How To File Income Tax Return in Pakistan

How To File Income Tax Return in Pakistan

How To File Income Tax Return in Pakistan:

The first thing here is to discuss about, who should file Income Tax Return in Pakistan? as well as how to file income tax return in Pakistan?.

Who should file Income Tax Return in Pakistan?

  • Having NTN number (National Tax Number)
  • Annual Income Rs.400,000/- or more
  • Salary Individuals
  • Business Individuals / Firms / Companies / Associations / NGO / Trust / Society
  • Dividend income from Companies listed in Stock market  / unlisted in stock market
  • Profit on bank accounts, National Savings and other saving schemes
  • Commission income
  • Capital Gain on Shares, NIT Units, and Asset Management Companies,
  • Having Assets in Pakistan, must be declared in wealth statement (which is mandatory)
  • Any tax deduction activities during the tax year

Income Tax rates:

Income tax rates change every year in Financial Budget, which normally announces in the month of June. The tax rates can download from the official website of FBR which is www.fbr.gov.pk

Income Tax challans:

If there is any tax liability during the period, You will prepare Tax Challan, using,  FBR system, this portal prepare  electronically income tax challans.

How can I pay the Tax Challan?

This Tax Challan will be paid in, any of the authorized branches of National Bank  of Pakistan/ State bank of Pakistan  as well as you maybe deposit / transfer through your personal bank account. The income tax challan should be taken from FBR portal with barcode; otherwise the tax challan will not be acceptable and verifiable.

Note:

Don’t handover tax payment to anyone in cash, you must go to bank and deposit directly, it is the right way.

IRIS system:

FBR introduced this system in 2014 to facilitate the tax payers who want to file online income tax return at home or office or anywhere in the world.

Steps to register on IRIS system and link is below, it may be changed, if FBR update the website.

https://iris.fbr.gov.pk/infosys/public/txplogin.xhtml

If you are not registered on this portal:

Select ‘Registration for unregistered person’ and enter the information in required field, the form is as below, when you submit relevant information, you will received code on your email as well as on your mobile, validate it and complete the process. After confirmation of registration, you will get the Pin and Password.

how to file income tax return in Pakistan.

You can login it and prepare your annual income tax return. For preparation of income tax return, you must have knowledge about the tax matters, once the income tax return submitted, cannot be changed or Commissioner allows changing in tax return.

Credentials of Income tax returns:

  • Annual Income
  • Tax deduction certificate
  • Profit & Loss Account
  • Balance Sheet

Wealth statement:

It is very important document which is necessary to submit before filing of Annual Income Tax Return, without Wealth statement, income tax return will not be submitted.

  • Details of Assets on your name like Property, Vehicle, Cash, Bank balance, House Holds, Personal items, jewellery and other assets
  • Details of Liabilities Like Loan, or any other liability
  • Any amount receiving as a foreign remittance will be entered in your wealth statement.
  • Annually Income from Business, Salary, other sources
  • Any other source of income

Last date for Income tax return in Pakistan:

Normally September 30th of every year is the last date of income tax submission, but it maybe extended by the Federal Board of Revenue.

Tax filer in Pakistan / how to become tax filer in Pakistan:

In 2014, FBR introduced about the new terminology like “who will be the tax filer in Pakistan”. If any person who files annually income tax return in Pakistan with wealth statement, FBR system update the data base on every week or twice in a month, any income tax return submitted during the period, will be mentioned in Active tax payer list and the tax payer automatic become tax filer in Pakistan and the active tax payer list can be download from the official website of FBR which is www.fbr.gov.pk.

Benefits of Tax Filer in Pakistan:

1- Less Tax Rate applicable on cash withdrawals from Banks

2-Less Tax Rate on Dividend income from shares and units

3-Less Tax Rate on profits on bank deposits / National Savings Account

4- Foreign Currency Account Open (No bank account in Foreign Currency will be opened)

5- Property Purchasing                       (Property cannot be transferred more than 5 Millions)

6- New Vehicle Purchase or Booking (No new Vehicle can be purchased, booked and transferred)

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