In Pakistan, individuals and businesses are required to file income tax returns if their income exceeds a certain threshold. If a person or business fails to file their income tax return on time, they may be subject to penalties and interest charges.
The specific penalties for not filing income tax returns on time depend on the length of the delay and the amount of tax due. In general, the longer the delay in filing the income tax return, the higher the penalties will be.
The penalties for not filing income tax returns on time are as follows:
- If the delay is less than 30 days, the penalty is equal to 1% of the tax due per month of delay, up to a maximum of 10% of the tax due.
- If the delay is more than 30 days, the penalty is equal to 2% of the tax due per month of delay, up to a maximum of 20% of the tax due.
In addition to these penalties, individuals and businesses that fail to file their income tax returns on time may also be subject to interest charges. The interest rate for late payment of income tax is 18% per annum.
It is important to note that these penalties and interest charges may be waived or reduced in certain circumstances, such as if the person or business can demonstrate that the delay was due to circumstances beyond their control.