In Pakistan, all taxpayers, whether individuals or businesses are required to file their tax returns every year. A tax return is a document that outlines an individual's or business's income, deductions, and tax liability for the year. However, there may be situations where a taxpayer has no income or tax liability, in which case they may file a Null or Zero return.
A Null or Zero return is a tax return filed to inform the tax authorities that the taxpayer had no taxable income or tax liability during the tax year. In Pakistan, taxpayers can file a Null or Zero return online through the Federal Board of Revenue's (FBR) Tax Asaan mobile application or the FBR's online portal. This blog will provide an overview of how to file a Null or Zero return in Pakistan.
What Is A Null Or Zero Return?
A null or zero return is a tax return that shows no taxable income or tax liability. It is filed by taxpayers who did not earn any taxable income or who have no tax liability for a particular tax year. Filing a null or zero return indicates to the tax authorities that the taxpayer has met their tax obligations for that year.
Why Is It Important To File A Null Or Zero Return?
Even if you did not earn any taxable income or have no tax liability, it is important to file a null or zero return for the following reasons:
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Compliance with the Law: According to the Income Tax Ordinance, 2001, every taxpayer is required to file a tax return, whether they have taxable income or not. Failing to file a null or zero return can result in penalties and legal consequences.
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Future Tax Benefits: Filing a null or zero return can help you in the future when you start earning taxable income. It can help you establish a tax history, which can be beneficial in getting loans or credit from financial institutions.
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Avoiding Tax Notices: Filing a null or zero return can also prevent you from receiving unnecessary tax notices from the tax authorities.
How To File A Null Or Zero Return In Pakistan?
Filing a null or zero return in Pakistan is a simple process. Here are the steps you need to follow:
Step 1: Register For A Taxpayer Identification Number (NTN)
Before filing a Null or Zero return, a taxpayer must first obtain a Taxpayer Identification Number (NTN) from the Federal Board of Revenue. The NTN is a unique identifier assigned to each taxpayer, and it is required for all tax-related transactions in Pakistan.
To obtain an NTN, the taxpayer must submit an application to the FBR along with the required documents, such as a copy of their CNIC or passport, bank statement, and utility bills. The FBR will review the application and issue an NTN within a few days.
Step 2: Access FBR's Online Portal
Once the taxpayer has obtained their NTN, they can access the FBR's online portal to file their Null or Zero return. The portal can be accessed by visiting the FBR's website and clicking on the "e-Services" tab.
Step 3: Select The "Return Forms" Option
After accessing the FBR's online portal, the taxpayer should select the "Return Forms" option from the main menu. The Return Forms section will provide the taxpayer with a list of different tax forms, including the Null or Zero return form.
Step 4: Select The Null Or Zero Return Form
From the list of tax forms, the taxpayer should select the Null or Zero return form, which is designated as "Form NTN-2A". The taxpayer should then fill out the form with their personal and tax-related information.
Step 5: Submit The Null Or Zero Return Form
Once the taxpayer has filled out the Null or Zero return form, they can submit it online through the FBR's online portal. The taxpayer should review the form to ensure that all the information is accurate and complete before submitting it. After submitting the form, the FBR will send a confirmation receipt to the taxpayer's registered email address.
Step 6: Keep A Copy Of The Null Or Zero Return Form
After submitting the Null or Zero return form, the taxpayer should keep a copy of the form for their records. The FBR may request the taxpayer to provide a copy of their Null or Zero return in the future, and it is important to have a copy of the form for reference.
Conclusion:
In conclusion, filing a Null or Zero return in Pakistan is a straightforward process that can be completed online through the FBR's online portal. The process involves obtaining an NTN, accessing the FBR's online portal, selecting the Null or Zero return form, filling out the form, submitting the form, and keeping a copy of the form for reference. By filing a Null or Zero return, taxpayers can fulfill their tax obligations and avoid any penalties or fines for failing to file a tax return.
