Shehzad & Company

15/10/2025

Regards,
Shehzad & Co.

01/08/2025

*📢 FBR Notification – Mandatory Electronic Invoicing*

Through SRO 1413(I)/2025 dated 1st August 2025, the Federal Board of Revenue (FBR) has directed all sales tax registered persons to integrate their systems with FBR/PRAL through licensed integrators and start issuing electronic invoices as per the following schedule:

*Key Deadlines:*

🏢 Public Companies / Large Companies / Importers
Registration: 10th Aug 2025 | Testing: 25th Aug 2025 | E-Invoicing: 1st Sept 2025

📊 Companies with turnover >100M up to 1B
Registration: 10th Sept 2025 | Testing: 30th Sept 2025 | E-Invoicing: 1st Oct 2025

💼 Companies with turnover ≤100M
Registration: 10th Oct 2025 | Testing: 30th Oct 2025 | E-Invoicing: 1st Nov 2025

👥 Individuals/Associations with turnover >100M
Registration: 10th Sept 2025 | Testing: 30th Sept 2025 | E-Invoicing: 1st Oct 2025

📌Other Registered Persons
Registration: 10th Nov 2025 | Testing: 30th Nov 2025 | E-Invoicing: 1st Dec 2025

*✅ Businesses are advised to complete registration and integration within the prescribed timelines to ensure compliance and avoid penalties.*

10/07/2025

*"Tax Season 2025 Begins!"*

*"File Your Tax Return with Confidence, Maximize Benefits & Avoid Penalties"*

Are you worried about "Tax Consultancy" ?
Want to become a "Filer" ?
Are you looking for "Proper Book Keeping" of accounts?

We are here for you!

Shehzad & Co. (Est.1995)

Address:
Office No.508, Japan Plaza, Opp. Mama Parsi School, Main M.A Jinnah Road, Karachi.

Timings:
10:00 A:M to 6:30P:M
(MON to SAT)

(L) 021-32778744
(M) 0333-3097848 , 0310-2834824
(E) [email protected]
(F) https://www.facebook.com/ShehzadandCompany/

10/07/2025

*Major Changes Introduced by FBR in the Income Tax Return Filing Process*
In light of S.R.O. 1212(I)/2025, the Federal Board of Revenue (FBR) has implemented two major changes to enhance the transparency, accountability, and digitization of the tax filing system.

At Taxation Accounting and Finance Updates, we aim to keep our channel followers well-informed and fully compliant. Below is a summary of the two key changes every taxpayer should be aware of:

*🔐 1. Introduction of a New PIN Verification System*

Previously, tax consultants could generate a PIN themselves and submit the return on behalf of clients.

*What's new?*
FBR will now generate and send a one-time PIN code directly to the taxpayer’s registered mobile number.

This PIN serves as a digital declaration, affirming:

*“I declare that the information provided in this return is true and accurate to the best of my knowledge, and I accept full responsibility for it”*

Your tax consultant will now require this PIN from you in order to submit your return.

✅ This change ensures that taxpayers are personally aware and responsible for the accuracy of their filed returns.

Remember we aim to keep our channel Taxation Accounting and Finance Updates followers well-informed and fully compliant.

*📊 2.Addition of “Valuation Data” in Wealth Statement*

Previously, wealth statements required only the cost of acquisition of an asset.

*What’s changed?*
Now, you are also required to report:

The current market value of each asset for the year being filed;

And in future years, the difference in market value from year to year.

*🔍 For Example:*
If a taxpayer declares 50 tolas of gold in the wealth statement, and the current per tola value is *Rs. 300,000:*

*50 × 300,000 = Rs.15,000,000*

But if the declared annual income is only Rs. 1.5 million, this may raise a red flag for FBR.

💡 FBR will use this valuation data for risk profiling and monitoring. Cases with disproportionate assets and income may be flagged as high risk, possibly resulting in future notices seeking clarification, such as:

> “How were such large assets accumulated with a relatively low declared income?”

*✅ What Should You Do?*

Declare your income and assets accurately and honestly.

Ensure your wealth statement aligns with your declared income.

If your asset base is substantial, consider planning and declaring an increased income by paying some additional tax, to strengthen your tax file and avoid future complications.

10/07/2025

*Tax on Cash Withdrawals by Non-ATL Persons - Section 231AB*

The Finance Act, 2025 has amended Section 231AB of the ITO, which pertaines to tax on cash withdrawals by persons not appearing on the Active Taxpayers List ("ATL").

