114(4) Notice : “you have not furnished return of total income for the tax year________ due to be filed under section 114 of the Income Tax Ordinance, 2001.You are required to furnish on or before (Date mentioned) the return of income for the said tax year, in the prescribed form and verified in the prescribed manner along with supporting documents”
you may receive this in e-mail
When Do You Receive a Section 114(4) Notice from FBR?
You will receive 114(4) notice when you have not filed your tax return for the mentioned tax year within due date, and it is still pending to be filed on or before the date mentioned in notice.
It could be that:
- You have not filed your income tax return by the due date for a specific tax year.
- The FBR requires you to file a return of income for the entire tax year, even if you believe you’re not required to do so.
Why Did You Get a Section 114(4) Notice from FBR?
The primary reasons for receiving a Section 114(4) notice include:
- Non-filing: You haven’t filed your income tax return for the specified tax year by the due date.
- Compliance Check: The FBR wants to verify your income and tax status for a particular year.
- Discrepancies: The FBR may have identified inconsistencies in your financial information from other sources.
- Random Selection: You may have been randomly selected for a compliance check.
Entities Required to File Tax Returns
You will get a Section 114(4) notice if you were required to furnish your tax return but failed to file. The following entities are required to file tax returns:
- Every company.
- Every person who has obtained a National Tax Number.
- Every person (other than a company) whose income for the year exceeds the limit not chargeable to tax under the Ordinance for the year.
- Any non-profit organization as defined in clause (36) of section or any welfare institution approved under clause (58) of Part I of the Second Schedule.
- Every person whose income for the year is subject to final taxation under any provision of the Ordinance.
- Individuals who purchase or own a motor vehicle with an engine capacity above 1000 cc.
- Owners of immovable property with a land area of five hundred square yards or more.
- Owners of flats with a covered area of two thousand square feet or more located in a rating area.
- Holders of commercial or industrial electricity connections with annual bills exceeding five hundred thousand rupees.
- Resident persons registered with any chamber of commerce and industry, trade or business association, market committee, or professional body such as the Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council, or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan, or Institute of Cost and Management Accountants of Pakistan.
What Should You Do After Receiving a Section 114(4) Notice from FBR?
Upon receiving a Section 114(4) notice, it’s crucial to take prompt and appropriate action. Here’s a detailed guide on what you should do:
1. Understand the Notice
Carefully review the notice, noting:
- The specific tax year for which the return is required.
- The deadline for submission.
- Any specific instructions or requirements mentioned in the notice.
2. Gather Necessary Documentation
Collect all relevant financial records, including:
- Bank statements.
- Invoices and receipts.
- Salary slips (if applicable).
- Investment records.
- Any other documents supporting your income and expenses for the specified tax year.
If you’ve filed returns for previous years, have these on hand for reference.
3. Prepare the Return
- Use the prescribed forms available on the FBR’s website or IRIS portal.
- For salaried individuals, consider using the Declaration form 114(I).
- Ensure all information is accurate and complete.
- Include details of all income sources, deductions, and applicable tax credits.
- Double-check all calculations and entries.
4. Submit the Return
- Log in to the FBR’s IRIS portal.
- Submit your return electronically before the due date specified in the notice.
- Verify that the submission is successful.
- Keep a copy of the acknowledgment for your records.
5. Respond Promptly
- Adhere to the deadline specified in the notice to avoid penalties.
- Attach all necessary supporting documents to substantiate your return.
- Be aware that failure to respond may result in a best judgment assessment under Section 122C and penalties under Section 182.
6. Seek Professional Assistance if Needed
If you’re unsure about any aspect of preparing or filing your return:
- Consult a tax advisor or professional tax planner like ABH Consultants.
- We can help ensure your return is accurate and compliant with all regulations.
7. Keep Detailed Records
Maintain copies of:
- The Section 114(4) notice.
- Your submitted tax return.
- All supporting documents.
- Any correspondence with the FBR.
These records will be valuable if there are any future inquiries or audits.
Plan for Future Compliance
To avoid receiving similar notices in the future:
- File your income tax returns accurately and on time each year.
- Maintain complete and organized financial records throughout the year.
- Stay informed about changes in tax laws and filing deadlines.
Documents Required For Income Tax & Wealth Statement of Tax Year 2023-24
- All Bank Statements (Business/ Personal)
- Salary Certificates (For Salaried Persons)
- Pension Certificates (For Pension Persons)
- Details of Foreign Income (If Any)
- Income from Property (Rental Property etc… If Any)
- Utility Bills of Business/ Factories (Electricity, Gas, Telephone & Water)
- Tax Deduction Certificates/ Challans (Supplies, Services, Imports, Cash Withdrawals, Bank/ Saving Profit, Mobile, Vehicle & others if any)
- Details of Employees & their Salaries/ Wages (For Business Personnel Only)
- Details of Assets of Business & Personal (If any) a) Immovable Property (Plot, House, Plaza, Factory) any purchase and sale during tax year b) Movable Property (Vehicles, Motorcycle, Certificates, Non-Business cash, Prize bonds, Gold etc.)
- Gift details (If any)
- Investment details (If any)
- Utility Bills of Residence (Electricity, Gas, Telephone & Water)
- Household Expenses
- Educational Expenses
- Medical Expenses
- Loan (If any)
- Insurance Policy Details (If any)
- Residency (Pakistan/ Overseas)
- Foreign Remittance (If any)
Note:
- Last date of filing Income Tax Return 2024 is September 30, 2024
- Tax Year (July 1, 2023 to June 30, 2024)
Looking forward
Receiving a Section 114(4) notice from the FBR is a serious matter that requires immediate attention. By understanding the notice, gathering the necessary documentation, and submitting an accurate return promptly, you can ensure compliance with Pakistani tax regulations and avoid potential penalties.
Remember, the key is to act quickly and accurately. If you’re unsure about any aspect of the process, don’t hesitate to seek professional help.
At ABH Consultants Islamabad, we specialize in assisting individuals and businesses with complex tax matters, including responding to FBR notices. Our team of experienced tax professionals can guide you through every step of addressing a Section 114(4) notice, ensuring that you comply fully with FBR requirements and protect your financial interests.
Don’t let a Section 114(4) notice cause you undue stress or lead to potential penalties. Contact ABH Consultants Islamabad today for expert assistance in managing your tax compliance.
Reach out to professional help if you are unable to file your Tax Returns properly