Introducing a new family category to reduce the tax filing burden of the government

The government has decided to introduce a new family category to reduce tax filing burden.

The government is set to introduce new measures to address the concerns of people not required to file tax returns such as housewives, people with annual income below Rs 6 lakh and overseas Pakistanis.

According to media reports, a new family category will exempt dependents from filing tax returns, while those earning less than the threshold or living abroad will also avoid penalties such as SIM blocks or travel bans. The aim is to prevent these citizens from being unfairly penalized as the government tries to eliminate the non-filer category.

The move comes in response to the growing number of zero-return filings, which have crossed 2.5 lakh and account for nearly 70 per cent of all returns filed in the tax year 2023.

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The proposed system would introduce a new definition of family in the Income Tax Act, allowing a wife, a son under 25 and an unmarried daughter to benefit from the filing status of the husband or father.

This provision would enable family members to make financial transactions, such as in real estate and financial investments, using the tax filer status of the husband or father.

This measure is designed to relieve many housewives from the obligation to file tax returns, especially when their main source of income is their spouses, however, the loans made under this arrangement Deduction will be limited to the income declared by the filer in previous tax returns.

The reference values ​​will be based on the income declared in the previous tax filings of the husband or father, in cases where a woman earns income and her husband is financially dependent on her, the same rules as husband’s wife’s will apply. Allow investment within the indicated income limits.