In brief: The return filing window for Tax Year 2026 (1st July 2025 to 30th June 2026) opened on the FBR IRIS portal on 1st July 2026. The due date under Section 118(3) of the Income Tax Ordinance, 2001 is 30th September 2026 for salaried individuals, other individuals and AOPs, and 31st December 2026 for companies with a 30th June year-end. This guide walks through the complete IRIS process — registration, the return form, the wealth statement, tax computation with worked examples, payment through PSID, and the consequences of missing the deadline.
1. The Legal Framework: Who Must File for Tax Year 2026?
The obligation to furnish a return of income arises under Section 114(1) of the Income Tax Ordinance, 2001. For Tax Year 2026 (1st July 2025 to 30th June 2026), you are required to file if, among other categories, you:
- Have taxable income exceeding Rs. 600,000 (the basic exemption threshold for individuals);
- Are a company or an AOP, regardless of income level;
- Were charged to tax in either of the two preceding tax years;
- Own immovable property of 500 square yards or more, or a flat, within municipal/cantonment limits, or own a motor vehicle above 1000cc;
- Hold a National Tax Number (NTN);
- Have commercial or industrial electricity connections with annual bills exceeding the prescribed threshold;
- Are a resident person registered with a professional body (chamber of commerce, bar council, PMDC, ICAP, etc.).
Resident individuals filing a return must also furnish a wealth statement under Section 116 together with a wealth reconciliation. Residents holding foreign income of USD 10,000 or more, or foreign assets of USD 100,000 or more, must additionally file the foreign income and assets statement under Section 116A.
A practical point our office repeats every filing season: even where income falls below the taxable threshold, filing a nil return keeps you on the Active Taxpayer List (ATL) and preserves reduced withholding rates on banking, property and vehicle transactions. The cost of filing is trivial compared to the withholding differential a non-filer suffers over a year.
2. Key Dates and Applicable Law
| Event | Date / Reference |
|---|---|
| Income period covered | Tax Year 2026 (1st July 2025 to 30th June 2026) — Section 74 |
| IRIS filing window opened | 1st July 2026 |
| Due date — individuals, salaried persons, AOPs | 30th September 2026 — Section 118(3) |
| Due date — companies (year ending 30th June 2026) | 31st December 2026 — Section 118(2) |
| Governing amendments | Finance Act, 2025 (effective 1st July 2025) |
One point of law that confuses taxpayers every July: the Finance Act, 2026 — which took effect on 1st July 2026 — applies to Tax Year 2027 (1st July 2026 to 30th June 2027), not to the return you are filing now. The return for Tax Year 2026 is governed by the Ordinance as amended by the Finance Act, 2025. Applying the wrong year’s rates is one of the most common self-filing errors we correct.
On extensions: FBR extended the Tax Year 2024 deadline to 31st October 2024, but for Tax Year 2025 it publicly refused any extension and held the 30th September date. Do not plan around an extension. An individual taxpayer may apply for a personal extension under Section 119 through IRIS before the due date, but the Commissioner’s discretion is narrow and an extension does not shelter you from default surcharge on unpaid tax.
3. Tax Rates Applicable to Tax Year 2026 (1st July 2025 to 30th June 2026)
3.1 Salaried Individuals (salary exceeds 75% of taxable income) — Division I, Part I, First Schedule
The Finance Act, 2025 reduced rates for salaried taxpayers. The slabs for Tax Year 2026 (1st July 2025 to 30th June 2026) are:
| Annual Taxable Income | Rate of Tax |
|---|---|
| Up to Rs. 600,000 | 0% |
| Rs. 600,001 – 1,200,000 | 1% of the amount exceeding Rs. 600,000 |
| Rs. 1,200,001 – 2,200,000 | Rs. 6,000 + 11% of the amount exceeding Rs. 1,200,000 |
| Rs. 2,200,001 – 3,200,000 | Rs. 116,000 + 23% of the amount exceeding Rs. 2,200,000 |
| Rs. 3,200,001 – 4,100,000 | Rs. 346,000 + 30% of the amount exceeding Rs. 3,200,000 |
| Above Rs. 4,100,000 | Rs. 616,000 + 35% of the amount exceeding Rs. 4,100,000 |
A surcharge of 9% of the income tax (reduced by the Finance Act, 2025 from 10%) applies where taxable income exceeds Rs. 10 million (Section 4AB).
