Penalty for Late Payment of FBR Challan: A Comprehensive Guide
The Federal Board of Revenue (FBR) is responsible for collecting taxes and enforcing tax laws in Pakistan. Payment of taxes through FBR challans is mandatory for individuals and businesses. However, failure to pay taxes on time can result in penalties. In this article, we will discuss the penalty for late payment of FBR challan.
Late Payment Penalty
According to the Income Tax Ordinance, 2001, and the Sales Tax Act, 1990, late payment of taxes attracts penalties. The penalty for late payment of FBR challan is as follows:
- 5% to 15% of the tax amount for late payment (Section 205 of the Income Tax Ordinance)
- KIBOR (Karachi Interbank Offered Rate) plus 2% per annum for delayed payment (Section 205 of the Income Tax Ordinance)
- Additional 1% to 2% penalty per month or part of a month for late payment (Section 34 of the Sales Tax Act)
Calculation of Penalty
The penalty is calculated based on the tax amount and the number of days delayed. For example:
- Tax amount: PKR 100,000
- Delayed payment: 30 days
- Penalty: 5% of PKR 100,000 (PKR 5,000) + KIBOR + 2% per annum
Consequences of Non-Payment
Non-payment or late payment of FBR challan can lead to:
- Legal action
- Fine and imprisonment
- Freezing of bank accounts
- Suspension of business operations
How to Avoid Penalty
To avoid penalties:
- Pay taxes on time
- File tax returns within the due date
- Use online payment options (e.g., FBR's online portal, bank transfers)
- Consult a tax professional for guidance
Payment of taxes through FBR challans is crucial for compliance with tax laws. Late payment attracts penalties, which can be substantial. Understanding the penalty structure and consequences of non-payment can help individuals and businesses avoid legal issues and financial losses.
Additional Resources
For further information:
- Consult tax professionals or financial advisors
- Contact FBR helpline (111-111-787)
By adhering to tax payment deadlines and understanding the penalty structure, individuals and businesses can ensure compliance and avoid unnecessary financial burdens.
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