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Income tax returns are forms where assessees provide details about their income and taxes to the tax authorities. Filing a belated return can lead to the disallowance of carrying forward certain losses, making it crucial to file your tax return annually. This process determines whether additional taxes are owed beyond what has already been paid to the federal government, or if a refund is due.
For employees with regular paychecks, taxes are typically withheld by the employer. However, your payroll withholding may not always be accurate. Decisions made during the setup of payroll withholding could result in either underpayment or overpayment of taxes. Furthermore, you may be eligible for tax deductions or credits that can reduce your liability, potentially resulting in a refund. On the other hand, if you have additional income not reflected in your paycheck, you may owe more taxes.
Before registering and filing your income tax return, it’s advisable to familiarize yourself with some basic concepts:
The total income after deductions such as qualifying donations and certain allowances.
The sum of all income chargeable to tax under each head of income.
Income is classified under five main heads:
An individual is considered a resident if they spend 183 days or more in Pakistan during the tax year, or if they meet specific criteria outlined in the Income Tax Ordinance, 2001.
A person, company, or association of persons who do not meet the residency criteria.
Income is categorized into various sources, such as salary received in Pakistan, profit on debt from a resident person, rental income from property in Pakistan, and pension or annuity paid by a resident or permanent establishment of a non-resident.
Is any Income, which is not a Source of Income from Pakistan.
Includes a firm (the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all), a Hindu undivided family, any artificial juridical person and any body of persons formed under a foreign law, but does not include a Company.
Means any period of twelve months and is denoted by the calendar year relevant to the Normal Tax Year in which closing date of the Special Tax Year falls. For example, Tax Year for the period of twelve months from January 01, 2017 to December 31, 2017 shall be denoted by calendar year 2018 and the period of twelve months from October 01, 2017 to September 30, 2018 shall be denoted by calendar year 2019.
The first step of filing your Income Tax Return is to register yourself with Federal Board of Revenue (FBR).
For Income Tax Registration Individual can register online through Iris Portal
Whereas, the principal officer of AOP and Company needs to visit Regional Tax Office (RTO)
Some important facts about Registration
An individual, a company and an association of persons (AOP) or foreign national shall be treated as registered, when they are e-enrolled on the portal of Iris.
E-Enrollment with FBR provides you with a National Tax Number (NTN) or Registration Number and password.
In case of individuals, 13 digits Computerized National Identity Card (CNIC) will be used as NTN or Registration Number.
NTN or Registration Number for AOP and Company is the 7 digits NTN received after e-enrollment.
An individual needs to ensure that the following information is available before starting the e-enrollment.
Requirements of e-enrollment for an individual are as follows:
Principal Officer of the Company and AOP needs to ensure that the following information is available before starting e-enrollment.
Following particulars are required for registration:
Requirements for Registration of Non-Resident Company having permanent establishment in Pakistan shall furnish the following particulars:
Non-Resident Company not having permanent establishment in Pakistan shall furnish the following particulars:
Online registration is available only for:
Before starting online registration, Taxpayer must have:
Registration at Facilitation Counters of Tax are available for all:
Income Tax Registration of an individual can be updated if there is any change or omission in the information, particulars, data, or documents associated with the registration.
To update these details, the individual must file a modification form of registration in the Iris system.
The Commissioner will review the modification form, conduct necessary inquiries, and either approve or deny the requested updates.
If the modification request is denied, the individual may file a representation before the Chief Commissioner within thirty (30) days of the decision. The Chief Commissioner will then decide the matter on its merits.
The Commissioner may cancel a taxpayer's Income Tax Registration through a written order, provided there is no outstanding liability and all relevant information, particulars, data, or documents support such a cancellation.
If there is a change in name, address, or other details stated in the registration certificate, the registered individual must notify the RTO within fourteen (14) days using the prescribed form.
Changes in business category will be allowed after the RTO verifies the manufacturing facility and confirms its status as an industrial consumer of electricity and gas distribution companies.
Individuals can update their registration information in three ways:
First-time filers must register before accessing the portal. If you have an NTN or Registration Number but no credentials, use the 'E-enrollment for Registered Person' option.
For password resets or updates, use the 'Forgot Password' or 'Change Password' options on the Iris login screen.
To successfully complete the return, ensure the Income Tax Return form and Wealth Statement are filled out and moved from the Draft folder to Completed Task in Iris.
E-enrollment with Federal Board of Revenue (FBR) provides you with NTN or Registration Number and password. You can login to Iris by entering your NTN or Registration Number and password.
