In Pakistan, income tax refund can be claimed by individuals, associations of persons, or companies who have paid more tax than their actual income tax liability during a tax year. However, there is one basic criterion to claim the income tax refund, which is to file the income tax return. Refunds are not claimable by any other way. The only other option is to adjust such excess tax against one’s salary tax deduction, which is only available to salaried individuals.
The amount of refund visible on one’s income tax return form may vary. Taxpayers can either ask for all the amount to be refunded to their account via lodging an online application under section 170, or the same amount can be adjusted against tax liability of future years.
Adjustable taxes can be claimed in three ways:
- These can be adjusted in the current tax year.
- Refunds can be claimed.
- These can be carried forward to be adjusted in the next tax year as well.
The other two types of taxes deducted are final tax and minimum taxes. All the taxes deducted under goods or services nature are final in nature. Except for manufacturers and the companies listed on stock exchange for which these are adjustable. The minimum taxes are only adjusted against current year liability and cannot be carried forward or claimed as a refund.
It is important to note that income tax refunds are subject to verification by the tax authorities. The verification process may take some time, so it is advisable to keep all the relevant documents and records ready for submission if required.
In conclusion, claiming income tax refund in Pakistan is possible if the taxpayer has filed the income tax return and paid more tax than their actual income tax liability during a tax year. The process may take some time, but with the right documentation and records, it can be a smooth process. It is also important to stay updated with Pakistan tax laws and regulations to avoid any legal issues.