business, house property (rental income), capital gain, and other sources. “The separate form is meant only for persons deriving salary income or a combination of salary income and income from other sources where salary is more than 50 percent of the total income,” according to the notification.
The FBR said income from other sources was a residual head of income and includes profit on debt (interest income) and various other categories as explained in Income Tax Ordinance, 2001 which were not included in other head of income.
“The simplified return form, the income of interest income has been included under other source of income,” the Federal Board of Revenue added. The Federal Board of Revenue, however, explained that for persons deriving income from business, rental income and capital gain in addition to salary income, the declaration has to be made on the main return form and not on the simplified form meant for salary and other sources of income.
Thus, a person who derives even a minimal portion of business income, house property or capital gains income along with the salary income is required to file the main return form containing all heads of income and not on the simplified return form for salary and other sources where salary is more than 50 percent of the total.
The Federal Board of Revenue said that income from rendering services falls under the head, income from business, so any salaried person who is also deriving income from services would have to file the main return form and not the simplified return form for salaried individual.