A Complete Guide to Income Tax Filing in Pakistan – Elite Taxation Explains

Filing income tax returns in Pakistan can seem complex, but understanding the process can make it easier and more efficient. Whether you are a salaried individual, a business owner, or a freelancer, knowing how to file your tax returns correctly is essential to avoid penalties and ensure compliance with the Federal Board of Revenue (FBR).

Who Needs to File Income Tax in Pakistan?

According to FBR regulations, the following individuals and businesses must file their income tax returns:

Salaried individuals earning above the taxable income threshold.
Business owners and self-employed professionals.
Companies and registered firms.
Property owners earning rental income.
Freelancers and online business owners meeting the income criteria.

Step-by-Step Guide to Filing Income Tax in Pakistan

Step 1: Register for an FBR NTN (National Tax Number)

To file taxes, you need an NTN (National Tax Number) or CNIC (for salaried individuals).

Visit the FBR Iris portal (iris.fbr.gov.pk).
Sign up and create an account.
Provide basic details such as CNIC, contact information, and business details (if applicable).
Your NTN will be generated once the registration is completed.

Step 2: Gather Required Documents

Before filing your tax return, ensure you have the following:

CNIC or NTN
Salary slips or business income records
Bank statements
Property details (if applicable)
Tax deduction certificates from employers or banks
Any additional income proof (e.g., rental income, investments, etc.)

Step 3: Log in to the FBR Iris Portal

Visit iris.fbr.gov.pk.
Enter your credentials and access the tax return form.
Select the relevant tax year.

Step 4: Fill Out the Income Tax Return Form

Declare all sources of income, including salary, business profits, and investments.
Mention deductions and exemptions (such as zakat, donations, and educational expenses).
Calculate taxable income and the amount payable or refundable.

Step 5: Submit Your Tax Return

Review the details carefully before submission.
Click on “Submit Return” to complete the filing process.
If tax is payable, generate a payment challan (PSID) and deposit it via online banking or at an authorized bank branch.

Benefits of Filing Income Tax in Pakistan

Legal Compliance – Avoid penalties and legal action.
Taxpayer Privileges – Get access to bank loans, visa processing, and asset purchases.
Lower Tax Deduction – Registered taxpayers benefit from reduced tax rates on banking transactions and property dealings.
Government Benefits – Avail tax refunds and exemptions where applicable.

Common Mistakes to Avoid

Failing to file on time – Late filing leads to penalties.
Incorrect income declaration – Misreporting can result in audits and fines.
Not keeping records – Always maintain proof of income and tax payments.
Ignoring tax deductions – Use all applicable exemptions to reduce taxable income.

Final Thoughts

Income tax filing in Pakistan is a straightforward process if you follow the right steps. By registering with FBR, maintaining financial records, and filing returns on time, you can avoid legal issues and enjoy tax benefits.