3.2 Non-Salaried Individuals and AOPs
Rates for business individuals and AOPs were left unchanged by the Finance Act, 2025 and continue at 0% up to Rs. 600,000, rising through progressive slabs of 15%, 20%, 30%, 40% and a top marginal rate of 45% above Rs. 5.6 million. Because business taxpayers frequently also have property income, capital gains and minimum-tax exposure under Section 113, we would encourage business filers to have the computation reviewed professionally rather than relying solely on IRIS auto-calculation.
4. Documents to Assemble Before You Log In
- CNIC and IRIS login credentials (your 13-digit CNIC serves as the NTN for individuals);
- Salary certificate / annual tax deduction certificate from your employer showing gross salary and tax withheld under Section 149;
- Bank statements for all accounts for the period 1st July 2025 to 30th June 2026, plus profit-on-debt and withholding certificates under Section 151;
- Withholding certificates for tax collected on mobile/internet (Section 236), vehicle token tax, electricity, property transactions (Sections 236C/236K), and cash withdrawals if applicable;
- Details of assets: property documents, vehicle registrations, investment certificates, prize bonds, insurance policies, loans given/taken, and closing cash balances — needed for the Section 116 wealth statement;
- For business filers: books of account, sales/purchase summaries, and financial statements;
- Prior year’s return and wealth statement (your closing balances become this year’s opening balances).
Before entering figures manually, cross-check FBR’s own records. IRIS carries a MIS / Maloomat facility showing withholding tax reported against your CNIC by banks, employers and withholding agents. Claiming credit for tax that the withholding agent never deposited is a recurring cause of Section 120 adjustments and refund disputes, so reconcile your certificates against Maloomat first.
5. Step-by-Step: Filing on IRIS
Step 1 — Register (first-time filers only)
Go to iris.fbr.gov.pk and select “Registration for Unregistered Person.” Enter your CNIC, name, address, contact details and source of income. Verification codes are sent to your mobile number (registered in your own name) and email. On completion, your CNIC is activated as your NTN and a password is issued. AOPs and companies require e-enrollment with the partnership deed or incorporation certificate; where online enrollment fails, the concerned RTO completes it on presentation of documents.
Step 2 — Log In and Open the Return
Log in with your CNIC/NTN and password. From the dashboard, navigate to Declaration → Income Tax Return and select Tax Year 2026. Salaried persons and most individuals proceed on the return of income under Section 114(1); IRIS presents the salary return interface where salary is the dominant income source, and the normal return (with business schedules) for business individuals and AOPs.
Step 3 — Declare Income Under Each Head
Income is classified under Section 11 into salary, income from property, income from business, capital gains and income from other sources. In practice:
- Salary: enter gross salary per your employer certificate, including allowances and perquisites; enter tax deducted under Section 149 in the adjustable tax tab.
- Property: declare gross rent; deductions under Section 15A apply to individuals/AOPs computing property income under the normal regime.
- Profit on debt: bank profit is generally taxed under Section 7B/151 — enter the gross profit and the 15% withholding from your bank certificate.
- Capital gains: disposals of immovable property (Section 37(1A)) and listed securities (Section 37A) go into the capital gains schedule; note that for property acquired on or after 1st July 2024, gains are taxed at flat ATL rates without holding-period reduction.
- Foreign-source income / IT exports: freelancers and exporters registered with PSEB should declare export proceeds under the correct final/reduced-rate codes with remittance certificates retained on file.
Step 4 — Enter Adjustable and Final Taxes
Under the “Tax Chargeable / Payments” section, enter every withholding credit: salary (149), profit on debt (151), telephone and electricity (235/236), vehicle taxes (231B/234), property advance tax (236C/236K), and any advance tax paid under Section 147. IRIS computes tax chargeable, deducts credits, and shows either admitted tax payable or a refundable amount.
Step 5 — Complete the Wealth Statement (Section 116)
Declare all personal assets and liabilities at cost as at 30th June 2026: immovable property, vehicles, bank balances, investments, business capital, loans and advances, jewellery, and cash in hand. Then complete the reconciliation: the increase (or decrease) in your net assets over the year must be explained by declared income, minus taxes paid and personal expenses, plus any exempt receipts (gifts, inheritance, foreign remittances through banking channels under Section 111(4)).
