Why You Must File Even If Your Employer Deducts Tax
A widespread misconception among Pakistani salaried professionals is that if their employer already deducts income tax under Section 149, they do not need to file an annual income tax return.
Under the Pakistani Income Tax Ordinance 2001, any individual earning more than Rs. 600,000 per year (Rs. 50,000/month) is legally required to submit an annual return of income on the FBR Iris portal.
Filing your tax return enters you into the Active Taxpayer List (ATL), granting you 50% to 100% lower withholding tax (WHT) rates across banking transactions, vehicle token tax, property purchases, and international credit card transactions.
Non-filers in Pakistan pay double or triple WHT: 0.6% on cash withdrawals exceeding Rs. 50,000/day, 35% on bank savings profit (vs 15% for filers), and up to 10% on international card spend.
Documents Checklist Before You Start
Before logging into the Iris portal, ensure you have gathered all necessary documentation covering the financial period from July 1, 2025 to June 30, 2026 (Tax Year 2026-27):
- CNIC and Iris Portal Login Credentials (Password & 4-digit PIN)
- Annual Salary Certificate / Form 16 provided by your HR/Accounts department
- Full Bank Account Statements (July 1 to June 30) for all accounts (HBL, Meezan, UBL, SadaPay, etc.)
- Tax Deduction Certificates for Mobile Phone Bills, Nayatel/Electricity Bills, and Bank Profit
- Zakat Payment Receipts or Bank Zakat deduction certificates (CZ-50)
- Details of any new assets bought or sold (Gold, Vehicles, Property, Mutual Funds)
Step-by-Step Filing on Iris 2.0 Portal
Follow these practical steps once you log into the FBR Iris system (iris.fbr.gov.pk):
1. Navigate to 'Declaration' on the top navigation bar and select 'Return for Salaried Person' (Form 114(1) - Classic/Salary).
2. Enter Tax Period: Select '2026' or '2027' corresponding to the tax year.
3. Fill Salary Income: Under Employment > Salary, enter your annual gross salary code [1000]. The system will auto-compute taxable income and tax liability based on the progressive slabs.
4. Apply Deductibles: Under Deductible Allowances, enter compulsory Zakat paid under Section 60, Medical Allowance under Section 10(1), or contributions to recognized provident funds.
5. Complete the Wealth Statement (Form 116): This is mandatory. You must declare all closing assets (bank balances on June 30, cash in hand, motor vehicles, gold) and reconcile your opening wealth + current year income - annual expenses.
| FBR Field Name | Iris Code | What to Enter in PKR |
|---|---|---|
| Gross Salary / Remuneration | Code 1000 | Total salary before tax deductions |
| Compulsory Zakat Deducted | Code 9000 | Bank Zakat deducted on 1st Ramadan |
| Tax Deducted by Employer | Code 64010001 | Total WHT deducted on your payslips |
| Closing Bank Balances | Code 7006 | Exact balance across all accounts on June 30 |
| Annual Personal Expenses | Code 7089 | Household expenses, utilities, travel, fuel |
How Kepto Simplifies Your Wealth Reconciliation
The hardest part of filing an FBR return is calculating your exact annual personal expenses (Code 7089) and your exact closing balances across multiple bank accounts.
By uploading your annual PDF statements from HBL, Meezan, UBL, or SadaPay to Kepto, all income credits, utility bills, rent payments, fuel, and Zakat are automatically categorized in PKR.
You can generate a consolidated Tax Summary report in 1 click to hand directly to your tax consultant or input directly into Iris.
Automatically Analyze Your Bank Statement in Seconds
No manual data entry. Upload your HBL, Meezan, UBL, or SadaPay PDF to generate instant spending breakdowns, tax expense reports, and annual cash summaries.
Frequently Asked Questions
What is the deadline for filing FBR tax returns in Pakistan for FY 2026-27?
The official deadline for salaried individuals and individuals without audited accounts is September 30 each year, unless officially extended by the Federal Board of Revenue via SRO notification.
What happens if I submit my tax return late?
Filing after the deadline incurs a late filing penalty under Section 182 and may require payment of an ATL surcharge (Rs. 1,000 for salaried individuals) to appear on the Active Taxpayer List.
Can freelancers in Pakistan file under the Final Tax Regime (FTR)?
Yes. IT and IT-enabled service exporters registered with PSEB who bring foreign remittances via banking channels pay a concessionary 0.25% or 1% withholding tax, which constitutes full and final tax discharge under Section 154A.