It was mentioned that companies will be required to make digital payments from business bank accounts for transactions exceeding Rs. 250,000. The Federal Board of Revenue (FBR) has extended the deadline for converting the corporate sector to digital payments by one more month. The FBR is extending the deadline for digital payments to December 31, 2021, according to a notification issued by the tax department on Wednesday. It should be noted that the FBR had earlier extended the deadline till November 30.
Tax Laws
It is relatable to mention here that the government had amended the Tax Laws (Third Amendment) Ordinance, 2021, which defined all companies, as defined under section 80 (2) (b) of the Ordinance. , Is responsible for using digital mode. Payment to your vendors from business bank accounts for transactions above Rs. 250,000, non-digital transactions will not be accepted as valid expenses in case of failure to do so.
40-day Grace Period
The 40-day grace period for switching to a digital mode of payment expired on October 31. The FBR allowed corporate taxpayers a 40-day grace period to switch to digital modes of payment. 1 November 2021 under the Tax Laws (Third Amendment) Ordinance, 2021.
According to the circular, exercising the powers vested in it under Section 214A of the Income Tax Ordinance 2001 and taking note of the various representations filed by the taxpayers, the FBR Has extended the deadline for digital payments. Ordinance of November 30, 2021.
The business community has repeatedly asked the FBR to clarify which payments fall into the “digital mode” category.
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