Every FBR term explained in plain English with the Income Tax Ordinance 2001 section reference. Search or jump by letter.61 terms.
The ATL determines whether a taxpayer pays filer or non-filer withholding rates. Filing after the deadline still gets you on the ATL, but only after paying the Section 182A surcharge (PKR 1,000 for individuals, PKR 10,000 for AOPs, PKR 20,000 for companies). ATL year runs 1 March to 28 February.
AOPs include registered and unregistered partnerships, joint ventures, and family co-ownerships. Taxed on non-salaried slabs. Individual partners cannot separately tax their share of AOP profit; the AOP pays once at entity level.
Payable by every non-salaried person whose latest assessed income tax exceeded PKR 1M. Four instalments due 25 September, 25 December, 25 March, 15 June. Failure to pay attracts Section 205 default surcharge.
Pakistan CGT rates depend on the asset type and holding period. Listed securities (Section 37A): 15% flat since Finance Act 2024 for post-2024 acquisitions. Immovable property (Section 37(1A)): schedule based on years held. Mutual funds: Eighth Schedule rates.
Every Pakistani citizen 18 or older has a CNIC. Once activated on IRIS, the CNIC IS the NTN for individuals - no separate number is issued. Companies and AOPs get separate 7-digit NTNs from FBR at registration.
Distinct legal person separate from shareholders. Governed by SECP + FBR. Corporate rates are flat, not slab-based. Small company definition (turnover, paid-up capital) tightens periodically via Finance Acts.
Statutory conveyance for salaried employees is exempt to the extent notified. Company-provided car for personal use is taxed as a perquisite valued under prescribed rules.
Post-July-2024 acquisitions: flat 15% for both listed shares and stock mutual funds. Money market / income funds: 15% for individuals, 25% for companies. Broker deducts on the trading platform; AMC on redemption.
Established under the Federal Board of Revenue Act 2007. Administers the Income Tax Ordinance 2001, Sales Tax Act 1990, Federal Excise Act 2005, and Customs Act 1969. Operates the IRIS online portal at iris.fbr.gov.pk. Sales tax on services is administered provincially (PRA, SRB, KPRA, BRA), not by FBR.
Filers pay lower withholding rates on banking, vehicles, property, dividends, and cash withdrawals. Filing a NIL return keeps you on the ATL even if your income is below the PKR 600,000 exemption. Filer status is per-tax-year and refreshed weekly on Monday.
Form 114 covers salary, business, capital gains, dividend, rental, and other income. Companies file the separate Form 115. Filed via iris.fbr.gov.pk before 30 September following the tax year. IRIS confirms submission with Form 114A (Acknowledgement Receipt).
Declares net worth at year-end plus a Reconciliation of Net Assets showing that closing net wealth equals opening plus inflows minus outflows. An unreconciled amount above roughly PKR 500,000 is the standard FBR audit trigger. No income threshold - applies to salaried employees and NIL filers alike.
Common final taxes: Section 150 (dividend), Section 151 (profit on debt), Section 154A (PSEB IT exports 0.25%). Contrast with adjustable WHT (salary, mobile, banking, vehicle) which can be reclaimed at year-end.
Prevents double taxation. Only available on non-final-tax foreign income. PSEB freelancers taxed under Section 154A cannot claim credit on their PSEB receipts (final tax rules). Requires PRC or foreign tax receipt as evidence.
Approved gratuity fund + retirement benefit received on cessation. Government gratuity is fully exempt. Non-approved gratuity taxed as salary income in the year of receipt at slab rates.
Employer-paid HRA reduces taxable salary within the statutory cap. Rent actually paid must equal or exceed the exemption claimed. Applies only to salaried employees in a rented accommodation.
Administers KP sales tax on services rendered in the province. Sales tax on goods remains federal (FBR).
Section 205 charges KIBOR + 3% per annum on unpaid tax from the due date. Currently around 12-14% depending on SBP policy rate; total default surcharge runs 15-17% per annum. Materially larger than Section 182 late-filing penalty at higher tax amounts.
Applies where the employer provides a cash medical allowance in lieu of actual reimbursement. If actual medical bills are reimbursed, the full amount is exempt.
IRIS registration requires a mobile SIM registered against the same CNIC in NADRA's Pakistan Mobile Database (PMD). FBR won't send an OTP to a SIM registered on someone else's CNIC - a common IRIS registration blocker.
