It is essential for any individual or the business entities who want to become the filer in Pakistan to follow the Tax Laws of Pakistan. This is necessary for achieving the Financial benefits from the Tax Departments. Becoming a registered tax filer with FBR helps you to remain on the correct side of Pakistan’s taxation. Staying compliant also helps you to avail benefits such as lower tax rates and easier financial transactions. Whether you are an employee, freelancer, or business owner, get yourself filed before it’s too late. Here is a step by step guide of you can get yourself registered for income tax and how to become a filer in Pakistan.
Filer Vs Non-Filer
Before going through the process, here’s a quick overview to help you differentiate between a filer and non-filer in Pakistan. A filer is a taxpayer who registers with the FBR, gets a National Tax Number (NTN), and files an annual income tax return to be on the Active Taxpayers List (ATL). A non-filer is a non-registrant who is either not registered or fails to file a tax return, thus incurring more withholding taxes and penalties.
Pros of Being a Tax Filer in Pakistan
Advantages of being a taxpayer in Pakistan:
- Lower Withholding Taxes: Lower withholding tax rates on immovable properties, vehicles, and banking transactions.
- Financial Services: Easier to obtain loans, accounts, and visas.
- Tax Refunds :Excess taxes withheld may be claimed.
- Penalties: Keep above board and off of probation.
- Business Growth: Improved likelihood of obtaining contracts, licenses and partnerships.
- Contribution to Economy: Tax money is used for the development of a nation and social welfare.
Detailed Process of Becoming a Filer
Verify Your Eligibility
In order to be a FBR filer in Pakistan, you should follow these conditions:
- Income Bar: People with income above 600, 000 PKR per annum (approx. 50,000 PKR per month) need to file tax returns.
- Owning an Asset: Do you own property, a car, or anything of value,? Then, you must file a return.
- Business Owners/Freelancers : If you are running business or running freelancing from Pakistan, you need to register yourself.
- Non-Residents: Non-resident refers to an Overseas Pakistani earns from Pakistan such as rental income, he has to file taxes.
Collect Documents Needed for the Filers’ Registration
- Computerized National Identity Card (CNIC): The CNIC number is a substitute for NTN number for individuals.
- Income Proof: Pay slips, bank account statement or business income details.
- Property Papers: Documents of any property owned, if any.
- Bank data: IBAN, name of the bank and Holder of the account:
- Utility Bill : Utility bills (of business premises if available) of the last 3 months in English.
- Business Documents: Include your registration certificate or financial documents for those with a business.
- Mobile Number and Email: SIM registered in the name of an applicant and personal email address of the applicant for FBR correspondence.
Apply for National Tax Number (NTN)
The first step to becoming a Filer in Pakistan is to get an NTN:
- Access the FBR IRIS Portal: Navigate to fbr.gov.pk.
- Choose Registration Option: Choose “Registration for Unregistered Person” for an individual and “E-enrollment for Registered Person”. If you have already gotten your NTN but would like to access the IRIS.
- Fill Details: Type your CNIC, name, address, mobile number and email. For companies provide SECP registration and a letter authorizing the principal officer.
- Attach: Attach the Scanned copies of your CNIC, utility bills, and other required documents. Be sure files are in the proper format.
- Get NTN: Once submitted, FBR will process the application, and you will receive NTN in 1-2 working days through SMS or email.
Fill in you IRIS profile
- Login to IRIS: Access the IRIS portal after receiving your NTN by using User ID and Password received from FBR.
- Fill Out Form 181: You will find the 181-Application for Registration form under the “Drafts” tab. Fill in the personal tab ,property tab, business tab and accounts tab.
- Check and Send: Validate the information and submit the form.
File Your Tax Return
- Login to IRIS: Visit the portal and click on the “Declaration” tab.
- Fill form 114: Pick Form 114 for income tax returns; select either the salary return or business return option, depending on the source of income.
- Input Finance Numbers: You must enclose a statement of wealth detailing your assets, liabilities and bank balances.
- Upload Documents: Upload documents such as salary slips or bank statements.
- Review and Transmit: Confirm that the return is complete and file it electronically. You will get an acknowledgment receipt upon your successful submission.
- Pay tax (if due): you will get a challan and pay tax through online / mobile banking, authorized banks by due date (usually 30 September) if you need to pay tax.
Determine Status
After Registration, “Check your Active status in ATL”:
For Online: Visit the FBR website, enter your CNIC/NTN in the ATL section and ascertain the status.
Send your 13-digit CNIC number to 9966 to determine the status. After this, you will be upgraded to “Filer” within 24 hours of filing after Nov 1 each year.
Disadvantages of Late Filing
Inability to file return in Pakistan might lead to higher taxes, limited access to financial services and penalties. Late filers have to face penalties and are not considered as active tax filers till all their late returns are filed. To prevent these consequences , both individuals and businesses need to focus on timely filing of annual taxes.
How CBM Consultants Make Tax Filing Simple for You
Your way to becoming and being a filer in Pakistan is simple; CBM Consultants will assist you to determine if you qualify for filing. Then, it will process the documents and the registration of NTN through FBR’s IRIS portal. We make sure to file your tax return in a correct manner, tax plan to make sure your exposure is minimized, and we also represent you in audits.
By providing continued compliance reminders and updates regarding tax law all throughout the year, we make the process fast and easy. Businesses benefit from services like sales tax registration, corporate filings, and SECP compliance, whereas overseas Pakistanis have been specially facilitated with non-resident filing support. Choose CBM Consultants! Save yourself from future penalties.
Conclusion
Becoming a Filer in Pakistan is a simple way to avail many financial and legal advantages. By reading this simple and easy guide to how to register for income tax through FBR filer registration online, you can get your NTN, file return and take advantage of being a tax filer in Pakistan. A non-filer in Pakistan need not fall into the traps of even replications not to be a non-filer. Begin your journey today by visiting iris.fbr.gov.pk and allow CBM Consultants to ensure a smooth process.