Filing Income Tax Return in Pakistan

Filing Income Tax Return in Pakistan

Government of Pakistan mandated Federal Board of Revenue to collect Federal Taxes in Pakistan. FBR is the top taxing authority in Pakistan. There are different kinds of taxes domain that FBR enjoy including Income Tax, Sales Tax, Custom duty and Federal Excise Duty.

Income Tax is a direct tax which is directly charged to the person generating taxable income in Pakistan. Every person to file income tax declaration is required to file Income Tax Return in the prescribed manner and prescribed form. What that means is that Income Tax Return will only be deemed to have been filed and considered valid when filed online on IRIS and on the provided form available at IRIS portal.

Income Tax Return form from time to time is updated to cover all the class of persons generating income in Pakistan and all kinds of incomes that can be generated by a person. Each year, Income Tax Return is required to be filed with FBR on IRIS portal based on the source of income that a person enjoys.

Income Tax Return is a form or forms filed with a tax authority wherein person declares his income, expenses incurred and tax already paid, if any. Tax Returns enables the person to calculate his tax liability for the year that reports income, expenses, and other pertinent tax information. Tax returns allows taxpayer to calculate his tax liability payable or in case if excessive tax paid in shape of advance income tax, request refund for the overpayment of taxes. Income Tax Return in Pakistan is filed annually for an salaried person, business individual or business (Firm or Company) to declare income including profits and gains, detail expenses including wages, rent etc, yield on shares and dividends etc.

What is Income Tax Return ?

Income Tax Return is a form on which a person declares his income, details his expenses and also detail the increase or decrease in assets of a person for the year. Income Tax Return is filed with the Federal Board of Revenue through IRIS Online software.

The deadline for Income Tax Return in the Pakistan is normally 30th September for the previous year but FBR has the power to extend the deadline date.

E-Filing of Income Tax Return in Pakistan

Earlier the Income Tax Return was filed manually on the prescribed form. However, recently the FBR has shifted the policy from manual to online filing of return. IRIS portal was developed and introduced and since several years Income Tax Return is filed online via IRIS portal.

Steps you need to follow to file Income Tax Return on IRIS:
Register online

First step is that any person who is required to file Income Tax Return is required to register with FBR. Person willing to register with FBR can register by filling TRF 1 form or by registering online via “E-enrollment for Unregistered Person”.

In case, if you do not have your IRIS credentials, you can access IRIS portal verifying your particulars on “E-enrollment for Registered Person”.

File Income Tax Return

You can file your Income Tax Return online only by logging into IRIS portal. After registration you can log into Iris and file your Income Tax Return.

Complete Income Tax Return

Without filing a complete return, same is considered invalid. To complete Income Tax Return a person must fill complete detail in income statement and wealth statement. After the detailed information is mentioned, you are finally required to reconcile the amounts. This means that you will need to declare exactly how much of the income as you declared was spent on expenses and how much of the income was applied to buy new assets.

FBR for the purpose to facilitate taxpayers and their guidance have provided FBR’s Knowledge Base Portal which offers step by step guides on filing Income Tax Return and Wealth Statement. After you have completed the Return, you are required to enter digital signature by entering your PIN and submit the Income Tax Return.

Revise Income Tax Return

Income Tax Return under the law can be revised online within 60 days. In case if you wish to revise your return after lapse of 60 days, permission from FBR is required. If you wish to revise you return after lapse of 60 days, you will be required to write a written request to Commissioner of your respective zone online with reasons of so doing. Only upon his approval revised Income Tax Return is accepted and not otherwise.

Revise Wealth Statement

Wealth Statement is where you detail your assets and liabilities. Wealth Statement can be revised in IRIS portal anytime without seeking approval from the commissioner. Provided that where a person has received notice under Section 122 of Income Tax Ordinance, 2001, revised return shall be deemed invalid and unacceptable unless the commissioner approved the revised wealth statement.

Conclusion

Every person required under the law to file Income Tax Return is obligated to file his return annually and accordingly pay taxes chargeable on income. In case if return is not filed within the deadline, FBR directs the person to file his return and as consequence also charge penalty for late filing of Income Tax Return. If you have paid advance taxes but you have not declared your income by filing Income Tax Return, you are still required to file your return on IRIS annually and for not doing penalty can be charged by FBR. So if you want to avoid paying penalty to FBR, file your Income Tax return at IRIS portal by following the process detailed herein above.