EXEMPTION ON MONEY BUDGET, 140 BILLION TAX, FILM INDUSTRY, TEXTBOOKS, FRESH GRADUATES, IPPS, REAL ESTATE, INVESTMENT, SUKUK BONDS ABOLISHED

ISLAMABAD: The President has issued the Income Tax Amendment Ordinance 2021 which will come into force immediately. With this, income tax exemption of Rs 140 billion for various sectors has been abolished. More than 75 amendments have been made to the law. A new thirteenth schedule has been introduced in the Income Tax Ordinance.

According to the ordinance, exemptions on the film industry, textbooks, fresh graduates, IPPs, real estate investments, sukuk bonds have been abolished, 5,000 on non-NTN affiliate businessmen, 40,000 on failure to collect or deduct taxes. Or a penalty of 10% of the tax amount.

Tax exemptions for sports organizations, including the PCB, have been converted into tax credits, and exemptions on auto-disabled syringes will remain. The tax commissioner will be fined Rs 50,000 or 50 percent of the tax for obstructing access to business or premises, documents, computers, or stock.

According to details, the President has issued the Income Tax Amendment Ordinance 2021, which has abolished income tax exemption of Rs 140 billion for various sectors.

More than 75 amendments have been made in the tax laws. Under the Income Tax Amendment Ordinance 2021, the revenue will be Rs 70 billion to Rs 140 billion. A new thirteenth schedule has been introduced in the Income Tax Ordinance under which 62 non-profit organizations get income tax exemption. However, non-profit organizations will continue to enjoy tax exemptions.

Among them are Shaukat Khanum Memorial Trust, Sharif Trust, Alamgir Welfare Trust, Citizen Foundation, Fatmeed Foundation Karachi, Al-Shifa Trust, Mumtaz Bakhtawar Memorial Trust, Red Crescent Society, Al-Shifa Trust Trust Hospital, Brotherhood, Pakistan Fund Foundation, Brotherhood, Pakistan Aid Foundation. There are 62 institutions including 2010 and Chief Ministers Flood Relief Fund 2010 while all sports organizations including PCB will get tax exemption.

Houses completed under the Prime Minister's Scheme till June 2024 will also get tax exemption. The key sectors that will be exempted from income tax are IPPs, real estate investment trusts, Mudaraba companies, income, and profits of sukuk bonds, manufacturing sector. The tax exemption on the replacement of plants and machinery will also be abolished.

The Income Tax Amendment Ordinance 2021 will come into force immediately. Under the ordinance, business people will have to display their NTNs. Failure to display NTNs will result in a fine of Rs 5,000. Failure to deduct will result in a fine of Rs. 40,000 or 10% of the tax amount on any person who prevents or does not allow the Tax Commissioner to access his business or premises, documents, computers, or stock. He will be fined Rs 50,000 or 50% of the tax amount.

Under RD Dennis, any person who repeats various calculations in the tax return for more than one year while the tax amount is less than the actual taxable tax will be liable to a fine of Rs. Anyone who fails to prepare his tax statement will be fined Rs 5,000. Anyone who fails to submit tax returns within the stipulated time will be fined 0.1% of the tax payable.

In the case of employment of new graduates, they are annual income was earlier tax-exempt which has been abolished under the Income Tax Amendment Ordinance 2021. Under the Tax Laws Amendment Ordinance 2021, the abolition of tax exemption will generate revenue of Rs 140 billion. Will be subject to income tax.

Under the ordinance, the setting up of new oil refineries will be exempted only till December 31, 2021. Private power plants will be taxed on July 1, 2021. Income tax has been imposed. According to the amendment ordinance, the tax exemption for the film industry has also been withdrawn.