Individual - Tax administration

Tax Profile

Certain information such as bank details, properties, assets, etc. is to be shared with tax authorities by taxpayer as part of his profile. For documentation & streamlining this information, the expression ‘tax profile’ has been defined. Existing as well as new taxpayers are now mandatorily required to update changes in particulars with tax authorities in such ‘tax profile’. Penalties and other negative consequences also specified in law to discourage non-compliance.

Taxable period

The tax year is 1 July through 30 June.

Tax returns and statements

An individual is required to file a return of income with the tax authorities on a fiscal year basis (1 July through 30 June). Filing of a revised return requires prior approval of the Commissioner, subject to certain limitations and conditions. Commissioner is now also empowered to grant approval for revision of return for bona fide omission or wrong statement.

Every resident taxpayer filing a return of income is required to file a wealth statement (in the prescribed format) along with the return of income. The Commissioner can also require any person to furnish the said statement. For revision of wealth statement, an intimation has to be filed with the Commissioner, who is empowered to disallow/disregard such revision in case he/she is of the view that the same has not been made for correction of bona fide errors or omissions. Taxpayer has been allowed to make revision of Wealth statement, upto a period of five years.  

Salaried individuals with income in excess of PKR 500,000 are required to e-file the return of income. Other Individuals deriving taxable income of Rs 1 million or more or having a turnover in excess of Rs 50 million are required to file returns electronically.

Every resident taxpayer being an individual, having foreign income equal to or in excess of US$ 10,000 or having foreign assets with a value of US$ 100,000 or more is now also required to file a separate statement of foreign income and foreign assets in a prescribed format. The Commissioner can also require any person to furnish such statement.

All the individuals (including salaried persons) are required to file their return/wealth statement for the year ended 30 June by 30 September.

Persons whose all or any incomes was subject to final tax regime were earlier required to file a statement prescribed in the law in lieu of return of income which requirement has now been omitted. The Federal Board of Revenue is to prescribe returns for different classes of income or persons including those covered by final tax regime.

Payment of tax

Income tax is withheld from salaries by the employer. The amount to be withheld is determined by applying to the salary the average rate of tax on the estimated income of the employee for the fiscal year.

Advance tax is payable by an individual (other than a salaried individual) in four instalments if latest assessed taxable income is in excess of PKR 1 million.

Statute of limitations

A tax return can be audited at any time within six years of filing thereof.

Topics of focus for tax authorities

The tax authorities mainly focus their attention on taxpayers other than salaried individuals.