How to file an income tax return in Pakistan and what are the benefits for a taxpayer is the question asked more often. Filing income tax returns in Pakistan is a vital financial obligation for individuals and businesses alike.
How To File Income Tax Returns In Pakistan In 2023
In this guide blog, you will learn how to file an income tax return in Pakistan with a comprehensive overview of the necessary steps and procedures, offering practical insights and tips to navigate the Pakistani tax system efficiently and accurately.
What Is Income Tax?
Income tax is money that individuals and businesses have to pay to the government based on the money they earn. The income tax like a portion or percentage taken from the income you make from your job, business, or investments.
The government uses this money to pay for things like schools, hospitals, roads, and other public services that benefit everyone in the country. The amount you have to pay is based on how much you earn and the rules set by the government about taxes.
For Example,
Imagine you earn 200,000 Pakistani rupees per year from your job. Let’s assume the government requires you to pay an income tax of 10%.
To find out how much tax you owe, you would calculate 10% of your income:
10% of 200,000 PKR = 20,000
Therefore, in this example, with an income of 200,000bPKR and a 10% income tax rate, you would owe 20,000 PKR as income tax to the government.
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Who Is Required To File Income Tax?
People in Pakistan who earn an annual income of 600,000 PKR or higher must file their tax returns. If you belong to this income category and have not yet submitted your taxes, it’s important to complete the process to become a taxpayer in Pakistan. There are several advantages associated with being a taxpayer, such as receiving benefits like tax exemptions, duty waivers, and more.
The Process Of Filing An Income Tax
The Federal Board of Revenue (FBR) is the government body that regulates the tax system of the country. You can file your income taxes on this platform online also.
However, the online process is individual and not for the association of a person or company. First of all, you have to register online or manually with your authentic documents. The process involves a few steps:
- Log in to the Iris online portal to file your Income Tax Return.
- If you’re filing income tax for the first time, you’ll need to register before submitting your Income Tax Return.
- After successfully registering, log in to Iris and proceed to file your Income Tax Return.
- For individuals with a National Tax Number (NTN) or Registration Number but lacking login credentials, follow the appropriate instructions on the portal to proceed.
- Once logged in, access the ‘Declaration’ menu located at the top of the portal.
- Select the tab related to forms, specifically the ‘114(1) Return of Income Filed Voluntarily for 1 Year’.
- Click on the ‘Period’ tab and enter the tax year for which you are filing your Income Tax Return.
- After that select the options according to the suitable situation.
These steps outline the process of how to file an income tax return in Pakistan online using the Iris platform in Pakistan.
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Documents Required For Income Tax
- Your valid national identity card is a must for the tax filing process.
- Ensure that the mobile phone you use is registered under your own CNIC.
- You need to have a personal email address for official correspondence.
- You should bring an official certificate indicating the maintenance of a personal bank account in your name.
- If you have a business, you must provide documentation showing your ownership or tenancy of the business premises.
- For businesses, a recently paid utility bill for the business premises, dated within the last three months, is necessary.
- These documents are essential for the income tax filing process in Pakistan and help ensure accuracy and transparency in your financial dealings with the government.
Paying The Demanded Tax
- After paying the demanded tax, whether through the Alternative Delivery Channel (ADC) or in cash by visiting an authorized National Bank of Pakistan branch. Proceed with the following steps:
- Submitting Payment Details:
- Access your account by logging in.
- Click on the ‘Payments’ tab and locate the ‘+’ sign at the top right corner of the screen.
- A dialogue box will appear, prompting you to enter payment details. Input the CPR number, Amount Code, or Paid Amount, and then click on the search option.
- The entire list of payment details will appear. Click ‘OK’ and then save the information.
Verifying and Submitting The Income Tax Return Form
- After adding and calculating all the required fields, it’s time to verify your identity. Your name and registration number will already be populated.
- Input the verification PIN provided during the registration process. Click on the ‘Verify Pin’ tab.
- Once the verification process is complete, you can file your income tax returns by clicking on the ‘Submit’ tab.
These steps ensure that your tax payments are properly recorded and that your income tax return is submitted accurately and in compliance with the established procedure in Pakistan.
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Conclusion
This was a comprehensive guide on how to file an income tax return in Pakistan. Filing income tax in Pakistan is not just a legal but also an important public responsibility.
By complying with the tax laws, individuals and businesses contribute to the country’s progress. Ensuring the provision of necessary public services.
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Reviewed By Mr.Rizwan Sajjad
