People and corporations are supposed to retain tax returns of at least three years. but in the event of overstatements of income exceeding 25 percent, keep them six years. Retention period of seven years on the loss claims or bad debts. Businesses are expected to keep valuable financial records like payrolls or property records within a maximum of ten years. In order to keep digital copies, it is okay to have them clear and accessible. It is also good practice to keep records in order to make them compliant, easier to audit and to have the required documentation to validate legal or financial check when necessary.
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For individuals and businesses, keeping tax records is crucial. Typically, tax returns should be retained for at least three years, but if income was overstated by more than 25%, keep them for six years. Loss claims or bad debts should be kept for seven years, and important financial documents like payroll or property records may need up to ten years. For businesses involved in international operations, such as sea freight from Pakistan to USA, maintaining proper tax and shipping records is especially important for audits, customs compliance, and financial verification. Digital copies are fine as long as they are clear and easily accessible.
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