Income Tax Return Filing in Pakistan | Overseas Income Tax filing

A tax return, also known as Goshwara (گوشوارہ), means to declare or to give a statement in some terms, and it is mandatory for everyone from salaried individuals to AOPs and companies. Each person or entity must comply with their tax obligations and file their annual income tax return. There are some exemptions and slight differences in the filing process for residents, non-residents, salaried individuals, AOPs, companies, and overseas Pakistanis, but filing remains mandatory. This article will simplify the basics of tax return filing and explain how our tax lawyers in Pakistan can assist you with this compliance.

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What is Tax Filer in Pakistan?

A tax filer in Pakistan is an individual or entity registered with the Federal Board of Revenue (FBR) who has obtained their/its NTN number and uses it to submit annual income tax returns to comply with Pakistan’s tax obligations.

Difference Between Filer and Non-Filer

FILER NON-FILER
Have its NTN registered with FBR
Do not have NTN
Eligible for tax credits, loans, and government contracts
Ineligible for tax credits and loans, limited access to business opportunities
Can participate in government contracts and tenders
Cannot participate in government contracts and tenders
Files annual income tax returns on time
Does not file income tax returns or fails to do so regularly

Difference Between Active Filer and Inactive Filer

An active filer is a person who files his income tax return regularly on time without fail. On the other hand, a non-active filer is a person (whether natural or legal) who may have his NTN registered with FBR or has filed a few tax returns but has failed to file tax returns for the current year or recent tax year(s).

Benefits of Filing Income Tax Return in Pakistan

Filing income tax returns is not just a legal obligation but also offers many benefits including but not limited to lower tax rates, buy or sell moveable or immovable properties with lower gain tax, access to loans, and the opportunity to participate in government tenders and contracts. It also provides the chance to claim tax refunds. Additionally, it helps maintain good standing with the tax authorities.

Tax Filing in Pakistan: Key Insights

Before registering and filing your income tax return, it is important to know some basic terms, For example, Taxable Income, Total Income, and basics of Income Tax Ordinance, 2001.

Taxable Income

Taxable income is the total income after deducting qualifying donations and certain deductible allowances. This is the amount on which tax is levied.

Total Income

Total income is the aggregate of all income that is chargeable to tax under each head of income.

Heads of Income

Under the Income Tax Ordinance, 2001, all income is divided into the following five heads of income:

  • Salary
  • Income from property
  • Income from business
  • Capital gains
  • Income from other sources

How to File Income Tax Return Online in Pakistan

The FBR offers an online system for taxpayers to file their returns easily. Individuals and businesses can submit their returns through the FBR’s e-filing portal. However, in case of complications, our tax lawyers in Pakistan can provide expert guidance. You may contact us or just fill out the query form for instant consultation.

Documents Required for Income Tax Return in Pakistan

To file a tax return, one must gather various documents, such as;

  1. Proof of income: for example, declared salary certificate in case of salary and all relevant documents if the income is been generteaed from one or more heads of income.
  2. Bank statements: Bank statements of the fiscal year/tax year to fetch the closing balance at the end of the financial year.
  3. Receipts for deductible expenses

How to Check Filer Status in Pakistan

A person can easily check whether is a filer or non-filer through the FBR’s online portal called Iris. In the iris, you can check by putting CNIC, NTN or Passport number to inquire about a taxpayer’s profile and see income tax filer status online.

Becoming a Filer in Pakistan for Salaried Persons

Tax filing for Salaried individuals is the easiest procedure. The essentials are to declare a wealth statement, i.e., total assets owned by a person and attach a declared salary certificate along with a bank statement. This way, salaried persons can register and become tax filers. Most registered enterprises deduct tax from salaries in advance. So, when a declared salaried person submits their income tax return, he may have to pay nothing as tax has already been deducted from his salary.

Below is the tax rate list for salaried persons:

The tax rates for salaried persons are specified under Section 149 [Division I, Part I of the First Schedule].

Taxable Income Range Tax Rate
Upto Rs.600,000
0%
Rs.600,000 to Rs.1,200,000
5% of the amount exceeding Rs.600,000
Rs.1,200,000 to Rs.2,200,000
Rs.30,000+ 15%
Rs.2,200,000 to Rs.3,200,000
Rs.180,000 + 25%
Rs.3,200,000 to Rs.4,100,000
Rs.430,000 + 30%
Exceeding Rs.4,100,000
Rs.700,000 + 35%

Becoming a Filer in Pakistan for Overseas Pakistanis

Pakistanis who live overseas must also file their tax returns if their income is taxable in Pakistan. The taxable income may include income from properties or investments within Pakistan or any other means of income generation. However, the procedure for them is the same.

Tax Return for Companies in Pakistan and Rate List

Companies operating in Pakistan are required to file their income tax returns annually. The applicable tax rates vary depending on the type of company and its income. Below is the table that shows year 2025 tax rates for companies.

The tax rates for companies are outlined in Division II, Part I of the First Schedule.

Type Tax Rate
Banking Company
39%
Public & Private Companies
29%
Small Companies
20%
Alternate Corporate Tax Sec-113C
17%
Modabra
25%

Surcharge on Tax Payable

If the taxable income of an individual or AOP exceeds 10 million, a surcharge of 10% on the tax payable is applied.

