The Federal Board of Revenue (FBR) has set a November 30, 2023 deadline for banks to pay an extra 40% tax on windfall income, earnings, and gains accruing in calendar years 2021 and 2022.
The Federal Government has designated banking firms as the sector for the purposes of section 99D of the Income Tax Ordinance, according to S.R.O.1588 (l)/2023 published by the FBR on Wednesday.
The FBR has concluded that the procedure for calculating windfall income, profits, and gains must be in conformity with the conditions of this notification. The FBR has additionally determined that the tax rate for the purposes of section 99D will be 40%.
For the purposes of section 99D, the scope of windfall income, profits, and gains shall be as determined in this SRO for the calendar years 2021 and 2022, corresponding to tax years 2022 and 2023, respectively.
The FBR has set November 30, 2023, as the date by which the additional tax for the purposes of section 99D must be paid, or within such extended period not exceeding fifteen days as the Commissioner may allow, for reasons to be recorded in writing, on an application in writing by the taxpayer for a date extension.
The FBR has mandated that the extra tax be paid in the federal treasury using a stipulated challan or digital payment receipt.
The windfall income, profits, and gains will be calculated in line with the formula, according to the FBR.