How to Become a Filer in Pakistan?

Filer,

Late-Filer!

Non-Filer!

Many people are unsure about what these terms mean.

By reading this article, you'll understand these categories thoroughly.

There are specific advantages to being a "Filer."

As a "Late-Filer" or "Non-Filer," you must pay additional taxes on certain transactions.

This article will guide you through the process of filing an income tax return in Pakistan, explain how to become a filer, and highlight the benefits of filing income tax returns in Pakistan.

This article will include:

1.????? Introduction

2.????? Relevant Laws

3.????? Registration with FBR

4.????? How to File Income Tax Returns in Pakistan

5.????? Status of being Filer

6.????? Benefits of being Filer

7.????? Lawyer's Fee for Tax Return Filing

8.????? Conclusion

Let’s Begin!

1. Introduction

Pakistan is documenting its economy.

The Federal Board of Revenue (FBR) is helping govt. in this regard.

Every June, the government updates tax rules.

A "Filer" is someone who registers with the FBR and files their return before September 30.

If you file after September 30, you are a "Late-Filer."

"Non-filer" is a person who doesn't file his/her tax returns.

I'll explain income tax returns later.

2. Relevant Laws

Income Tax Return is filed under Section 114 of the Income Tax Ordinance, 2001.

3. Registration with FBR

In the process of becoming a filer, the first step is to be registered with FBR.

You may register with FBR by opening the following link.

https://iris.fbr.gov.pk/login

Information Needed for Registration:

• Full Name
• CNIC Number
• Mobile Number
• Email Address
• Residential Address

After entering the information mentioned above, the FBR system will send a One-Time-Password (OTP) to your provided email address and mobile number.

Once you entered the OTP received on email and mobile in relevant boxes, FBR system will send you a permanent password on your SIM & Email.

This password is used to open/log into your FBR Portal also called IRIS (??? ??) (IRIS Login / FBR Login).

4. How to File Income Tax Return in Pakistan?

This section will answer the above question.

First, register with the FBR as described earlier in this article.

After registration, log into IRIS, and provide information about your income, expenses, assets, and liabilities in the appropriate fields according to your sources of income.

This process of submitting information about your income, expenses, assets, and liabilities is called filing a “Tax Returns” or ??????? in Urdu.

There are five sources or heads of income: Salary, Business, Property, Capital Gains, and Others.

I file your Income Tax Return in Rs.15,000/-.

5. Status of Being Filer

If you are filing Tax Returns for the first time, you will have to pay Rs.1,000/- as a late filing fee to the FBR.

After paying the fee, your status will be updated from “Non-filer” to “Late-Filer” by FBR within the time frame of 24 hours.

It is important to mention here that only filing Tax Returns is not enough to become a Filer but late fee submission is mandatory to acquire the status of "Late-Filer" or “Filer”.

6. Benefits of Being Filer

There are certain benefits of becoming a Filer.

• More tax for non filers & late filers on purchase of immovable property
• More tax for non filers & late filers on sale of immovable property
• The rates of taxes on purchase/sale of vehicles for filers and non-filers are also different.

If you're a freelancer, you'll have to pay 1% of your freelancing income as tax to FBR [Rs.1,000 tax on Rs.100,000 income].

If you're a PSEB registered freelancer, you will pay 0.25% of your freelancing income [Rs.250 tax on Rs.100,000 income].

7. Lawyer / Consultant Professional Fee for Tax Return Filing

Normally, expert lawyers, tax advisors, and tax consultants charge a minimum of Rs.15,000/- for Income Tax Return filing in Pakistan.

The professional fee of a lawyer/consultant depends on several factors i.e., source of income (Salary, Rent, Business, Firm, and/or Company), the complexity of transactions, and the nature of your business, etc.

NOTE: It is important to note here that some people are filing returns, not being tax consultants/lawyers, in fee less than experts. They file wrong entries in your returns. FBR sends notices on those returns which may cost you more money in terms of tax notices and lawyers’ fees afterward/in the future. ??        

8. Conclusion

Becoming a filer is an easy and technical/legal task at the same time.

You may become a filer on your own but it is better to get the assistance of an expert i.e., a lawyer to avoid future notices from FBR.

Filer has certain benefits i.e., reduced tax rates at the time of sales/purchase of property/vehicle and withdrawing amount from a bank, etc.

Always try to get assistance from a Tax Lawyer in becoming a filer to avoid future inconvenience in the form of notices from FBR and to save your time, energy, and money. ?

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If you want to become a filer, contact the author and share the following documents/information:

1. Picture of CNIC (Both Sides)
2. Email Address
3. Mobile No. (registered on your CNIC)
4. Information regarding your source(s) of Income
5. Bank Statement (from July 2023 - June 2024)
6. Details of Assets & Liabilities
7. Fee: Rs.15,000/-

How to become a filer in Pakistan for overseas?

If you're an overseas Pakistani and want to become a filer in Pakistan, please get in touch with the author via WhatsApp at +92-343-4355000.

For any further information, you may contact the writer:

Dr. Sajjad A. Mansha | SAM,

Advocate High Court,

0343-4355000

Dr. SAM is a practicing advocate based in Islamabad. He has an LLB. He has also a Ph.D. in Leadership/HRM. His practicing areas include Tax, Corporate, Intellectual Property, Civil, Family, and Criminal.