A Comprehensive Guide to Frequently Asked Questions, Including Deemed Tax Certificate, Verification, Valuation, Filing, Open Files, and Non-Resident Person.
Description:
In this video, we will provide a comprehensive guide to the 7E section of the Income Tax Act, covering some of the most frequently asked questions, including: What is the 7E section? The 7E section of the Income Tax Act deals with deemed income from capital assets. Deemed income is income that is not explicitly mentioned in the Act but is considered taxable nonetheless. In the case of the 7E section, deemed income refers to the income that is deemed to have been accrued from the transfer of certain capital assets, even if the transfer has not actually taken place.
What is a Deemed Tax Certificate in FBR IRIS Pakistan?
A Deemed Tax Certificate is a certificate issued by the Income Tax Department that certifies that the deemed income tax has been paid on the transfer of a capital asset. This certificate is required to be submitted to the registering authority at the time of registering the transfer.
How to verify a Deemed Tax Certificate online in FBR?
To verify a Deemed Tax Certificate online, you can visit the website of the Income Tax Department and go to the “e-Verification” section. Here, you will need to enter the certificate number and the date of issue. The website will then display the certificate details, which you can verify against the original certificate.
What is the High Court Order W.P.S.?
The High Court Order W.P.S. is a landmark order issued by the lahore High Court. This order clarified that the valuation of capital assets for the purpose of the 7E section should be done on the basis of cost price, and not market value. What does valuation on cost mean? Valuation on cost means that the value of a capital asset for the purpose of the 7E section should be determined based on the original purchase price of the asset, plus any subsequent capital expenditure incurred on the asset.
Who needs to file 7E?
Any person who transfers a capital asset that is covered by the 7E section is required to file a 7E return. This includes the transfer of immovable property, agricultural land, and shares in a company.
How to treat open files and non-resident persons under 7E?
Open files refer to the cases where the transfer of a capital asset has taken place but the 7E return has not yet been filed. In such cases, the taxpayer is required to file the return as soon as possible and pay the applicable deemed income tax. Non-resident persons are not required to file a 7E return as per Law However, non-resident persons can apply are exemption certificate from the category other & then type reason non resident
We hope this video has been helpful. If you have any further questions about the 7E section, please leave a comment below.
Additional Information:
In addition to the above, here are some other important points to note about the 7E section: The 7E section applies to all capital assets, regardless of whether they are held for business or personal purposes. The deemed income tax is calculated at a rate of 20% of the difference between the fair market value of the capital asset and the cost price of the asset.