WHAT IS INCOME TAX RETURN?

Understanding Income Tax Return Filing in Pakistan

The Government of Pakistan has entrusted the Federal Board of Revenue (FBR) with the responsibility of collecting federal taxes in the country. FBR, as the premier taxing authority, oversees various tax domains, including Income Tax, Sales Tax, Custom Duty, and Federal Excise Duty.

Income Tax, a direct tax, is levied on individuals earning taxable income in Pakistan. Every taxpayer is mandated to file an Income Tax Return in the prescribed manner and form. Filing an Income Tax Return online via the Integrated Risk Information System (IRIS) portal is essential for it to be deemed valid.

The Income Tax Return form is periodically updated to encompass all classes of income generators in Pakistan and the various sources of income. Each year, taxpayers must file their Income Tax Returns with the FBR on the IRIS portal, based on the sources of their income.

An Income Tax Return is a declaration submitted to the tax authority wherein individuals disclose their income, expenses, and any taxes already paid. It enables taxpayers to compute their tax liability for the year by reporting income, expenses, and other relevant tax information. Taxpayers can determine their payable tax liability or request a refund for any excess taxes paid as advance income tax.

WHAT IS AN INCOME TAX RETURN?

An Income Tax Return is a form through which individuals declare their income, detail their expenses, and report any changes in assets for the year. It is filed with the Federal Board of Revenue through the IRIS Online software.

The deadline for filing Income Tax Returns in Pakistan is typically September 30th for the preceding year, although FBR retains the authority to extend this deadline.

E-FILING OF INCOME TAX RETURN IN PAKISTAN

Previously, Income Tax Returns were filed manually using prescribed forms. However, the FBR has transitioned to online filing via the IRIS portal in recent years.

STEPS TO FILE INCOME TAX RETURN ON IRIS:

  1. REGISTER ONLINE: Individuals required to file Income Tax Returns must register with the FBR. Registration can be done by filling the TRF 1 form or through online registration via “E-enrollment for Unregistered Person” or “E-enrollment for Registered Person” if already registered.
  2. FILE INCOME TAX RETURN: Log into the IRIS portal and file your Income Tax Return after registration.
  3. COMPLETE INCOME TAX RETURN: Ensure all sections of the Income Statement and Wealth Statement are completed accurately. Reconcile income, expenses, and assets.
  4. REVISE INCOME TAX RETURN: Amendments to the Income Tax Return can be made online within 60 days. After this period, permission from the FBR Commissioner is required.
  5. REVISE WEALTH STATEMENT: Wealth Statements can be revised on the IRIS portal at any time without Commissioner approval, except when a notice has been received under Section 122 of the Income Tax Ordinance, 2001.

In conclusion, every individual obligated by law to file an Income Tax Return must do so annually and fulfill their tax obligations. Failure to file returns within the deadline may result in penalties imposed by the FBR. To ensure compliance and avoid penalties, it’s crucial to file your Income Tax Return annually on the IRIS portal as per the outlined process.

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