Under the draft of the Income Tax (First Amendment) Act, 2016, the persons convicted under Control of Narcotics Substances Act, 1997, Anti Terrorism Act, 1997 and Anti-Money Laundering Act, 2010 shall not be eligible to qualify under this Schedule. According to the scheme, traders deriving income other than from trading activities chargeable under the head "Income from Business", profit on debt, dividend and income from property shall not qualify under this Schedule.
The provisions of sections 177, 214C and 214D shall not apply to a trader qualifying under this Schedule, for tax years 2015 to 2018. Trader qualifying under Part I of this Schedule shall file a return as specified in Form 'A" of rule ( ) of this Part and trader qualifying under Part II of this Schedule shall file a return as prescribed under Income Tax Rules, 2002.
A trader qualifying under this Schedule shall not be entitled to claim any adjustment of withholding tax collected or deducted under the Ordinance or refund due, against tax payable in respect of profits and gains relating to trading activity. It said that a trader qualifying under this Schedule shall not be entitled to claim any adjustment of refund due, against tax payable. A trader qualifying under this Schedule shall be entitled to claim adjustment of withholding tax collected or deducted under sections 150, 151 and 155 against tax payable in respect of income under section 5, 7B and 15 respectively.
If a trader fails to furnish a return for any of the tax years 2016, 2017 or 2018 after having furnished a return for tax year 2015 shall not qualify under this Schedule for any of the tax years 2015 to 2018 notwithstanding the fact that the return for tax year 2015 stood qualified under this Schedule at the time of furnishing of such return and all the provisions of the Ordinance shall apply.
Where it is subsequently discovered by the Commissioner that the trader was not eligible to be qualified under this Schedule or became ineligible to be qualified under this Schedule during any time between tax years 2015 to 2018 due to non-payment of tax or filing of return or otherwise, the trader shall be treated to have exercised option (b) of rule (1) and all the provisions of the Ordinance shall apply accordingly, it said.
Tax payable under rule (2), (3), (7), (8) and (9) shall be paid in State Bank of Pakistan or authorised branches of National Bank of Pakistan and evidence in the form of a copy of CPR (Computerized Tax Payment Receipt) shall be provided along with the specified or prescribed return, as the case may be, by the due date; or a trader qualifying under this Schedule shall not be a prescribed person for the purpose of section 153 of the Ordinance.
For the income relating to trading activity and qualifying under this Schedule, the Commissioner shall be taken to have made an assessment of income for that tax year, and the tax due thereon as equal to those respective amounts computed under rules (2), (3), (7), (8) and (9) of this Schedule; and the specified or prescribed return, as the case may be, shall be taken for all purposes of this Ordinance to be an assessment order including the application of Section 120.
Explanation: For the removal of doubt and for the purpose of this rule it is declared that income means taxable income or imputable income as the case may be. The federal government may, from time to time, by notification in the official Gazette, amend the schedule so as to add any entry therein or modify or omit any entry therein. The provisions of sub-section (2) of section 116 shall not apply for the tax year 2015 to the trader qualifying under this Schedule if the declared income for the year is less than one million rupees.
Notwithstanding anything contained in aforesaid rules, a return qualifying under this Schedule may be subjected to amendment under section 122 where definite information, as defined in sub-section (8) of section 122, comes into the knowledge or possession of the Commissioner in which case all the provisions of the Ordinance shall apply accordingly.
In this Schedule, 'due date' means --- for tax year 2015 and for the tax year(s) 2016, 2017 and 2018 on the date prescribed in sub-clause (b) of sub-section (2) of section 118. 'Turnover' means turnover as defined in clause (a) of sub-section (3) of section 113 of the Ordinance and working capital means the difference between the current assets and current liabilities of the trader's business, draft of the Income Tax (First Amendment) Act, 2016 added.