Introduction
Every year, millions of Pakistanis receive text messages from the Federal Board of Revenue (FBR) reminding them to file their income tax returns. Some ignore these messages, thinking they don’t apply to them. Others panic, unsure whether they’re actually required to file. Many assume that because their employer deducts tax from their salary, they don’t need to do anything else.
This confusion costs people dearly. Non-filers face higher tax deductions on bank transactions, property deals, and vehicle purchases. They also risk penalties, legal notices, and being blocked from important financial activities.
What Does “Filer” Actually Mean?
A filer is simply someone who submits their income tax return to the FBR every year—even if they owe zero tax. It’s not about how much you earn or how much tax you pay. It’s about filing that annual return.
Think of it like this: filing your return is like telling the government, “Here’s what I earned this year, and here’s the tax I’ve already paid or owe.” Once you file, the FBR adds you to the Active Taxpayers List (ATL)—the official list of filers.
Non-filers are people who don’t file returns. They’re not on the ATL, and that’s where the problems begin.
Why Should You Become a Filer?
1. Lower Tax Rates on Transactions
Non-filers pay double or triple the tax rate on many transactions:
- Bank withdrawals over Rs. 50,000 per day – Non-filers pay the fees, Filers do not pay
- Buying property – Non-filers pay more advance tax than Filers
- Buying a car – Non-filers pay significantly higher rates
- Bank Profits – Non-filers pay more
2. Avoid Penalties and Legal Notices
If you’re required to file but don’t, the FBR can:
- Issue legal notices
- Impose penalties
- Block your bank accounts or CNIC temporarily
- Prevent you from opening new bank accounts
3. Access Financial Services
Many banks now require you to be a filer to:
- Open certain types of accounts
- Get credit cards
- Apply for business or personal loans
4. Build Your Financial Record
Filing returns creates an official record of your income, which helps when:
- Applying for visas (especially US, UK, Schengen)
- Getting business loans or contracts
- Proving your financial credibility
Who Must File a Tax Return in Pakistan?
You must file if you fall into any of these categories:
Salaried Persons
- Annual salary exceeds Rs. 600,000 (as of 2026)
- Your employer deducts tax from your salary (you’re already paying tax—you just need to file)
Business Owners
- Any person running a business, regardless of profit
- Annual turnover exceeds Rs. 10 million (required to register for sales tax too)
Property Owners
- If you sold property during the year
- If you own property worth more than Rs. 25 million
Other Situations
- You own a vehicle with an engine capacity of over 1000cc
- You paid more than Rs. 200,000 in electricity bills during the year
- You made international travel (purchased air tickets) worth more than Rs. 250,000
- You’re registered with FBR (have an NTN)
Important: Even if you earned less than Rs. 600,000 but fall into one of the above categories, you may still need to file.
Step-by-Step: How to Become a Filer
Step 1: Register with FBR (Get Your NTN)
If you’ve never filed before, you need a National Tax Number (NTN).
How to Register:
- Visit the FBR Iris Portal: https://iris.fbr.gov.pk
- Click on “New Registration”
- Fill in your personal details:
- CNIC number
- Mobile number
- Email address
- Date of birth
- Enter address details
- Verify your mobile number through OTP
- Verify your email through OTP
- Submit the form
- You’ll receive a confirmation message in your email, and you can download your NTN from the portal.
Note: Most salaried people already have an NTN because their employer registered them. For that, you should check your salary slip or ask your HR department.
Step 2: Login into Your Account on the Iris Portal
- Go to https://iris.fbr.gov.pk
- Click “Login”
- Enter your CNIC as username and create a password
- Login Now
Step 3: Gather Your Documents
Before filing, collect these documents:
For Salaried Persons:
- Annual salary certificate from employer (showing total salary and tax deducted)
- Bank statements (if you have investment income or other sources)
For Business Owners:
- Business income and expense records
- Sales invoices
- Purchase invoices
- Bank statements
For Everyone:
- CNIC copy
- Details of any property you own
- Details of vehicles you own
- Any other income sources (rent, dividends, etc.)
