ISLAMABAD: The Federal Board of Revenue (FBR) has enhanced the scope of coal supply by persons engaged in coal mining project in Sindh.
Finance Bill 2025-26 has revealed major legal and procedural changes in the income tax regime for business community on Monday.
The coal supply scope of person engaged in coal mining projects in Sindh has been enhanced. Such person can now supply coal to any sector of economy and pay income tax on income from such supply and also can avail 100 percent tax credit on supply to power generation projects.
The FBR has also reduced period of three years carry forward for adjustment of minimum tax on turnover to two years.
Under the Bill, the powers of Officer of Inland Revenue to work out Fair Market Rent of a domestic or commercial property proposed to be curtailed to the extent of commercial properties. A flat 4% Fair Market Value (FMV) notified rates by Board or Deputy Collector proposed to be annual rental value of commercial properties unless actual rent declared justified through evidence.
It has been proposed that any purchase from an unregistered person will make the purchaser liable, shifting the focus to those buying from the unregulated market. In such cases, 10% of the purchase-related expenditure will be disallowed.
The Bill has proposed that 50% of the expenditure related to purchases will be disallowed in case of payment is received in cash against a single invoiced sale transaction exceeding rupees two hundred thousand by a vendor.
Proportionate depreciation deduction disallowance for the tax year if
withholding tax not deducted by the withholding agent. Disallowed amount will not become part of written down value of such capital assets.
No adjustment of brought forward accumulated business losses available to taxpayer in the first tax year and subsequent tax years under Normal Tax Regime after switching from prior applicable Final Tax Regime.
Under the new law, period of amortization of an intangible asset having undeterminable useful life has been reduced from 25 years to 15 years.
As per new Bill, limitation period of 180 days provided for completing proceedings for amendment of assessment has been withdrawn.
Appeal procedure before appellate fora has been majorly reverted back to the period which was in vogue prior to Tax Laws (Amendment) Act, 2024.
The recovery proceeding for immediate payment or specified time limit in the notice against a taxpayer can only be initiated where the decisions at both the forums i.e. Appellate Tribunal and High Court, are against the taxpayer.
Board power to grant condonation has been restricted to an aggregated period of two years and in the case of huge revenue loss, the same can be extended for a longer period by processing through a committee.
All the entities in a group structure has been made mandatory to derive income chargeable under Normal Tax Regime for availing group relief.
xiv. Table (I) and Table (II) of clause (C66) of Part I of Second Schedule to the Ordinance listing entities granted complete exemption on any income and exemption subject to 100C provision respectively have been merged. Now all entities require approval under 100C to be declared as Non-Profit Organization and availing exemption against income, Finance Bill added.
Copyright Business Recorder, 2025
