FBR binds banks to report profits earned on deposits by account holders

FBR binds banks to report profits earned on deposits by account holders

KARACHI: The Federal Board of Revenue (FBR) on Tuesday has bound the banking companies to report details regarding account holders earning profit on deposits while relieving the banks from the requirement of providing/filing account holders’ details regarding currency transactions report and suspicious transactions reports. The Federal Board of Revenue (FBR) vide SRO 29(I)/2019 amended Income Tax Rules, 2001 and eased the requirement of furnishing certain details about the account holders’ transaction as required by Section 165A of the Income Tax Ordinance, 2001. However, banks are required to provide to FBR a list of persons receiving profit on debt (deposits) exceeding Rs1.0 million for filers and Rs0.5 million for non-filers and tax deductions thereon during preceding financial year. Moreover, banks are no longer required to report account holders’ details of written-off loans statement to the FBR. Every banking company will furnish to the FBR a monthly account holders deposits statement, credit card payments statement and cash withdrawal statement for immediate preceding calendar month within seven days of the end of the preceding calendar month. Banking companies will file all the above mentioned details electronically on FBR’s web portal. The currency transactions report and suspicious transactions report generated by the banks would only be submitted to the Financial Monitoring Unit (FMU) of the State Bank of Pakistan (SBP). Under the provisions of AML Act, 2010 a Suspicious Transaction Report (STR) is filed with the Financial Monitoring Unit (FMU) for a suspicious transaction conducted or attempted through a financial institution. The transaction is considered suspicious, inter alia, if there are reasons to suspect, after having examined the available facts including the background and possible purpose of the transaction, that the transaction has no apparent lawful purpose. A Currency Transaction Report (CTR) is filed with FMU if a cash-based transaction of over and above Rs2.5 million is carried out at a financial institution. After analyzing and having established an account holder to be suspect of money-laundering, revenue evasion and unauthorized flight of capital, the State Bank of Pakistan (SBP) forwards the case to Inland Revenue Intelligence & Investigation of Federal Board of Revenue (FBR) for further action.  
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