The unbreakable rule: the reconciliation must balance to zero. An unreconciled difference is, in substance, an invitation to a Section 111 unexplained-income addition and, eventually, a Section 122 amendment. If your assets grew faster than your declared income, resolve the explanation (documented gift deed, inheritance certificate, remittance proceeds realization certificate) before filing, not after a notice arrives.
Step 6 — Pay Any Admitted Liability (PSID → CPR)
If tax is payable, generate a PSID (Payment Slip ID) through IRIS or the e-Payments portal, and pay via internet/mobile banking (1Link/ADC), ATM or a National Bank branch. The system issues a Computerized Payment Receipt (CPR), which auto-populates against your return. Under Section 137, tax payable on the return is due at filing; unpaid amounts attract default surcharge under Section 205.
Step 7 — Verify and Submit
Run the completeness check, verify through the PIN/verification code, and submit. IRIS generates an acknowledgement slip — download and preserve it together with the return, wealth statement and CPRs. Your return is then treated as an assessment order under Section 120 upon filing (subject to automated adjustments under Section 120(2A), for which IRIS issues a notice before making arithmetic or apparent-error corrections).
Step 8 — Confirm ATL Status
Filers for Tax Year 2026 who file by the due date appear on the ATL published on 1st March 2027. Until then, your Tax Year 2025 filing governs your current ATL status. Verify anytime by SMS: type ATL (space) 13-digit CNIC and send to 9966, or check the ATL search on fbr.gov.pk.
6. Worked Examples
Example 1 — Salaried Individual, Rs. 1,800,000
Mr. A, employed in Lahore, earned gross salary of Rs. 1,800,000 during Tax Year 2026 (1st July 2025 to 30th June 2026). His employer deducted Rs. 66,000 under Section 149.
- Tax on first Rs. 1,200,000 = Rs. 6,000
- 11% × (1,800,000 − 1,200,000) = Rs. 66,000
- Total tax chargeable = Rs. 72,000
- Less: tax deducted at source = Rs. 66,000
- Admitted tax payable with return = Rs. 6,000 (paid via PSID before submission)
Example 2 — Salaried Individual, Rs. 2,400,000, with Bank Profit
Ms. B earned salary of Rs. 2,400,000 and bank profit of Rs. 200,000 (bank deducted 15% = Rs. 30,000 under Section 151).
- Tax on salary: Rs. 116,000 + 23% × (2,400,000 − 2,200,000) = Rs. 116,000 + 46,000 = Rs. 162,000
- Profit on debt taxed separately at 15% under Section 7B = Rs. 30,000 (fully covered by the bank’s withholding)
- If her employer deducted Rs. 162,000 through the year, nothing further is payable; the return still must be filed to remain on the ATL.
Example 3 — Wealth Reconciliation
| Particulars | Rs. |
|---|---|
| Net assets as at 30th June 2026 | 6,200,000 |
| Net assets as at 30th June 2025 | (5,000,000) |
| Increase in net assets | 1,200,000 |
| Declared income (salary) | 1,800,000 |
| Less: income tax paid | (72,000) |
| Less: personal and household expenses | (528,000) |
| Amount available for accretion | 1,200,000 |
| Unreconciled difference | Nil |
Personal expenses must be realistic. Declaring household expenses of Rs. 15,000 a month against a family of five in a posh locality is precisely the kind of pattern FBR’s data analytics now flags for audit selection.
7. What Happens If You Miss 30th September 2026?
- Penalty under Section 182: the higher of 0.1% of the tax payable for each day of default or Rs. 1,000 per day, subject to statutory minimum penalties (Rs. 10,000 for individuals in most cases, with a reduced minimum for predominantly salaried taxpayers) and maximum caps linked to the tax payable.
- Loss of ATL status: your name does not appear on the ATL published 1st March 2027 until you file and pay the ATL surcharge under Section 182A — Rs. 1,000 for individuals, Rs. 10,000 for AOPs, Rs. 20,000 for companies. Off the ATL, withholding on banking, property and vehicle transactions applies at roughly double rates.
- “Late filer” treatment: since the Finance Act, 2024, a person who filed after the due date faces intermediate “late filer” advance tax rates on property transactions under Sections 236C and 236K — higher than filer rates even after paying the ATL surcharge. Timely filing is the only way to avoid this middle category.
