Individual - Tax administration

Last reviewed - 31 December 2019

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).

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. Salaried individuals with income in excess of PKR 500,000 are required to e-file the return of income.

Every resident taxpayer, being an individual, having foreign income equal to or in excess of 10,000 United States dollars (USD) or having foreign assets with a value of USD 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 are required to file their return/wealth statement for the year ended 30 June by 30 September, except in case of salaried individuals with income in excess of PKR 500,000, who are required to file the return by 31 August.

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 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. A taxpayer whose income tax affairs were already audited in any of the preceding three tax years shall be selected by the Commissioner of Inland Revenue (CIR) for a tax audit only after approval of the Federal Board of Revenue (FBR).

Topics of focus for tax authorities

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