It is important to note that the daily threshold of Rs. 50,000 for such withdrawals remains unchanged, the rate of withholding tax has been increased from 0.6% to 0.8%.

This amendment applies only to persons not appearing on the ATL and is aimed at encouraging broader tax base.

*Example:* If an individual who is not on the ATL withdraws Rs. 100,000 in cash from their bank account on a single day, the bank will deduct Rs. 800 (0.8%) as withholding tax instead of the earlier Rs. 600 (0.6%).

*Implications*

The increased withholding tax rate on cash withdrawals by non-filers from 0.6% to 0.8%, raises the cost of remaining outside the tax net. This amendment may be contradictory to the aim of documentation of the economy as it may discourage use of banking channels altogether, as non-filers may deal in cash to avoid the tax, thereby undermining the goal of economic documentation.

Regards’

10/07/2025

*Disallowance of Business Expenditure - Section 21(s)*

The Finance Act, 2025 has inserted a new clause (s) in Section 21 of the Income Tax Ordinance, 2001, which pertains to "Deductions Not Allowed." The newly inserted clause reads as follows:

*Quote*

(s) fifty percent of the expenditure claimed in respect of sale where the taxpayer received payment exceeding two hundred thousand rupees otherwise than through a banking channel or digital means against a single invoice containing one or more than one transactions of supply of goods or provisions of services.

*Unquote*

This amendment disallows 50% of the claimed expenditure related to any sale where payment exceeding Rs. 200,000 is received in cash or through any mode other than banking channel or digital means, in relation to a single invoice, regardless of whether it includes one or multiple transactions for the supply of goods or services.

We understand that the disallowance will apply to expenditure related to sales, such as freight, carriage, commission, and other distribution-related expenses.

*Example 1 (Below Threshold No Disallowance):*

A taxpayer sells goods worth Rs. 199,999 through a single invoice and receives the amount in cash. Since the payment does not exceed Rs. 200,000, no disallowance will apply.

*Example 2 (Above Threshold - Disallowance Applies):*

A taxpayer makes a sale of goods amounting to Rs. 200,001 through a single invoice and receives the payment in cash. Since the transaction exceeds the prescribed threshold of Rs. 200,000 and the payment is not made through a banking channel or digital means, 50% of the claimed expenditure related to such sale shall be disallowed under the relevant provision.

For instance, if the taxpayer has claimed Rs. 30,000 as expenditure directly attributable to such sale, Rs.15,000 shall be disallowed.

It is important to note, however, that there is no prescribed method, ratio, or formula under the law to determine what portion of expenditure is "directly attributable to such sale." This creates a significant ambiguity, as the FBR has no mechanism to assess which amount of expenditure pertains specifically to sales made through invoices exceeding Rs. 200,000 with cash payments. Consequently, due to such ambiguity, taxpayers may argue that a low amount of directly attributable expenditure has been made for such sales to mitigate the impact of disallowance which can defeat the entire purpose of this amendment and may lead in a revenue loss for the exchequer.

Furthermore, individuals are under no statutory obligation to have their accounts audited by an auditor, and similarly, AOPs falling below the prescribed turnover threshold of Rs.300 million are not legally required to undergo audit. This may lead to significant practical challenges in certifying expenditure attributable to sales.

This measure may prove counterproductive, as it could incentivize businesses to conceal such sales, thereby contributing to the expansion of the informal economy.

Regards

10/07/2025

*In tax return 2025, a new option has been introduced instead of PIN for verification, now verification code will be sent on the registered mobile number of tax payer and then return will be submitted.*

*A new hardship for tax payers is coming during work load days*

Regards’

07/06/2025

Eid ul Adha Mubarak to you and your family ❤️ May Allah Swt accept your prayers and oblations on this day.
Regards,
Shehzad & Co.

14/10/2024

30/09/2024

Are you worried about "Tax Consultancy" ?
Want to become a "Filer" ?
Are you looking for "Proper Book Keeping" of accounts?

We are here for you!

Shehzad & Co. (Est.1995)

Address:
Office No.508, Japan Plaza, Opp. Mama Parsi School, Main M.A Jinnah Road, Karachi.

Timings:
10:00 A:M to 6:30P:M
(MON to SAT)

(L) 021-32778744
(M) 0333-3097848 , 0310-2834824
(E) [email protected]
(F) https://www.facebook.com/ShehzadandCompany/

31/07/2024

Regards
Shehzad & Co.