111(1) (Notice to explain Income / asset)
Please refer to above.
As per definite information available within this office you have made investment of Rs. 6,164,737/ for
the purchase of immoveable property in tax year 2022 in shape of following entry;
01. T2021050xxxx11112683 08-May-2021 902xx09 SUB REGISTRAR, DEPLAPUR A24xx69
01. 3530xxx948289 HAMMAD AHMAD Alternate Delivery Channel WITHHOLDING
TAX PAYMENT 236K Purchase / Transfer of Immovable Property u/s 236K 61,037 6,103,700
TAX PAYMENT 236K Purchase / Transfer of Immovable Property u/s 236K 61,037 6,103,700
Examination of your income tax return filed along with the wealth statement reveals that the
same has not been declare in your wealth statement which attracts the proceedings u/s 111(1)(b) of the
income tax Ordinance 2001 . You are hereby being provided an opportunity that why the amount at Rs.
6,164,737/may not be treated as concealed income and added back to your taxable income/
FBR is looking forward for tax compliance culture in Pakistan.
you may receive this in e-mail
When Do You Receive a Section 111(1) Notice from FBR?
If you have received a 111(1) Notice, it means that FBR is asking you to explain the source of your income, assets, or funds. Here’s what you should do:
1. Review the Notice
- Verify the details: Double-check the notice for specifics like the income discrepancy or source of funds in question. FBR will typically provide details about the transaction or account they are investigating.
- Timeline: Take note of any deadlines for submitting your response.
2. Gather Documents and Evidence
- Support your income: Gather relevant documents such as your bank statements, investment records, salary slips, business records, or any other documents that can substantiate the source of the money.
- Explain large deposits: If the notice relates to large cash deposits, be prepared to explain where the money came from (for example, sales proceeds, loan receipts, inheritance, etc.).
- Tax filings: Ensure that your previous tax returns, if relevant, are available and accurate. Discrepancies between your returns and bank deposits may have triggered the notice.
3. Consult a Tax Professional
- Seek advice: It’s advisable to consult a tax lawyer or a chartered accountant to help you properly address the notice. They can guide you in interpreting the details of the notice and in preparing a proper response.
- Compliance: A tax professional will also ensure that you are in compliance with tax laws and can help you prevent any further legal issues.
4. Respond to FBR
- Clarify the source: If the source of funds is legitimate, you need to explain it clearly. If it involves previously unreported income, you may have to file additional returns or pay taxes on it.
- Submit supporting documents: Provide the documents and explanations requested by the FBR, either through their e-filing system or manually, as per the notice’s instructions.
- Maintain records: Ensure that you keep a copy of all documents and communications you send to FBR for your records.
5. Possible Outcomes
- FBR Acceptance: If FBR accepts your explanation and finds your income or source of funds legitimate, the notice may be resolved without any issues.
- Additional Taxes: If FBR determines that your declared income does not match the actual income or source of funds, you may have to pay additional taxes, fines, or penalties.
- Legal Proceedings: If the matter escalates, there may be further legal actions, including audits, investigations, or even penalties for non-compliance.
6. Be Proactive
- Regular tax filings: Going forward, ensure that your tax filings are accurate and that all income is properly reported to avoid future notices.
- Record keeping: Keep detailed records of your income, expenses, and any transactions, as these can help you defend your position in case of an audit.
In summary, acting promptly and providing a clear, documented explanation is key to resolving a 111(1) Notice from FBR. If in doubt, professional advice is recommended to avoid any legal complications.
You can also read about Got 176(1) (Notice to obtain information or evidence) from FBR – What should you do?