How to prepare and file tax returns in Pakistan

Introduction

Filing tax returns is a legal obligation and civic duty for individuals and businesses in Pakistan. It is essential for compliance with the Income Tax Ordinance, 2001, and is required to maintain Active Taxpayer (ATL) status, avoid penalties, and gain access to numerous financial and legal benefits. With the Federal Board of Revenue (FBR) transitioning to digital platforms, tax filing has become more accessible—but still requires understanding the right process and documentation.

Who Must File a Tax Return in Pakistan

According to FBR, the following individuals and entities must file a tax return annually:

• Salaried persons earning more than PKR 600,000/year

• Business individuals or AOPs with income above PKR 400,000/year

• Companies registered with SECP

• Anyone owning immovable property, motor vehicles, or receiving foreign income

• Anyone claiming tax refunds or filing wealth statements

Benefits of Filing a Tax Return

• ATL Status: Reduces withholding tax rates

• Banking Benefits: Required for opening business accounts

• Visa and Loan Applications: Required for embassies and banks

• Tax Refunds: Claim refunds for excess tax deductions

• Legal Compliance: Avoid fines and legal notices from FBR

Documents Required to File Income Tax Returns

For Salaried Individuals

• CNIC

• Salary certificate or payslips

• Bank statements

• Tax deduction certificate

• Investment records

• Property and asset details

For Business Owners/AOPs

• CNIC and NTN

• Invoices and bills

• Expense records

• Rent agreements and bank statements

• Utility bills

• Advance tax payment records

For Companies

• Audited accounts

• NTN and SECP registration

• Tax challans

• Withholding statements

Step-by-Step Guide to File Tax Returns in Pakistan

Step 1: Register for an FBR Account

Visit https://iris.fbr.gov.pk and register using your CNIC, email, and mobile number.

Step 2: Log in to IRIS

Log in using CNIC and password. Update personal and contact details.

Step 3: Select the Relevant Tax Year

Choose the tax year for which you are filing (e.g., income from July 2022–June 2023 is filed under Tax Year 2023).

Step 4: Prepare Your Income Tax Return

For Salaried Individuals

Declare salary income, deductions, investments, and any other income.

For Business Individuals/AOPs

Declare business income, expenses, and applicable deductions.

For Companies

Fill in corporate revenue, financials, tax deductions, and attach audited statements.

Step 5: File Wealth Statement

Declare assets, liabilities, and reconciliation of net wealth with prior year.

Step 6: Review and Validate Entries

Check all data, correct errors, and validate before submission.

Step 7: Pay Tax (if applicable)

Generate PSID, pay through bank or online, and upload the CPR to IRIS.

Step 8: Submit and Acknowledge

Submit the return and wealth statement. Download acknowledgment for records.

Important Dates and Deadlines

Common Mistakes to Avoid

• Skipping wealth statement

• Incorrect salary or income details

• Forgetting to declare bank profit or tax credits

• Failure to pay due tax before filing

• Not submitting return after validation

How to Check Active Taxpayer Status (ATL)

Visit https://www.fbr.gov.pk/atl and enter your CNIC or NTN to verify ATL status. ATL is updated every Monday.

Filing Tax Returns for Previous Years

You can file late returns with a penalty under Section 114(6). However, ATL benefits may not apply immediately.

Hiring a Tax Consultant – When and Why

• Multiple income sources

• Claiming tax refunds

• Business audits or FBR notices

• Missed previous years

• Complex deductions or credits

Recent Developments in Tax Filing (2024–2025)

• Launch of Tax Asaan mobile app

• Auto-import of salary and bank data

• CNIC-based verification with OTP

• Digital receipts and challan uploads

• Real-time taxpayer dashboard and alerts

Conclusion

Filing income tax returns in Pakistan is easier than ever, thanks to FBR’s digital systems. Whether you’re a salaried individual, business owner, or company, timely and accurate filing protects you from penalties and gives access to legal and financial benefits. Stay compliant, keep records, and consult a professional when needed to ensure your filings are error-free.