INCOME TAX REFUND

By Published On: May 9, 20222.6 min readViews: 705

INCOME TAX REFUND

By Published On: May 9, 20222.6 min readViews: 705
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The income tax refund is a reimbursement to a taxpayer of any excess amount paid to the federal or a provincial government in Pakistan.

For the Income Tax, there is a provision of Section 170 of the Income Tax Ordinance 2001 which allows the taxpayer, who has paid tax in excess of the amount which the taxpayer is properly chargeable under the Ordinance may apply to the Commissioner for the refund of the excess amount. 

REFUND

  • The refund can be only claimed if the person has filed their Income Tax Return electronically. A manual Return does not entitle you to a refund.
  • The refund amount should be clearly reflected in your Income Tax Return in Iris.
  • Refunds resulting from the Income Tax Return can be claimed by filing a separate application in Iris. To check the status of your application, please visit your relevant Regional Tax Office (RTO).
  • The refund can also be claimed later on after submitting your Income Tax Return but within Three Years from the date of filing of return (date of assessment) or from the date on which the tax was paid, whichever is later.

ENTITLEMENT

  • Persons filing Tax Return for the Tax year after the specified due date will not be entitled to a refund during the period the person is not included in ATL and Income Tax authorities will not incur any liability of compensation for a delayed refund for the period the person is not appearing in ATL and such period shall not be counted for the purpose of computing additional payment for delayed refund.
  • When the Commissioner is satisfied that tax has been overpaid, the Commissioner can adjust or reduce the amount of refund by reducing the amount of other outstanding liability of the taxpayer and can refund the remainder to the taxpayer. The Commissioner is obliged to refund the amount within sixty (60) days of the refund application and his decision can be challenged in appeal, in case the person is aggrieved by it.

DELAYED REFUNDS

  • Where a refund due to a taxpayer is not paid within three months of the date on which it becomes due, the Commissioner shall pay to the taxpayer a further amount by way of compensation at the rate of KIBOR + 0.5 % per annum of the amount of the refund computed for the period commencing at the end of the three month period and ending on the date on which it was paid.
  • Provided that where there is reason to believe that a person has claimed the refund which is not admissible to him, the provision regarding the payment of such additional amount shall not apply till the investigation of the claim is completed and the claim is either accepted or rejected.

CENTRALIZED SYSTEM OF ONLINE PAYMENT

  • A Centralized System for online payment of Income Tax refunds has been devised, so the taxpayers are requested to update their IRIS profile. Taxpayers are advised to do needful ASAP to avail electronic transfer facility.
  • In the given bank account details are in the system, IBAN detail row is added wherein taxpayers are required to add their complete Bank’s IBAN number of same bank account whose details are already available in IRIS profile to receive Income Tax refund cheques.

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