At the time that Pakistan’s tax-plunged terrains shift toward new horizons, compliance is not just submitting returns. But ensuring what is submitted is precise and real! With the filing deadline for Tax Year 2025 just around the corner on September 30, a new glitch has arisen. As per details, the PBC has reported a ‘flag error in tax credit calculation’ at the FBRs IRIS portal. It has been blocking urgent calls from the business community as well. This red flag raised by the Pakistan Business Council (PBC) demonstrates a broader picture of tax computation issues in Pakistan. It could cause filing delays and inflated liabilities for thousands. You are not the first to wrestle with a deduction of conundrum when it comes to making donations or paid contributions to your pension. Let’s break it down.
What is the IRIS Portal, and Why Does It Matter?
IRIS, The E-Portal Backbone of Pakistan’s Tax System Federal Board of Revenue (FBR) has introduced its digital backbone for taxpayers, i.e., IRIS. Introduced to simplify e-filing, it enables individual taxpayers, association of persons (AOP) and companies to file income tax return. Also, wealth statements and other documents electronically through a single portal. Debuts for Tax Year 2025 with IRIS 2.0, where new technology would allow us all to file seamlessly with simpler forms and real time verifications. As you learn every day from machines, it is always safe to trust machines but that never happens without more than a few prologue hiccups.
IRIS handles all salaried tax slabs to complicated deductions and is crucial for over three million working filers. But when it’s not perfect, they percolate through. An ostensibly simple thing turns into a nightmare. This is where the PBC flags math error on FBR’s IRIS Portal falls under legal scan, not only a technical bug.
The Core Issue
The PBC wrote to FBR Chairman Rashid Mahmood on October 8, 2025, to alert him that a serious flaw has been discovered in processing of tax credits under Sections 61 and 63 of the Income Tax Ordinance, 2001 through IRIS. For the most part, this is due to the way that IRIS calculates credits donations at Section 61 and pension fund contributions of an approved variety in section 63. These sections provide that a taxpayer is entitled to claim credits for payments equal to a percentage of the “total tax assessed” explicitly including the super tax surcharge under section 4C.
IRIS is completely unwilling to have anything to do with that surcharge when calculating its return. This discrepancy translates into filers receiving less than what is owed under law, due to above-penalty liabilities and delays in filing. The PBC notes that these hits the “highly skilled professionals, generous donors and active investors in voluntary pension funds” hardest of all, including member companies. That is not a minor oversight with the filing deadline ready to slam shut; but a barrier to compliance.
Tax Calculation Issues
The tax calculation mistake in IRIS has been the bane of the system and bodies like the Karachi Tax Bar Association have over the years raised alarm. Filers faced lower rates on contract receipts in 2022 pursuant to section 153 (at 7% versus 7.5%) and wrong taxes levied on gains. It is from immovable property under section 37(1A) along with an erroneous cap on Bahbood Certificate yields under the second schedule. Fast forward to 2025 and some of the same difficulties persist: IRIS does not set aside donation credits against surcharges under section 60 and 4AB, treats some amounts raised as final tax with no entitlement to adjust.
For everyone from salaried workers to businesses that pay taxes, these are bugs that lead to manual overreactions. One that may be more expensive in filing season. FBR’s response? Most of the time with no extensions even after pleading.
Unpacking the Reasons for Errors in Tax Calculation
These are some of the reasons taxes could be wrong, especially where tax is calculated by using a computerized system:
- Software Failures/Coding Errors: The portal algorithm may be making an error in new tax law changes or credit data.
- Insufficient Synchronized Data: It may be that if the taxpayer’s complete data is not synchronized, credits cannot be computed correctly.
- Updates of Law & Regulations: Pakistan’s tax laws and finance acts get updated from time to time. IRIS: Absence of regularly up-to-date information on IRIS may lead to obsolete calculations.
- User Entry Error: Taxpayers can input the data wrong or forget to populate a field, which is then processed through the system incorrectly.
These are not “bugs” as errors in tax calculation. Instead, they’re the difference between the policy intent and what gets implemented digitally. These days, fewer businesses will be able to rely on that period. “Filers lose immediately without 90-day grace periods after fixes,” as PTBA noted in 2023.
How to Mitigate the Impact:
Do not let these obstacles get in your way. Just in case you were also wondering, here is how to deal with PBC flags error in tax credit calculation on FBR’s IRIS Portal:
- Double-Check Inputs: Utilize FBR’s official salary tax calculator for a double-check of the form before applying in order to identify any discrepancies. Check the add on charges manually for Section 61/63 claims.
- Get Professional Help:Hire a tax professional who understands IRIS overrides. KTBA and PTBA members guide you on what to avoid.
- Document Everything: Ensure to screenshot the errors you are facing and maintain a record of your communications with FBR helpline (051-111-772-772). If delayed, refer to the appeals to the PBC letter.
- Monitor Changes: We will wait for advance notices from FBR as well as IRIS FAQs and changes for applying patches. The system is still operational, as of October 2025; however, maintaining vigilance is important.
- Advocate for Change: Support PBC and KTBA petitions demanding systemic changes such as live error alerts and beta testing of updates.
CBM Accounting Playing a Major Role:
CBM Consultants plays a major role in addressing and rectification of errors, FBR’s IRIS portal regarding tax credit calculations. Our professionals can:
- Detect and Confirm Mistakes: Companies can reconcile system-generated tax numbers with hand calculations to identify inconsistencies in the calculation of tax credit.
- Assist in Filing Corrections: We assist filers in completing amended returns or adjustments for the correct amount of taxes due, as well as any credits to which they are entitled.
- Offer Professional Advice: Our experts understand the provision of the Income Tax Ordinance, 2001. We assist them in interpreting various sections as well as their applications for credits.
- Liaise with FBR:Qualified accountants can approach the tax department online to inform about a bug and request an amendment.
- Educate Taxpayers: Clients can learn how to input data into IRIS correctly, which means fewer user errors that lead to tax shortfalls.
In short, CBM Consultants serve as a bridge between taxpayers and FBR. It ensures accuracy, compliance, and timely resolution of digital tax computation errors.
Conclusion:
The PBC flags an error in tax credit calculation on FBR’s IRIS Portal is more than a glitch. It reveals systemic issues in tax calculations that Pakistan. Also, it undermines trust in our digital tax system. Reasons for errors in tax calculation; the onus is upon FBR to also focus. Taxpayers should have a portal that facilitates, not hinders, compliance.