The Federal Board of Revenue (FBR) has extended the deadline for digital payments by the corporate sector stipulated in Section 21 (1a) of Income Tax Ordinance-2001 up to 30th November 2021.

FBR has exercised this power conferred upon it under Section 214A of the Income Tax Ordinance, 2001 after receipt of various representations filed by the taxpayers.

The date extension has been announced in view of demand made by the corporate sector to explain or define “digital mode”, so as to make clear what kind of banking transactions are covered under it. It is to note that the Income Tax Ordinance, 2001 does not contain any definition of the digital mode.

In principle, FBR notified a few weeks ago that under the Tax Laws (Third Amendment) Ordinance, 2021 that any expenditure in excess of Rs. 0.25 million by the corporate sector will be inadmissible for tax deduction purposes if not paid through digital mode.

The FBR outlined that through this amendment, payments made by a company under a single head of account exceeding Rs. 250,000 other than by digital means from a business bank account of a taxpayer notified to the Commissioner under Section 114A of the Ordinance shall not be admissible for deductions, with a few exceptions.

Source: Pro Pakistani