Anyone whose income is below the PKR 600,000 exemption can file NIL. Takes 15-20 minutes on IRIS, costs nothing, and keeps you at filer WHT rates on every future banking, vehicle, or property transaction. The ATL premium on one large transaction usually pays for a decade of NIL filing.
Two options: 87.48g gold Nisab (higher threshold, most middle-class filers use this) or 612.36g silver Nisab (lower, applies to more people). Zakat is 2.5% of net zakatable wealth above Nisab held for one lunar year. Deductible from taxable income under Section 60.
Non-filer WHT rates: property transfer 10.5% vs 3%, dividend 30% vs 15%, profit on debt up to 35% vs 15%, cash withdrawal above PKR 50k 1.2% vs 0.6%. A single non-filer property purchase can cost more than a full decade of compliance fees.
Required under Section 181 for anyone liable to file. Individuals activate their CNIC as an NTN via IRIS registration. Companies get their NTN at incorporation with SECP. Banks require an NTN to open a business current account.
PRA covers services rendered in Punjab: telecom, restaurants, hotels, professional services, insurance, banking, courier, advertising. Federal sales tax on goods is FBR's remit. Sales tax on services is provincial - PRA (Punjab), SRB (Sindh), KPRA (KPK), BRA (Balochistan), ICT-ST (Islamabad).
Issued by any scheduled bank when foreign currency lands in a Pakistani account. Section 111(4) exempts foreign remittance from unexplained-income addition only when routed through banking channels and supported by a PRC. PSEB freelancers also need PRC to claim the 0.25% final tax under Section 154A.
PSEB-registered exporters pay a flat 0.25% final tax under Section 154A on export receipts, extended to 30 June 2029 by Finance Act 2025. Non-PSEB freelancers fold their foreign-currency receipts into business income at normal slab rates - usually much higher.
Exempt regardless of source (government, private, foreign). Commuted pension (lump-sum) up to 50% of the entitlement is also exempt. Pension exceeding PKR 10M annually was proposed to be taxed at slab rates in Finance Act 2025 discussions but not enacted.
The single most-missed IRIS validation. Any unreconciled amount above ~PKR 500k triggers Section 122(9) audit notice. Fixed by adding missing gifts, remittance, personal expenses, or loan repayments - not by doctoring asset totals.
Introduced by Finance Act 2022, refined in 2023, 2024, 2025. Applies at 1% for income PKR 150M-200M, up to 10% at PKR 500M+. Companies pay in addition to the general 29% rate. Individuals rarely hit the entry threshold unless business income is very high.
Three regimes: (1) pre-July 2013 acquisitions are fully exempt; (2) 2013-2024 acquisitions follow the holding-period schedule (0% after 6 years down to 15% under 1 year); (3) post-July 2024 acquisitions taxed at flat 15%. Broker deducts at source under Eighth Schedule.
Ensures loss-making or thin-margin businesses still pay something. The higher of regular slab tax or 1.25% of turnover applies. Excess minimum tax can be carried forward and adjusted in later profitable years.
The section behind most FBR audit notices. Triggered when the wealth statement doesn't reconcile, when spending exceeds declared income, or when assets appear without a matching source. Foreign remittance is exempt from Section 111 addition only if routed via bank and supported by PRC.
Triggers: taxable income above PKR 600k; holds an NTN; owns 500+ sq yards property or PKR 25M+ flat; owns 1000cc+ vehicle; runs business / freelance / receives foreign remittance. Even one trigger makes filing mandatory. Section 114(6) allows revising a filed return within 5 years.
Covers assets, liabilities, personal expenses, and reconciliation of net assets. Salaried employees, NIL filers, and first-time filers all owe a wealth statement. Missing wealth statement makes the return incomplete.
Employer projects the employee's annual taxable salary, computes annual tax under salaried slabs, and divides by 12 for the monthly deduction. Bonuses and mid-year increments trigger re-projection. Deducted WHT is adjustable at year-end against the employee's final liability.
Deducted at source by the paying company or CDC. Being final tax, it cannot be reduced by tax credits or losses. Mutual fund dividends taxed under a separate Eighth Schedule sub-rate. Reduced to 7.5% for companies whose only income is dividend.
