960414

IT for finalising

bank assessments

by June 30

AMANULLAH BASHAR

KARACHI: The Income Tax Department has sought banks' co-operation to finalise the assessments financial institutions before 30th June 1996. The banks were urged to deposit tax in respect of un-disputed issues within the stipulated time on receipt of the assessment orders. This year returns for 18 months have been filed by the banks as late as 31st March.

The income tax authorities have emphasised proper deduction of tax from salary of the staff, and interest payments, tax on the financial instruments and on exports, by the banks and financial institutions and its timely deposit within 7 days.

Aftab Iqbal Rathore, Regional Commissioner, Income Tax (Corporate Sector) discussed these points in a meeting with the presidents, managing directors and representatives of the banks and financial institutions, held at the conference hall of the Income Tax Building here on Sunday.

The purpose behind the meeting was to improve coordination between the Income Tax Department and the financial institutions for tax collection.

It was suggested to the banks that separate challans of tax deduction under section 50(1) on salary, on exports u/s 50(5A) for each assessee may be made out, while particulars of the individuals be mentioned on the challan I.T. 31 in preparing common challan.

The State Bank of Pakistan may also be informed about the collection where bank guarantees under High Court Stay of 6-months, have matured in respect of tax deduction under section 50(5A) encashment may be made and tax deposited.

The banks were also asked to provide back up material details, if possible, in case of certificate of bad debts issued from the State Bank which do not provide any information regarding classification of debts. These certificates should be in respect of the loss/bad debts category only, as per prudential regulation VIII.

Some of the bankers pointed out the ambiguity in tax deduction at the rate of .2 percent on the transfer of funds. This tax is leviable only on transfer of funds from one city to another, but some income tax officials are asking for tax deduction even on local draws specially in Faisalabad.

The income tax authorities assured the bankers that the ambiguity will soon be removed, and the Central Board of Revenue will be asked to clear this issue. The tax authorities however agreed that this tax should not be levied on the local withdrawals and applicable only on transfer of funds.

A suggestion was given that in the pre-budget and post-budget seminars the representative for the banks, DFIs, etc may also be invited. Importance of the scheme of withholding tax was also discussed.

The presidents and representative of the following institutions attended the meeting:

Kasi Parekh, President, Metropoliton Bank Ltd; M. Usman Kushtiwala, Executive Director, Bank Al-Habib Ltd; Safar Ali Lakhani, President, Soneri Bank Ltd; Khalid Mohammad, Managing Director, Industrial Development Bank of Pakistan; Khalid A. Sherwani, President, United Bank Ltd; Imdad Hussain Shaikh, President, Prudential Commercial Bank; Khawaja Nawazish, Executive Vice-President, Allied Bank Limited; and the representatives of Muslim Commercial Bank Ltd, Indus Bank Ltd, National Development Finance Corp, Pakistan Industrial Credit Inv. Corp, Faysal Islamic Bank Ltd, National Bank of Pakistan, Habib Bank Ltd, Pakistan Banking Council, and State Bank of Pakistan.

Senior income tax officials including Akhtar Nazar Mian, Regional Commissioner (Southern region), Mumtaz Ahmed Shaikh Commissioner Income Tax (Banks and Financial Institutions) Zahir Kaleem also attended the meeting.