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Chapter – VII
Records and Books of Accounts
Part-I
Preliminary
28. Application of Chapter. – (1) The rules in this Chapter apply for the purposes of section 174.
(2) The purpose of this Chapter is to prescribe the minimum level of books of accounts, documents and records to be maintained by taxpayers.
(3) Nothing in this Chapter shall preclude a taxpayer accounting for income chargeable under the head “Income from Business” from
(a) maintaining any books of account, documents or records in addition to those prescribed in these rules;
(b) adding such further columns or particulars in the forms prescribed in these rules for the taxpayer’s own requirement; or
(c) maintaining the books of account, documents or records in the manner prescribed keeping in view the nature of the taxpayer’s business.
Interpretation. – In this Chapter –
(a) “legal practitioner” includes an advocate, pleader, tax practitioner and advisor or consultant on income tax, sales tax, customs, central excise or salt tax laws.
(b) “medical practitioner” includes a doctor, surgeon, physician, dentist, psychiatrist, physiotherapist, tabib, homeopath, vaid, veterinarian and any person practicing medicine under any other name.
Part-II
Books of Account Prescribed
29. Books of account, documents and records to be maintained. – (1) Every taxpayer deriving income chargeable under the head “Income from business” shall maintain proper books of account, documents and records with respect to -
(a) all sums of money received and expended by the taxpayer and the matters in respect of which the receipt and expenditure takes place;
(b) all sales and purchases of goods and all services provided and obtained by the taxpayer;
(c) all assets of the taxpayer;
(d) all liabilities of the taxpayer; and
(e) in case of a taxpayer engaged in assembly, production, processing, manufacturing, mining or like activities, all items of cost relating to the utilization of materials, labour and other inputs.
(2) If a taxpayer uses fiscal electronic cash register or computerized accounting software, it may issue cash-memo/invoice/receipt generated by the electronic cash register or computer.
(3) Duplicate copies and electronic or computer records of the cash-memo / invoice / receipt / patient-slip to be issued under this chapter, shall be retained by the taxpayer and form part of the records to be maintained under this chapter.
(4) The books of account, documents and records to be maintained under this chapter shall be maintained for five years after the end of the tax year to which they relate.
30. In particular, and without prejudice to the generality of the provisions of Rule 29, every taxpayer, other than companies, deriving income chargeable under the head “Income from business” shall issue and maintain the following minimum books of account, documents and records: - (1) Taxpayers with business income upto Rs. 200,000 and new taxpayers deriving income from business (excluding taxpayers to whom sub-rules (2), (3) or (4) apply):
(a) Serially numbered and dated cash-memo / invoice / receipt for each transaction of sale or receipt containing the following: -
(i) taxpayer’s name or the name of his business, address, national tax number and sales tax registration number, if any; and
(ii) the description, quantity and value of goods sold or services rendered;
Provided that where each transaction does not exceed Rs. 100, one or more cash-memos per day for all such transactions may be maintained;
(b) Daily record of receipts, sales, payments, purchases and expenses; a single entry in respect of daily receipts, sales, purchases and different heads of expenses will suffice; and
(c) Vouchers of purchases and expenses.
(2) Taxpayers with business income exceeding Rs. 200,000 (excluding taxpayers to whom sub-rules (1), (3) or (4) apply) and wholesalers, distributors, dealers and commission agents:
(a) Serially numbered and dated cash-memo / invoice / receipt for each transaction of sale or receipt containing the following: -
(i) taxpayer’s name or the name of his business, address, national tax number and sales tax registration number, if any;
(ii) the description, quantity and value of goods sold or services rendered; and
(iii) in case of a wholesaler, distributor, dealer and commission agent, where a single transaction exceeds Rs. 10,000, the name and address of the customer;
Provided that where each transaction does not exceed Rs. 100, one or more cash-memos per day for all such transactions may be maintained;
(b) Cash book and/or bank book or daily record of receipts, sales, payments, purchases and expenses; a single entry in respect of daily receipts, sales, purchases and different heads of expenses will suffice;
(c) General ledger or annual summary of receipts, sales, payments, purchases and expenses under distinctive heads;
(d) Vouchers of purchases and expenses and where a single transaction exceeds Rs. 10,000 with the name and address of the payee; and
(e) Where the taxpayer deals in purchase and sale of goods, quarterly inventory of stock-in-trade showing description, quantity and value.