If you need to reset your password to gain access to Iris, you can click ‘Forgot Password’ on the Iris login screen. Enter all the data in the required fields. Codes will be sent to your email address and mobile number. Enter the codes in the provided fields. A new window will open in which you will be given option to reset your password.
Password can be changed by logging into Iris and clicking ‘Change Password’ on the top right of the screen. Enter the required information in the dialog box opened.
To complete online Income Tax Return a person must complete the Return of Income form and Wealth Statement (statement of assets & liabilities) form.
To facilitate the taxpayers, FBR's Knowledge Base Portal provides step by step written and video guides on filing Income Tax Return and Wealth Statement.
Successful submission of Income Tax Return and Wealth Statement in Iris is confirmed when both the forms have moved from the Draft folder to Completed Task.
Wealth Statement will only be successfully submitted, once current year’s wealth has increased/decreased from previous year’s wealth by the same amount as your income has exceeded/fallen short of your expenses. Failure to reconcile wealth statement won’t allow you to submit your Income Tax Return.
To facilitate salaried person in filing their Income Tax Return, Declaration form 114(I) has been provided. Salaried person would need to complete the Declaration form 114(I) in order to successfully submit their Income Tax Return.
Pin can be changed by logging into Iris and clicking ‘Change Pin’ near the top of the screen. Enter the required information in the dialog box opened.
An Income Tax Return can be revised within five (5) years of being originally filed to correct any omission or wrong statement discovered later on.
In order to revise the Income Tax Return filed, one has to file an application for revision in Iris. After approval of your application you can file a revised Income Tax Return in Iris.
A Wealth Statement (statement of assets and liabilities) can be revised in Iris before receipt of the notice under sub-section (9) of section 122 of the Income Tax Ordinance, 2001 without the need to file an application seeking approval for revision.
To file the online Income Tax Return after due date you would still have to complete the filing of Income Tax Return as described above.
Persons having taxable income are bound to keep Income Tax Return records for six (6) years.
You can avail Tax Credits, Rebates and Exemptions only if you are an Active Taxpayer.
By not filing your Income Tax Return in spite of having taxable income, you will be liable to the penalty and prosecution under the provisions of Income Tax Ordinance 2001. Your personal information is not disclosed to anyone except the tax officials.
If you are filing your Income Tax Return manually then you may download the same here:
A person will have to take relevant documents to RTO in order to successfully change details regarding Income Tax Registration.
The Active Taxpayer List (ATL) is a central record of online Income Tax Return filers for the previous Tax Year.
The ATL is published annually on the 1st of March and remains valid until the last day of February of the following financial year. For instance, the ATL for the Tax Year 2017 was published on 1st March 2018 and remained valid until 28th February 2019. Similarly, the ATL for the Tax Year 2018 was published on 1st March 2019 and was valid until 28th February 2020.
The ATL is updated on every Monday on the Federal Board of Revenue (FBR) website.
To appear on the current ATL, an individual or entity must have filed their Income Tax Return for the relevant tax year. For example, to be included in the ATL published on 1st March 2018, the Tax Return for the Tax Year 2017 must have been filed. Similarly, inclusion in the ATL published on 1st March 2019 required filing the Tax Return for the Tax Year 2018.
A restriction was introduced through the Finance Act, 2018, which excludes individuals from the ATL if they fail to file their Tax Return by the due date specified by the Income Tax authorities. For example, to be included in the ATL published on 1st March 2019, the Tax Return for the Tax Year 2018 had to be filed by the specified due date.
However, the Finance Act, 2019, amended this restriction, allowing individuals to be included in the ATL even if they filed their Tax Return after the specified due date.
Furthermore, a surcharge for placement on ATL after due date of filing of Tax Return will be charged as under:
A company or an AOP shall be included in the ATL, whose return is not to be filed due to incorporation or formation after 30th day of June relevant to the Tax year pertaining to the ATL.
Joint account holders as an entity shall be deemed to be part of ATL if any of the persons in the joint account have met the criteria of being included in the ATL.
Bank account held in the name of a minor shall be considered part of ATL if the parents, guardians of the minor or any person who has deposited money in minor’s account are deemed to have met the criteria of being included in the ATL.
Filers who delayed the submission of their Income Tax Return for the Tax Year 2018 can pay the "Surcharge for ATL" as outlined under Section 182(A) of the Income Tax Ordinance, 2001. This can be done by selecting the Tax Payment Nature “Misc” head in the PSID.
Only after the payment of the surcharge will the name of the late filer be included in the ATL.
