Islamabad: The Federal Board of Revenue (FBR) has decided to tax all gifts not received through cross-cheque or banking channels from relatives under the Income Tax Ordinance of 2001 as “income from other sources”, a news source reported. These include gifts given by a spouse, child, grandparent, parent, and sibling. Only a transfer of assets or gifts through cross-cheque or banking channels from the close relatives mentioned will not be taxable.
Analysis of Income Tax Returns filed during the previous year revealed that vast amounts of money and assets were transferred between unrelated people under the label of gifts to avoid taxation, as stated in the Income Tax circular. To prevent this practice, the Income Tax Ordinance has been amended through the Finance Act of 2019.
Additionally, the FBR has authorised commissioners with the power to freeze all domestic assets of suspects for offshore tax evasion who are likely to flee the country. The assets can be frozen for a period of 120 days or till the finalisation of the case. For this purpose, a new clause has been added to the Ordinance through the Finance Act to cover all movable and immovable assets, and income outside Pakistan.