Step 4: File Your Income Tax Return
- Log in to FBR Iris Portal
- Go to the “Returns” section
- Select “Income Tax Return”
- Choose the correct tax year (e.g., for tax year 2025 (July 01, 2024 to June 30, 2025)
- Select your return form:
- Salaried persons usually use the form Salary-only return
- Business owners use the form for AOPs/Business
- Professionals use a relevant professional form
- Fill in your information:
- Personal details
- Income details (salary, business income, etc.)
- Tax already paid (show the tax your employer deducted)
- Assets (property, vehicles, bank accounts, investments)
- Liabilities (loans, if any)
- Review everything carefully
- Click “Submit”
- Generate and download your return from Completed Tasks
Filing Deadline: Usually September 30 each year for salaried persons (sometimes extended from a couple of weeks).
Step 5: Verify You’re on the Active Taxpayers List
Within 24-48 hours of filing:
- Visit: https://iris.fbr.gov.pk
- Enter your CNIC number
- Click “Verify”
- Check if your status shows “Active Taxpayer”
If it shows “Non-Filer / In-Active,” wait a day or two and check again. If the problem persists, contact your Consultant if any or visit your RTO (Regional Tax Office).
Common Mistakes to Avoid
1. Not Declaring All Income Sources
If you earn rent, have a side business, or receive dividends, declare everything. FBR has access to your banking data and can catch undeclared income.
2. Filing Late
File before the deadline. Late filing attracts penalties—up to Rs. 40,000 or more depending on how late you are.
3. Not Updating Asset Details
Always update your asset section (property, cars, bank balances). Inconsistencies can trigger FBR scrutiny.
4. Thinking “My Employer Filed for Me”
Your employer deducts tax—they don’t file your return. You must file it yourself.
5. Filing Once and Forgetting
You must file every year to stay a filer. Missing even one year makes you a non-filer.
What If You Owe Tax After Filing?
Sometimes, after filing, you realize you owe more tax (for example, if you had business income or other sources beyond salary).
What to do:
- The IRIS portal will calculate your tax liability
- Generate a PSID (Payment Slip ID) from the portal
- Pay through:
- Bank branch (take the payment slip)
- Online banking (1-Link portal)
- ATM (if your bank supports it)
- Upload the payment proof on the IRIS portal (CPR)
What If You Have Zero Income or Very Low Income?
Even if you earned nothing or very little, you may still want to become a filer to:
- Avoid higher tax rates when you do make transactions
- Prepare for future earnings
- Build your financial profile
You can file a nil return (showing zero or low income and zero tax). This still makes you a filer.
Special Situations
Freelancers and Dollar Earners
If you earn in dollars (through Upwork, Fiverr, YouTube, etc.):
- Convert your dollar income to PKR using the average exchange rate for that year
- Declare it as business income or income from other sources
- You may qualify for tax exemptions under Pakistan’s freelancer-friendly policies (check current year rules)
- You should apply for the Pakistan Software Export Board (PSEB), and you will have to pay only 0.25% of your income as tax instead of a flat 1% if you do not register with the Pakistan Software Export Board (PSEB).
Overseas Pakistanis
If you live abroad but have income sources in Pakistan (rent, business), you must still file if your Pakistan-source income crosses the threshold.
How Much Does It Cost to Become a Filer?
It costs around Rs. 5,000 to Rs. 25,000 (depending on complexity) to file a tax return. It again depends on the consultant who is rendering services to you.
Benefits Beyond Lower Taxes
- Better credit score for loans
- Stronger visa applications
- Professional credibility (especially for lawyers, doctors, consultants)
- Peace of mind—no fear of FBR notices
- Access to government tenders and contracts (many require you to be a filer)
Final Thoughts
Becoming a filer isn’t complicated—it’s just unfamiliar to most people. Once you do it for one time, it becomes routine. The key is to start now, file on time every year, and keep your records clean.
Don’t wait for an FBR notice. Don’t assume you’re exempt.
Remember: Filing a return doesn’t mean you owe tax. It means you’re a responsible, documented citizen—and in Pakistan’s economy today, that makes all the difference.
Disclaimer: Tax laws change frequently. Always verify current rules and rates on the FBR website or consult a qualified tax professional for your specific situation.
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STILL NEED HELP?
If you still need help with income tax return filing, FBR notice responses, or corporate tax compliance, consult us without any hesitation to avoid penalties and future legal issues. Professional guidance ensures accurate filing, maximizes legitimate deductions, and protects you from costly mistakes that could take years to resolve.