FBR urges financial institutions to settle 40% windfall tax as soon as possible

The Federal Board of Revenue (FBR) has released a notification requiring financial institutions to settle a 40% additional tax on windfall income, profits, and gains from transactions in 2021 and 2022, as reported on November 22.

As per the details in S.R.O.1588 (l)/2023, banking companies must pay an extra tax on such income derived from foreign exchange dealings.

Read: FBR To Open 145 Offices Nationwide For Tax Collection Boost

This tax measure aligns with section 99D of the Income Tax Ordinance. However, the FBR has set November 30, 2023, as the deadline for payment.

Extensions up to fifteen days may granted by the Commissioner in exceptional cases. Also the contingent upon a written application from the taxpayer with justified reasons.

The FBR specifies that the windfall tax payment should made using a prescribed challan or computerized payment receipt in the federal treasury.

Read: FBR Assures The Continuation Of The Exemption Of PKR 50,000 Per Month From Income Tax

Additionally, the calculation of windfall income, profits, and gains must follow the FBR’s specified formula. It ensures a consistent and transparent process.

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