(3) Professionals (like medical practitioners, legal practitioners, accountants, auditors, architects, engineers etc.): –
(a) Serially numbered and dated patient-slip / invoice / receipt for each transaction of sale or receipt containing the following: -
(i) taxpayer’s name or the name of his business or profession, address, national tax number and sales tax registration number, if any;
(ii) the description, quantity and value of medicines supplied or details of treatment/ case/ services rendered (confidential details are not required) and amount charged; and
(iii) the name and address of the patient / client;
Provided that the condition of recording address of the patient on the patient slip under this clause shall not apply to general medical practitioners;
(b) Daily appointment and engagement diary in respect of clients and patients:
Provided that this clause shall not apply to general medical practitioners;
(c) Daily record of receipts, sales, payments, purchases and expenses; a single entry in respect of daily receipts, sales, purchases and different heads of expenses will suffice; and
(d) Vouchers of purchases and expenses.
(4) Manufacturers (with turnover exceeding Rs. 2.5 million):
(a) Serially numbered and dated cash-memo / invoice / receipt for each transaction of sale or receipt containing the following: -
(i) taxpayer’s name or the name of his business, address, national tax number and sales tax registration number, if any;
(ii) the description, quantity and, value of goods sold;
(iii) where a single transaction exceeds Rs. 10,000 with the name and address of the customer;
(b) Cash book and/or bank book;
(c) Sales day book and sales ledger (where applicable);
(d) Purchases day book and purchase ledger (where applicable);
(e) General ledger;
(f) Vouchers of purchases and expenses and where a single transaction exceeds Rs. 10,000 with the name and address of the payee; and
(g) Stock register of stock-in-trade (major raw materials and finished goods) supported by gate in-ward and outward records and quarterly inventory of all items of stock-in-trade including work-in-process showing description, quantity and value.
31. Every taxpayer deriving income chargeable under the head income from salary, property, capital gains or other sources shall issue and maintain the following minimum documents and records: -
(1) Taxpayers deriving income from Salary:
Salary certificate indicating the amount of salary and tax deducted there from.
(2) Taxpayers deriving income from property:
(a) Tenancy agreement, if executed;
(b) Tenancy termination agreement, if executed;
(c) Receipt for amount of rent received; and
(d) Evidence of deductions claimed in respect of premium paid to insure the building, local rate, tax, charge or cess, ground rent, profit/interest or share in rent on money borrowed, expenditure on collecting the rent, legal services and unpaid rent.
(3) Taxpayers deriving income from capital gains:
(a) Evidence of cost of acquiring the capital asset;
(b) Evidence of deduction for any other costs claimed; and
(c) Evidence in respect of consideration received on disposal of the capital asset.
(4) Taxpayers deriving income from other sources:
(i) Dividends:
Dividend warrants.
(ii) Royalty:
Royalty agreement.
(iii) Profit on debt:
(i) Evidence and detail of profit yielding debt;
(ii) Evidence of profit on debt and tax deducted thereon, like certificate in the prescribed form or bank account statement; and
(iii) Evidence of Zakat deducted, if any.
(iv) Ground rent, rent from the sub-lease of land or building, income from the lease of any building together with plant or machinery and consideration for vacating the possession of a building or part thereof:
(i) Lease agreement; and
(ii) Lease termination agreement.
(v) Annuity or Pension:
Evidence of amount received.
(vi) Prize money on bond, winning from a raffle, lottery or cross word puzzle:
Evidence of income and tax deducted thereon, like certificate in the prescribed form.
(vii) Provision, use or exploitation of property:
Agreement.
(viii) Loan, advance, deposit or gift:
Evidence of mode of receipt of a loan, advance, deposit or gift i.e., by a crossed cheque or through a banking channel.
(ix) General:
Evidence of deduction for any other expenditure claimed.
Part-III
General instructions about maintaining books of accounts,
documents and records
32. General form of books of accounts, documents and records.- (1) The books of accounts, records and other documents required to be maintained by a taxpayer in accordance with this Chapter may be kept on electronic media, provided sufficient steps have been taken to ensure the sanctity and safe keeping of such accounts, documents and records.
(2) The books of accounts, documents and records required to be maintained by a company in accordance with this Chapter shall be maintained in accordance with international accounting standards and as required under the Companies Ordinance, 1984.
33 Books of account, documents and records to be kept at the specified place. – (1) The books of accounts, documents and records required to be maintained by a taxpayer in accordance with this Chapter shall be kept at the place where the taxpayer is carrying on the business or, where the business is carried on in more places than one, at the principal place of business or at each of such places if separate books of accounts are maintained in respect of each place.
(2) Where a person derives income from sources other than from business, the books of accounts, documents and records shall be kept at the person’s place of residence or such other place as may be so declared by such person.
(3) The place or places where the books of accounts, documents and records are kept shall be clearly stated on the tax return form in the column requiring the details of the records maintained.
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