On 1 November 2021, the Federal Board of Revenue (FBR) has extended the deadline for digital payments by the corporate sector up to 30 November 2021. In this regard, the FBR has issued an income tax circular 9 of 2021, on the extension in deadline stipulated in section 21 (la) of Income Tax Ordinance-2001.
As provided under the Tax Laws (Third Amendment) Ordinance 2021, any expenditure by a company that exceeds PKR 250,000 in total will not be deductible if made other than by digital means from the business bank account of the taxpayer, with certain exceptions such as for expenditure not exceeding PKR 25,000, utilities, transportation, taxes etc. The FBR initially allowed corporate taxpayers a grace period of 40 days to switch over to the digital mode of payments.