Tax Return for Individuals, Sole Owners, and Sole Proprietors in Pakistan and Rate List

Sole proprietors and owners must also file returns. Tax rates for individuals differ depending on their income level. For example, individuals earning up to PKR 600,000 annually are not subject to tax, while those earning more pay progressively higher rates.

Tax Return for AOPs (Associations of Persons) in Pakistan and Tax Rates

Associations of Persons (AOPs) also have tax filing requirements. An AOP is considered an entity whose income is taxed at progressive rates similar to individual taxpayers, depending on the total taxable income.

Below is the rates list for AOPs and individuals for the year 2025:

The tax rates for the tax year 2025 for individuals and AOPs are provided under Section 4 [Division I, Part I of the First Schedule].

Taxable Income Range Tax Rate
Upto Rs.600,000
0%
Rs.600,000 to Rs.1,200,000
15% of the amount exceeding Rs.600,000
Rs.1,200,000 to Rs.1,600,000
Rs.90,000 + 20%
Rs.1,600,000 to Rs.3,200,00
Rs.170,000 + 30%
Rs.3,200,000 to Rs.5,600,000
Rs.650,000 + 40%
Exceeding Rs.5,600,000
Rs.1,610,000 + 45%

Submitting Your Tax Return Online in Pakistan

After collecting the necessary documents, registered NTN holders can submit their returns online via the FBR portal. However, the process is quite simple, but sometimes it is suggested to seek legal guidance by contacting an expert tax lawyer such as our tax experts in Pakistan at LEX to ensure that all the obligations are met and take full benefits of being a taxpayer.

FBR Filer Registration: A Guide to the Process

To register as a filer with the FBR for individuals, AOPs, or companies, all must register themselves with the FBR and get their NTN registered. Complete an online NTN registration; after submitting personal or business details, income records, and other required documents, the NTN holder person or entity can file its income tax return.

Filer Status Check in Pakistan: What You Need to Know

Even after submitting all the requirements, it is important to check your filer status to ensure you’re not classified as a non-filer. The FBR’s online system provides a straightforward method to confirm both your registration status and whether a taxpayer is active or inactive. When engaging in ventures with other companies or individuals, it is sometimes important to check their filer status to ensure proper invoicing and to set up business terms accordingly.

Sale Tax Return in Pakistan

For businesses dealing with sales, it is mandatory to register for sales tax and obtain a Sales Tax Registration Number (STRN) and collect sales tax from the customers. Submitting a sales tax return is an essential requirement, ensuring that the business remits the correct sales tax amount to the government. Sales tax is maintained and filed monthly through invoices. Some businesses retain or hire tax experts to manage their sales tax obligations. At LEX, we provide experienced tax lawyers and tax consultants for every type of business entity, dedicated to ensuring sales tax compliance.

Sales Tax Invoicing

STRN registered businesses are required to issue sales tax invoices for each sale transaction. These invoices should contain specific information, including:

  • Invoice number and date
  • Seller’s name, address, and STRN
  • Buyer’s name, address, and (if applicable) STRN
  • Description of goods or services sold
  • Quantity and unit price of items sold
  • Total amount charged
  • Sales tax rate applied and the total amount of sales tax charged
  • Total payable amount, including sales tax

Conclusion

Filing income and sales tax returns in Pakistan is a legal obligation that brings numerous benefits, highlighting lower tax rates. Whether you are an individual, business owner, AOP, or an overseas Pakistani, understanding the tax filing process is important. If you need clarity or assistance, our team of expert tax lawyers at LEX is here to provide support at every step of the way, ensuring fully benefiting from being a registered taxpayer. Contact us today to discuss your tax compliance needs.

Note:

M/s Legally-Ethically-Expertly (LEX), a leading law firm with experienced lawyers, provides this article’s information for public awareness through our website, lex.com.pk. We strive to offer valuable insights to the general public but emphasize that this content should not be considered legal advice. Additionally, please note that the information provided here may be outdated as laws are amended regularly or may contain human error; therefore, we recommend not relying solely on this content. For personalized guidance or the most up-to-date information, we encourage our valued readers to contact our expert family lawyers in Pakistan by calling or WhatsApp at +92-310-8888539 or emailing info@lex.com.pk. We are here to assist with tailored solutions.

Frequently Asked Legal Questions

Q: Who is an active taxpayer in Pakistan?

An active taxpayer is a person (natural or legal) who submits income tax returns regularly without any defaults.

Q: How to become a tax filer in Pakistan?

By registering with the FBR and obtaining an NTN number, after which the individual must submit their income tax return to the FBR.

Q: How to file an income tax return online in Pakistan?

An income tax return can be submitted online. A person becomes an active filer by submitting their return online with the FBR using the Iris portal.

Q: How to become a filer in Pakistan for a salaried person?

The procedure is the same; salaried persons can also file their return with the FBR and gain active filer status.

Q: How to become a filer in Pakistan for overseas Pakistanis?

The procedure is the same; overseas Pakistanis can also file their return with the FBR and gain active filer status if they are generating income in Pakistan by any means.

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Note:

While we strive to provide accurate information, please note that the details in this article may contain human errors and are not meant to serve as legal opinion or advice. This content is purely for informational purposes. If you have a specific legal query or need further clarification, we warmly invite our valued readers to reach out to us by calling or WhatsApp at +92-310-8888539, or email at info@lex.com.pk. We are here to assist with tailored solutions.

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