Active Taxpayer status can be verified in the following ways:
The ATL Status Check allows you to confirm your Active Taxpayer status.
Check Individual’s Active Taxpayer status by SMS through the following procedure:
Check AJ&K Active Taxpayer status by SMS through the following procedure:
For Individual, type AJKATL (space) CNIC (without dashes). Send it to 9966. Having NTN AJKATL (space) 11 digit NTN (without dashes). Send it to 9966.
You can also download ATL from:
Active Taxpayer List (Income Tax)
The Active Tax Payer's List of AJK is to be considered at par with the ATL (Income Tax) after amendment in the Income Tax Ordinance 2001 through Finance Act 2018.
Being on the ATL gives you certain benefits:
Applicable Withholding Tax Rates (Updated up to June 30, 2019)
In order to pay your Income Tax dues, the person has to log into eFile.
You can log into efile by using the same credentials you used to log into Iris. After logging into the efile, the person has to access the e-Payments tab.
In the e-Payments tab, the person will access Create Payment and then select Income Tax Annual Return option.
In the e-Payments tab, the person will access Create Payment and then selectThe resulting selection will lead you to Income Tax e-Payment page. On this page a payment slip (PSID) will be created by Income Tax Annual Return option.
Confirm the e-Payment created. This will successfully create your e-Payment slip. The e-Payment slip can be deposited in any National Bank (NBP) / State Bank (SBP) branch. Select the nearest city where you want to deposit the payment slip from the drop down list.
Click the print button to download the PSID on your computer. Deposit the PSID in any of the available branches of the city of your choice.
Computerized Payment Receipt (CPR) is generated after paying the tax due. This is reflected in Iris within 24 hours of depositing the payment.
Tax payable is to be made on or before the designated Income Tax due date for each person.
Kindly refer to the User Guide in order to make your tax payment through Alternate Delivery Channels (ADC) such as ATMs and Internet Banking.
Failure to pay tax payable on due date will attract penalty or default surcharge or both. Failure to make payment on your tax dues is an offence punishable on conviction with a fine or imprisonment for a term not exceeding one year or both.
The late filers of Income Tax Return for Tax Year 2018 can pay “Surcharge for ATL” as defined under section 182(A) of Income Tax Ordinance 2001 by clicking on Tax Payment Nature “Misc” head in the PSID.
Income Tax Return relates to a specific tax year. A tax year is a period of twelve months ending on 30th day of June i.e. the financial year and is denoted by the calendar year in which the said date falls. For example tax year 2017, covers a period from 1st July 2016 to 30th June 2017.
Tax year includes special tax year, which means any period of twelve months and is denoted by the calendar year relevant to the normal tax year in which closing date of the special tax year falls. For example, tax year for the period of twelve months from January 01, 2016 to December 31, 2016 shall be denoted by calendar year 2017 and the period of twelve months from October 01, 2016 to September 30, 2017 shall be denoted by calendar year 2018.
Refund can be only claimed if the person has filed their Income Tax Return electronically. A manual Return does not entitle you to a refund.
The refund amount should be clearly reflected in your Income Tax Return in Iris.
Refund resulting from the Income Tax Return can be claimed by filing a separate application in Iris. To check the status of your application, please visit your relevant Regional Tax Office (RTO).
The refund can also be claimed later on after submitting your Income Tax Return, but within two years from the date of filling of return (date of assessment) or from the date on which the tax was paid, whichever is later.
However, persons filing Tax Return for Tax year after the specified due date will not be entitled to refund during the period the person is not included in ATL and Income Tax authorities will not incur any liability of compensation for delayed refund for the period the person is not appearing in ATL and such period shall not be counted for the purpose of computing additional payment for delayed refund.
Most appeals arise on account of disagreement between the taxpayer and the tax collectors (Inland Revenue department) regarding the quantification of the taxable income and tax liability thereon as well as levy of default surcharge, penalties, etc.
Any person dissatisfied with any order passed by a Commissioner/Officer Inland Revenue has the right of appeal.
In case of an Individual, the Individual himself; in case of an Association of Person (AOP), any partner or member of the association; and in case of a Company the principal officer.
In case of a deceased individual, the legal representatives of the deceased; and in case of an individual under legal disability or a nonresident person, his/her/it’s “representative”.
In order to make an appeal person has to submit the tax due along with the return of income, on the basis of income declared.
Time limit for filing an appeal before the Commissioner (appeals) is thirty (30) days from the date of receipt of notice of demand relating to an assessment, penalty or any other order.