The Federal Board of Revenue (FBR) has announced that the 15 percent surcharge under Section 4A of the Income Tax Ordinance 2011 is payable by all tax payers of their tax liability for the tax year 2011, irrespective of whether their tax year ends on 31st December 2010 or 30th June 2011 or any other date. In a circular issued on Monday, the FBR has made certain clarifications to the 15 percent surcharge in view to address the queries being received by the Board suggesting multiple interpretations of the Section and to streamline the implementation of this time bound provision. The circular further clarifies that the Tax Liability for the entire Tax Year 2011 may not be subjected to the imposition of surcharge and the same will be levied on the proportionate liability for a period of three and a half month. The surcharge is to be computed at 15 percent of the Income Tax payable for three months and a half on pro-rata basis and the tax liability inclusive of 15 percent surcharge so calculated is to be set off against the taxes withheld or collected in the tax year. STAFF REPORT
