What Is a Tax Return?

A tax return is a form or forms filed with a tax authority that reports income, expenses, and other pertinent tax information. Tax returns allow taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes. In most countries, tax returns must be filed annually for an individual or business with reportable income, including wages, interest, dividends, capital gains, or other profits.

Why Tax Return?

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A tax return is a documentation filed with a tax authority that reports income, expenses, and other relevant financial information.

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In most places, tax returns must be filed annually.

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On tax returns, taxpayers calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes.

Benefits of Tax Return

  • In comparison to non-filers, taxpayers are only obligated to pay half of the withholding tax.
  • A non-filer is prohibited from possessing a property worth more than PKR 50 lakh, however those who file tax returns on a regular basis are allowed to buy any property.
  • Importers of raw materials who are not tax filers must pay 8% on the entire import, whereas tax filers must pay 5.5% on raw material imports.
  • Non-filer exporters in Pakistan are required to pay a 9% custom on commercial exports. Taxpayers, on the other hand, are only required to pay a 6% tax on commercial exports.
  • Non-filers must pay a total of 20% tax on dividends (business profit), compared to a 15% tax rate for filers.
  • In Pakistan, non-filers must pay a 15% tax on bank and savings scheme profits, compared to a 10% tax paid by active taxpayers.
  • Non-filers pay a 25% tax on prize money won through a prize bond, whereas tax filers pay only 15%.
  • Property transfer tax is merely 1% for people who submit regular income tax returns, compared to 2% for non-filers.
  • Tax filers pay just 10% tax in Pakistan, compared to 15% tax paid by non-filers, whether the auction is conducted by the government or by a private organisation.