Here’s How You Can File Your Income Tax in Pakistan [Guide]

Want to avail better than usual services at airports, excise offices? Want to get that new car at a lower price? Or even that prime piece of real estate at a lower-than-asking rate? Want to enjoy a minimal withholding tax on all your banking transactions? Did you recently suffer a loss in your business and need a tax waiver?

If you answered yes to any of those questions, then you need to file your tax returns and wealth statement so that you can enjoy these benefits.

Most of us, contrary to popular opinion, want to do our bit for our country and pay our taxes like a law-abiding citizen. Many are just turned off from doing so because:

• It’s a very cumbersome process.
• ‘My employer deducted it so why should I even bother?’
• You don’t have a guide to do so.
• ‘We are already paying taxes through indirect means.’
• Who cares, its Pakistan.

Now assuming that you agreed with most of the reasons listed above, then sorry to say but that makes you tax illiterate. In fact, even most of the educated people here are guilty of the same.

This post will attempt to get you on your way to becoming a filer.

Filing your tax returns & wealth statement is beneficial for both you and your government.

And here’s how you can start doing so in 2017.

Step 1: Know FBR’s Instructions for Filing Taxes for 2017

Before we get to how to register online as a tax filer and submit your returns, it is prudent to go through the Federal Board of Revenue’s (FBR) recent SRO No. 981(I) 2017 from September 28.

If you are a salaried individual whose income does not exceed Rs. 400,000 annually, you won’t need to pay income tax. However, for maximum transparency, you will still need to file your tax returns with the correct details.

In case your yearly income does exceed Rs 400,000, you can consult this article.

FBR has extended the last date for filing your tax returns from September 30 to October 31 2017.

Step 2: Get Registered with FBR E-Enrollment System Online

You can get registered with FBR here and start filing your tax returns online. Previously FBR used to have separate portals for individuals and companies. But now, they have simplified it further for everyone.

The process is relatively straight-forward for both new and returning users alike. We have recapped it here intensively should you need to get up to speed with it.

To get enrolled, you only need to click the “Registration for Unregistered Person” or “E-Enrollment for Registered Person“. It will ask you or your CNIC number and phone number (which has to be registered under your own name).

Step 3: Prepare and Submit Your Tax Documents

Once signed up, you’ll see a few categories on the left. Go to the registration document in the Drafts folder and fill it. When you have filled it and submitted it, FBR will confirm your account and you will be able to submit your tax returns and wealth statements.

For Income Tax Statement:

For Wealth Statement:

If going online is not an option for you, then you can manually file your returns on paper at Taxpayer Facilitation Counters of the respective Regional Tax Office. Paper Return Form can be downloaded from FBR’s website as well.

Note: Submitting your tax details online with FBR’s portal may seem easy. However, it is always helpful to let a professional with experience in tax-related matters help you out when filling these forms especially if you are a businessman.

Who Needs to File the Income Tax Returns?

Here are the people and entities who have to submit their tax returns as per law.

• Every company;
• Every person (other than a company) whose taxable income for the year exceeds PKR 400,000;
• Every non-profit organization as defined in clause (36) of section 2;
• Every welfare institution approved under clause (58) of Part I of the Second Schedule;
• Every person who has been charged to tax in respect of any of the two preceding tax years;
• Every person who claims a loss carried forward under this Ordinance for a tax year;
• Every person who owns immovable property with a land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
• Every person who owns immoveable property with a land area of five hundred square yards or more located in a rating area;
• Every person who owns a flat having covered area of two thousand square feet or more located in a rating area;
• Every person who owns a motor vehicle having engine capacity above 1000 CC;
• Every person who has obtained National Tax Number;
• Every person who is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;
• Every person who is registered with any chamber of commerce and industry or any trade or business association or any market
• committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan;
• Every individual whose income under the head Business exceeds PKR 300,000 but does not exceed PKR 400,000 in a tax year.

Your Income Tax Returns will not Be Entertained if:

Under section 182(1), individuals and companies need to make sure that they don’t fill in the wrong details in their forms, failing which will result in penalties for the concerned parties.

• CNIC should not be missing or incorrect or invalid;
• Mandatory fields marked by * shouldn’t be empty;
• Return should be duly signed by the Taxpayer or his Representative (as defined in section 172 of the Income Tax Ordinance, 2001);
• Return should be filed in the prescribed Form and format.

This guide is not meant to be used an exhaustive resource, however, it represents that first step for people who are genuinely looking to contribute to Pakistan’s well-being and do their civic duty as responsible citizens. We hope that this guide has pointed you at the right direction.

Do you have any questions regarding FBR’s process for filing tax returns online? Do let us know in the comments below.