Fbr directs field formations to dispose of income tax refunds 

The Federal Board of Revenue (Fbr) has directed field formations to dispose of all income tax refunds applications till January 31, 2021.

Sources said that the tax department has issued directions to all Chief Commissioners Inland Revenue with regard to processing of income tax refund applications of tax year 2020.

The payment of refund or adjustment of refund have identical financial impact for the exchequer and therefore, both warrant equal focus and application of mind so that no undue and undetermined refund is either paid out or adjusted to/by the taxpayers. 

In this connection, the data of income tax refund applications have been obtained from field fonnations/PRAL for tax year 2020, and examined. The data transpire that out of the total refund claims of Rs. 74.313 billion in the 2020, 6073 applications covering an amount of Rs. 4.254 billion have been lodged.

It is our institutional stance that current year's refund liability should be paid out of the current year's revenue stream and that no due refunds should be withheld. It would also help us ward off unnecessary complaints against us for delayed processing of refund applications and/or non-payment of refund to the taxpayers. 

Accordingly, all formations are requested to dispose of all applications lodged u/s 170 by January 31, 2021.