In Pakistan, it’s the duty of every person, firm or any association, to pay the tax in due time in the manner prescribed by the Government. Filing of the tax return is an annual requirement making you compliant with the provisions of the Income Tax Ordinance, 2001, to ensure no penalties and avail any financial advantages including exemptions and reduced rates of tax. This article offers you a comprehensive guide that you can follow on how to work your way through the filing of yearly tax return in Pakistan and have an efficient, and stress-free tax filing process to say the least.
Why Annual Tax Filing Matters
Filing tax returns on an annual basis in Pakistan is much more than a mere legal requirement. It’s a walk on the tightrope of financial transparency, self-respect, and a process that leads to the fulfillment of national goals, and it also enables citizens to benefit from loan approvals, visa processing, property transactions and so on. Not filing due taxes on time in Pakistan could result in fines, suspension from the List of Active Taxpayers (ATL) and/or limitations in financial transactions such as opening bank accounts or buying motor vehicles. Beat the problems and save time while you’re at it. By getting a head start on filing your income tax return.
Key Deadlines for Annual Tax Filing
Your taxpayer status determines the timing of your annual tax filing deadline:
- Individuals and AOP’s: The said due date will be on or before 30th September of the immediately next year following the tax year (For the tax year 1st July 2024 to 30th June 2025, 30th September 2025). A further extension of 15 days may be granted on an application, which shall be made to FBR.
- Companies: Corporations are required to report by automatic extension on December 31 of the following tax year or receive a 30-day automatic extension.
- Amended Returns:If you are required to file an amended return, you should file and amended due (corrected) copy of that return within 60 days after the due date of the original return.
Steps to Prepare for Annual Tax Filing
Understand tax obligations and file your Income Tax Returns wisely. The process for annual tax filing is mentioned as below:
Eligibility and Documentation
- Annual income above PKR 600,000 (salaried) or PKR 400,000 (business/freelancers).
- Certain property or car exceeding 1000cc.
- National Tax Number (NTN) or carrying forward a business loss.
- Business registered in Pakistan, regardless of income.
Required Documents
- Salaried Individuals: Certificate of tax deduction by employer (July 1, 2024, to June 30, 2025).
- Business Owners/Freelancers: Income statements, balance sheets, tax certificates.
- Property Income Earners: Deeds, lease agreements, bills.
- Wealth Statement: Values of assets and liabilities to balance against income and expenses.
Registering through the Iris Portal of the FBR
- Go to FBR website (https://iris.fbr.gov.pk/) and select “e-Enrollment for Registered Persons”.
- Complete registration process and receive an NTN.
Filling out the Income Tax Return Form
- Log in to Iris and click “Declaration” > “114(1) Return of Income Filed Voluntarily for 1 Year”.
- Select the tax year (2025 for the income from July 1, 2024, to June 30, 2025).
- Fill in income, deductions, and taxes withheld.
- Fill the Wealth Statement to balance assets and liabilities.
Paying Any Outstanding Taxes
- Pay any residual in the prescribed ways.
- Submit and verify your return using Iris.
Professional Income Tax Returns Services
- Third-party services like Ways Tax, TaxationPk, or Befiler can help with document preparation, filing, and obtaining the best deductions while adhering to FBR rules.
Consequences of Missing the Tax Filing Deadline
If you miss deadline of annual tax filing, the consequences you face are mentioned as below:
- Penalties: PKR 1,000 for late filing by December 31; up to PKR 50,000 for businesses and PKR 10,000 for individuals. There is a daily fine of 0.1% of tax payable (minimum Rs5,000, maximum 25%).
- Default Surcharge: Accumulated interest at KIBOR + 3% per quarter for unpaid taxes etc.
- Loss of Benefits: Removal from the ATL, property sales and purchases, vehicle registrations, bank loans and overseas travel.
- Legal Action: Audit or simply legal investigation of non-compliancy by FBR.
Annual Tax Filing by CBM Consultants:
CBM Consultants assist in annual filing for tax return in Pakistan by combining the annual financial returns into the tax return, calculating the amount of tax payable and filing the application with the FBR and reducing the risk of penalties for late or wrong filling. Our experts help in accurate record keeping, tax credit or deduction claims, reconciliation of TDS, advice on tax slabs, and exemptions. We also assist with wealth statements, NTN handling, advance tax adjustment and represent in case of audit and notice from the Federal Board of Revenue (FBR), ensuring that your sharing process remains smooth with no hassles.
Have questions about this topic? Let’s talk.
Tips for Hassle-Free Annual Tax Filing
Start Early: Start gathering your documents and preparing your return in July to avoid last-minute hassles.
Keep Checking: Keep an eye on announcements of the FBR for tax slabs, forms, and deadlines changes.
Use Iris Efficiently: You can also watch FBR’s video tutorials or query the Knowledge Base on post submission filing assistance.
Double-Check: Always double check your income tax return form for inaccuracies before you submit it to avoid fines or audits.
Claim Deductions: Add the deductions you can, such as donations to charity, medical expenses and business expenses, to lower your taxable income.
Conclusion
Understanding how to file taxes in Pakistan, you can fight the fear of tax filing methodologies in your country. By knowing what you need to do, having documents in order and using Iris on FBR’s web portal, you will be able to file your income tax returns correctly without a fuss. Whether you are a salaried person, freelance or an entrepreneur, with on-time annual filing, one can achieve financial transparency and get into the system to avail various benefits. If necessary, use tax returns services for professional help. Begin early, stay organized and file before the tax deadline in Pakistan to avoid penalties and set your future financial security in order.
