It is the requirement of Securities and Exchange Commission of Pakistan which is the regulatory body for registration of companies in Pakistan that every company must prepare its annual records on specified date. The period for which the accounts are prepared is called financial year. The period up to which accounts is prepared is called financial year.
Another term for financial year commonly used is called accounting reference period. The first financial year normally starts from the date of incorporation of company. In Pakistan financial year of the companies start from 1st of July and ends on the 30th of June. This is the same year which is taken by the Income Tax Authorities in Pakistan for assessment of Income Tax Year.
The Securities and Exchange Commission of Pakistan also allow the companies to have special tax year on request. Income Tax is calculated based on the performance of the company during the financial year.
The normal procedure for companies in Pakistan at the end of financial year is that at the end of the financial year company prepares its financial statements and calculate the profit earn during the year.
This calculated profit is certified by appointing external auditor. The Securities and Exchange Commission of Pakistan has made the law that if the company registered in Pakistan have the capital of PKR 3,000,000 or more then it is mandatory that they appoint a Chartered Accountant to conduct the audit of the company.
Once the audit is completed the same financial statements are then forwarded to the Income Tax Consultant for preparation of Income Tax Return. The rules for taxation are different from those applied during financial statements prepared using International Accounting Standards.
In Pakistan for companies having financial year ending on June 30 the last date for submission of Income Tax Return is 31st of December same year whereas if the financial year of the company ends on December 31 the last date for submission of Income Tax Return would be 30th of September.
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