- Default surcharge (Section 205) on any unpaid admitted tax, and exposure to a best-judgment assessment under Section 121 if a Section 114(4) notice for a missed return goes unanswered.
- Restrictions on non-filers: Section 114C (inserted by the Finance Act, 2025) empowers restrictions on major economic transactions — vehicle bookings, property registrations and securities investments above notified thresholds — by “ineligible persons,” subject to FBR notifications. The direction of policy is unmistakable: non-filing is becoming operationally expensive, not just fiscally.
If you have missed earlier years as well, do not file multiple back-year returns in one sitting without a properly built multi-year wealth reconciliation. A rushed backlog filing frequently creates the very discrepancies that Section 122(1) proceedings are later built on — a problem our office regularly untangles at the appellate stage that could have been avoided at the filing stage.
8. Common Mistakes We Correct Every Season
- Applying Finance Act, 2026 rates to the Tax Year 2026 return (the correct law is the Finance Act, 2025).
- Claiming withholding credits not verifiable in Maloomat, leading to Section 120(2A) adjustments.
- Reporting bank balances from memory instead of the 30th June 2026 statement figure.
- Omitting an inherited or gifted asset from the wealth statement because “no tax was due on it” — exemption from tax is not exemption from declaration.
- Declaring property at market value instead of cost, which distorts every future year’s reconciliation.
- Freelancers routing export proceeds through personal accounts without remittance certificates, then struggling to claim reduced rates.
- Forgetting to press Submit. A return saved in draft is not a return filed. IRIS drafts do not stop Section 182 penalties.
9. Frequently Asked Questions
Q1. I am salaried and my employer deducted full tax. Do I still need to file?
Yes. Deduction at source under Section 149 discharges the tax, not the filing obligation under Section 114. Non-filing costs you ATL status and invites notices.
Q2. Can I revise my return if I discover a mistake?
Yes, under Section 114(6), subject to the conditions in that subsection (including, in certain cases, the Commissioner’s approval and filing of a revised wealth statement under Section 116(3)). Revise promptly and voluntarily — a self-initiated revision is treated very differently from a correction made after a notice.
Q3. What about overseas Pakistanis?
Non-residents with Pakistan-source income (rent, capital gains, business income) file by the same 30th September 2026 date. Non-resident individuals are generally not required to file the Section 116 wealth statement for foreign assets, but Pakistan-source income and Pakistani assets must be properly declared. Roshan Digital Account holders should keep remittance trails intact.
Q4. My refund from last year is still pending. Can I adjust it?
A determined refund can be applied against current liability, but where the refund under Section 170 remains undisposed of, the correct remedies are a refund application, follow-up, and — where the department sits on it beyond the statutory period — a complaint to the Federal Tax Ombudsman. We have obtained FTO-directed disposals of stale Section 170(4) claims for clients where RTOs failed to act.
Q5. Is an extension expected this year?
Treat 30th September 2026 as final. FBR refused an extension for Tax Year 2025 and has signalled the same posture. File in August; the last week of September is when IRIS is slowest and mistakes are most likely.
10. Final Word
Filing on IRIS is procedurally straightforward for a clean salaried case. The risk sits elsewhere: in the wealth reconciliation, in withholding credits that do not match FBR’s records, in property and capital gains schedules, and in business computations where minimum tax and withholding regimes interact. Those are the entries that generate Section 122 notices two or three years later — and defending an amendment is always costlier than filing correctly the first time.
Need your Tax Year 2026 return filed correctly?
H.S. Advocate & Co. — Advocates & Corporate and Tax Consultants — prepares and files returns for salaried individuals, business proprietors, AOPs and companies, with full wealth reconciliation and representation before FBR as Authorized Representative.
📍 Office No. 72, 5th Floor, Rajpoot Heights, Begum Road, Mozang, Lahore | 📞 0344-4444703 | 🌐 hsadvocate.com
Disclaimer: This article is for general information only and does not constitute legal or tax advice. References are to the Income Tax Ordinance, 2001 as amended by the Finance Act, 2025, applicable to Tax Year 2026 (1st July 2025 to 30th June 2026). Deadlines and procedures should be verified against current FBR notifications before acting. For advice on your specific circumstances, consult H.S. Advocate & Co.