The banks have been allowed until November 30, 2023, by the Federal Board of Revenue (FBR) to pay an extra 40% tax on windfall income, profits, and gains that arise during the 2021 and 2022 calendar years.
The Federal Government has designated the banking firms as the sector for the purposes of Section 99D of the Income Tax Ordinance, according to S.R.O. 1588 (l)/2023, released by the FBR on Wednesday.
The formula for calculating windfall income, profits, and gains must follow the guidelines in this notification, according to the FBR’s determination. Additionally, the FBR has said that a forty percent tax rate will apply for the purposes of the aforementioned Section 99D.
For the purposes of Section 99D, the range of windfall income, profits, and gains shall be as calculated in this SRO for the calendar years 2021 and 2022, which correspond to tax years 2022 and 2023, respectively.
The FBR has set November 30, 2023, as the deadline for paying the additional tax for section 99D purposes. Alternatively, the taxpayer may choose to extend the deadline by up to fifteen days, provided that the Commissioner grants permission in writing for reasons to be documented. The taxpayer must submit a written request for an extension of time by that date.
According to FBR regulations, the extra tax must be paid into the federal treasury via an electronic payment receipt or a prescribed challan.
FBR said that the established procedure must be followed in order to calculate the windfall income, profits, and gains.