Rates by amount: 15% up to PKR 5M profit, 17.5% up to PKR 25M, 20% above. Non-filers pay up to 35%. Being final tax, not refundable and not adjustable against other income. Banks deduct at source at year-end or on interest credit.
Applies only to PSEB-registered exporters with valid registration for the tax year. Non-PSEB freelancers with foreign-currency receipts pay normal slab rates on those receipts - usually 10-20× higher. Final tax means no credit for foreign tax paid.
Scales linearly from day 1 after the deadline. Combined with the Section 182A ATL restoration surcharge and Section 205 default surcharge on unpaid tax, the true cost of late filing is significant. NIL filers face the PKR 40k minimum only.
Introduced by Finance Act 2019. Paid via challan on IRIS at the time of filing the late return. Once paid and return submitted, the taxpayer appears on the next Monday's ATL refresh.
Applies to any income tax remaining unpaid past the filing deadline. Runs at Karachi Inter-Bank Offered Rate + 3% - roughly 25-27% per annum in current conditions. Materially larger than the Section 182 late-filing penalty when tax payable is significant.
Excise office deducts at source. Rates rise sharply with engine size and are higher for non-filers. Adjustable against annual liability. Section 231B(2A) covers on-money on unregistered vehicles.
Domestic bills up to PKR 25k monthly are exempt. Commercial bills carry a progressive rate. Adjustable against annual liability for filers, final tax for many non-filers.
Deducted by the telco at source on every top-up, monthly bill, and internet package. Refundable via annual return for filers whose total WHT exceeds annual tax liability. Telco issues an annual WHT certificate.
Rates: 3% (filer), 10.5% (non-filer) for TY 2025-26 filings. Deducted at the registrar / sub-registrar. Adjustable against annual liability for filers. The non-filer premium here is the single largest ATL-based transaction cost.
Rates: 3% (filer), 10.5% (non-filer) same as Section 236C. Buyer's advance tax is adjustable against the year's income tax liability. Property registrar collects at execution of transfer.
Only applies to withdrawals above the PKR 50k threshold. Non-filer premium (double rate) accumulates fast for cash-heavy businesses. Adjustable against annual liability for filers.
Standard rate 10% (services), 4-7.5% (goods), 6.5% (contracts) for filers. Non-filer rates are 1.4-2x higher. Adjustable / minimum tax depending on payer status. Most freelancers invoicing corporate clients see 10% deduction here.
Applies exclusively to scheduled banks. General corporate tax rate is 29%, banking companies pay 39% base plus super tax. Governs bank-specific deductions, provisions, and interest treatment.
Divided into Parts I (exempt income), II (reduced rates), III (reduced tax liability), and IV (exemption from specific provisions). Includes pension, gratuity, foreign remittance, PSEB, agricultural income, and dozens of sector-specific concessions.
SRB covers services rendered in Sindh. Federal sales tax on goods is separate (FBR). Registered service providers file monthly returns and pay SST via SRB portal.
SECP registration is separate from FBR NTN. Every company must maintain both. SECP also regulates mutual funds, brokers, insurance companies, and Modarabas.
SROs change rates, extend deadlines, grant exemptions, or clarify procedures. Take effect on publication in the official gazette. The primary mechanism through which FBR alters tax policy between Finance Acts.
No separate legal entity. Business income folds into the individual's Form 114. Bank accounts and NTN remain in the individual's name. Contrasts with private limited companies, which are separate legal persons taxed under Section 18 corporate rates.
Definition under Section 2(59A) - paid-up capital + reserves not exceeding PKR 50M, annual turnover not above PKR 250M, employee count under 250. Excluded: companies formed by splitting existing entities.
TY 2025-26 = 1 July 2025 to 30 June 2026, filed by 30 September 2026. Companies can elect a special tax year (calendar year most commonly) subject to FBR approval.
Applies to salary (Section 149), dividend (150), profit on debt (151), services (153), cash withdrawals (231A), vehicles (231B), electricity (235), telecom (236), and property (236C/K). Adjustable WHT is claimed as credit on the annual return; final WHT is not.
Deductible from taxable income under ITO Section 60. Deducted at source by banks on saving accounts on 1 Ramadan each year (currently applied at Nisab set by government notification). Non-Muslims can opt out via CZ-50 declaration.