The Federal Board of Revenue (FBR) has given banks a deadline of November 30, 2023, to pay 40 per cent additional tax on windfall income, profits, and gains during calendar years 2021 and 2022.
The basis adopted for this purpose is the average earnings of the past 6 years from foreign exchange (FE) minus the current year’s profit, as per accounts, to be taxed @ 40 per cent, a tax expert said explaining the notification.
In this regard, the FBR issued an S.R.O.1588 (l)/ 2023 on Wednesday.
The FBR’s notification said the federal government had specified the banking companies as the sector for section 99D of the Income Tax Ordinance.
The FBR has determined that the method by which the windfall income, profits and gains are required to be computed shall be by the provisions of this notification. The FBR has also specified that the tax rate for the said section 99D shall be 40 per cent.
The scope of windfall income, profits, and gains shall be computed in this SRO for 2021 and 2022, corresponding to tax years 2022 and 2023, respectively, for section 99D.
