KARACHI, Sept 7: The Central Board of Revenue has created confusion over the requirement of maintaining minimum books of account by all category of taxpayers.
As per the law all category of taxpayers have to maintain minimum books of account — documents and records — except those who have business income up to Rs200,000 per annum.
However, the CBR’s circular No 14 of 2002, recently issued gives the impression that the requirement of maintaining minimum books of account by all category of taxpayers has been waived and exemption has been given across the board. The circular reads: “...requirement of maintenance of minimum books of account, documents and records, prescribed under Rule 30 of the Income Tax Rules 2002, is not attracted in case of importers ... or any other person deriving income from business whose tax collected or deducted at source is the final discharge of tax liability and who is filing a statement under section 165 of the Income Tax Ordinance 2001.”
Whereas the Rule 29, of the Income Tax Rules 2002 make it mandatory upon all category of taxpayers to maintain books of account, documents and records, and it is read here as under:
“Books of account, documents and records, to be maintained. Every taxpayer deriving income chargeable under the head “Income from business” shall maintain proper books of account, documents and records, with respect to ...”
Even in the Rule 30, of the Income Tax Rules 2002, exemption from maintaining books of account, documents and records, has been only given to those taxpayers whose annual business income is below Rs200,000.
A tax consultant Imran Haq told Dawn the CBR had issued this circular without giving proper thought to the subject matter and even not realizing that if a business income on a given fiscal was below Rs200,000, it might increase in the subsequent years.
He said a lot many queries were coming in from taxpayers, who generally believed that under circular No 14 of 2002, the condition of maintaining minimum books of account has been withdrawn.
“There is ambiguity in the language of the circular which has created confusion among taxpayers at a time when filing of tax returns is going on and the last date for receiving returns is Sept 30, 2002,” he maintained.
Another tax consultant said when the government was striving hard to document the entire economy such measures, coming from the CBR, were contrary to the government policy.