Section 170 of the Income Tax Ordinance 2001 deals with tax refund. If you have paid tax in excess of the amount which was properly chargeable under this Ordinance for the relevant tax period, you may apply to the Commissioner for a refund of the excess amount paid as tax.
Overview of Section 170
Section 170 of the Income Tax Ordinance, 2001, allows taxpayers to reclaim excess tax payments. This can occur due to overpayment, excess withholding, or other circumstances.
The Refund Process
- Initiate the Claim: File an application in the prescribed form, verified, and submitted to the Commissioner of Inland Revenue within three years from the tax year’s end.
- Commissioner’s Role: The Commissioner processes the application within 45 days, applying any overpayment to reduce other tax dues or liabilities, with the remaining amount refunded.
- Refund Voucher: Issued within three months of the refund order. Delays may entitle you to compensation under Section 171.
Steps to Claim Your Refund
- Review Tax Payments: Identify any overpayments.
- Prepare Application: Complete accurately with all necessary verifications.
- Submit Application: Within the three-year timeframe.
- Monitor Progress: Follow up on the application status.
- Receive Refund Voucher: Within three months post-refund order.
Compensation for Delayed Refunds
Compensation for delays beyond the specified period is calculated at KIBOR plus 0.5% per annum, starting after the three-month period until the refund is paid.
What is the time frame to apply for Refund?
An application for a refund under shall be made within three years of whichever is later –
1: the date on which the Commissioner has issued the assessment order for the tax year to which the refund application relates; or
2: the date on which the tax was paid.
Who is entitled to apply for tax refund?
If you have paid tax in excess of the amount which was actually chargeable under this Ordinance for the relevant tax period, then you are eligible for a tax refund.
How can you apply for tax refund ?
You can apply online by logging in to IRIS.
Before applying for a tax refund you must have your “Primary bank account” mentioned in your profile.
To whom you may apply for tax refund?
You may apply to the Commissioner for a refund of the tax amount paid in excess of what actually you were liable to pay.
How you can receive Tax refund?
You can receive a tax refund directly in the bank account mentioned in your profile on IRIS.
Expert Assistance at ABH Consultants Islamabad
Navigating tax refunds can be complex. At ABH Consultants Islamabad, our expert tax consultants guide you through every step, from identifying refund opportunities to submitting applications and following up with tax authorities. Contact us to maximize your tax refunds while ensuring compliance with Pakistani tax laws.
Reach out to help if you are unable to file your Tax Returns Properly