Income Tax Ordinance, 2001 · Finance Act 2026 · Withholding & Advance Tax Series

Filer vs Non-Filer in Pakistan: ATL Benefits and Tax Differences in Tax Year 2027

By Ch. Haseeb Sharif, Advocate High Court. H.S. Advocate & Co., Advocates & Corporate and Tax Consultants, Lahore.
Authorised Representative before the Federal Board of Revenue and the Securities and Exchange Commission of Pakistan. LL.M (Commercial Law), UMT. DTL, University of the Punjab.

Tax Year 2027 (1st July 2026 to 30th June 2027). Prepared by H.S. Advocate & Co.

The short answer: filer vs non-filer at a glance

A filer is a person whose name appears on the Federal Board of Revenue’s Active Taxpayers List (ATL) for the relevant tax year. A non-filer is anyone who does not. In Tax Year 2027 (1st July 2026 to 30th June 2027) the difference looks like this:

Common transaction	Filer (on ATL)	Non-filer (not on ATL)
Buying property, s.236K	1.25%	10.5% to 18.5%
Selling property, s.236C	2.75%	Tiered by consideration
Registering a car (1,800cc)	3%	9% (tripled)
Cash withdrawal over Rs 50,000 a day	Nil	0.8%
Profit on bank deposits	20%	40%
Dividend	15%	30%
Contract receipt (individual)	8%	16%
Salary, s.149	Slab rates	Slab rates. No difference.

Under Rule 1 of the Tenth Schedule, a non-filer’s withholding rate is the ordinary rate increased by 100%, which means it doubles. Three exceptions run through this article. Motor vehicles are tripled rather than doubled. Sections 236C, 236G, 236H and 236K carry their own fixed non-filer rates instead. And a short list of provisions, salary among them, does not increase at all.

1. Why the chart in your WhatsApp group is now wrong

A comparison table bearing the words فائلر بنیں، ٹیکس بچائیں has been forwarded through Pakistani business groups for two years. Nobody faked it. It reflected the law reasonably well when it was made, and it has simply not aged with the statute.

Withholding rates in Pakistan are not fixed features of the tax system. They live in the First Schedule to the Income Tax Ordinance, 2001, and every Finance Act rewrites the First Schedule. A chart drawn from the Finance Act 2024 was already stale by July 2025, and it is now two Finance Acts behind. Here is where it diverges on the lines that matter most:

Transaction	In the circulating chart (filer / non-filer)	Position in Tax Year 2027
Purchase of property, s.236K	1.25% / 10.5%	Flat 1.25% for ATL persons regardless of value. Non-ATL remains a tiered slab.
Sale of property, s.236C	2.75% / 11.5%	Flat 2.75% for ATL persons regardless of consideration. Non-ATL remains tiered.
Cash withdrawal, s.231AB	0% / 0.8%	Unchanged.
Vehicle registration, s.231B	5% / 10%	0.5% to 12% by engine capacity, increased 200% off the ATL. Tripled, not doubled.
Services, s.153(1)(b)	11% / 22%	Restructured. Specified 7%/14%, other 14%/28%, professionals 15%/30%.
Purchase and sale of shares	Yes / No	Materially worse for non-filers. See section 6.

The point is not that the chart was ever dishonest. It is that a percentage figure has a shelf life of one financial year, and a taxpayer planning a Rs 50 million transaction on a two-year-old screenshot is not really planning at all.

2. Where “filer” actually comes from in the statute

It is worth being precise here, because the word “filer” does not appear in the Ordinance as an operative term. Four provisions do the work.

1. Section 181A establishes the Active Taxpayers List, the register of persons who have filed their return for the relevant tax year.
2. Section 100BA provides that the tax of persons not on the ATL is determined under the rules in the Tenth Schedule.
3. The Tenth Schedule, Rule 1 is the engine. The rate of tax deducted or collected from a person not on the ATL is increased by one hundred per cent.
4. Rule 10 of the Tenth Schedule carves out the exceptions, the provisions where filing status makes no difference.

So it is misleading to say that filers get a discount. The First Schedule rate is simply the rate, and persons off the ATL pay a statutory uplift of 100% on top of it, unless the transaction falls within a Rule 10 carve-out or the relevant Division of the First Schedule prescribes its own separate non-filer figure. That last category matters more than most commentary allows, and it explains why the property sections behave so differently from everything else.

3. Three categories became two: the Late Filer is gone

This is the most consequential change of the year, and also the one least reported.

The Finance Act 2024 inserted Rule 1A into the Tenth Schedule, creating a middle tier. A “Late Filer” appeared on the ATL but had filed after the due date, paying more than an active filer and less than a non-filer, and only on sections 236C and 236K. The Finance Act 2025 then widened that gap further.

The Finance Act 2026 has omitted Rule 1A altogether. A person who files late, satisfies section 182A and is thereby restored to the ATL now attracts exactly the same withholding rates as a person who filed on the due date. The penalty for lateness is the surcharge, and nothing beyond it.

Rule 1A of the Tenth Schedule stands omitted with effect from 1st July 2026.

For a client who missed the 30th September deadline last year and has been paying an inflated rate on property purchases ever since, this is a material saving. It is also one that many transfer offices, still working from printed 2025 cards, will not apply unless somebody puts it to them.

4. The master comparison, section by section

The following states the rates for Tax Year 2027 (1st July 2026 to 30th June 2027). Where two figures appear, the first is for persons on the ATL and the second for persons not on it.

Banking, investment and passive income

Section	Nature of receipt	On ATL	Not on ATL
231AB	Cash withdrawal over Rs 50,000 per day	Nil	0.8%
151	Profit on bank deposits	20%	40%
151	National Savings and Post Office accounts	15%	30%
150	Dividend, general	15%	30%
150	Dividend from a company paying no tax	25%	50%
150	Dividend from an SPV (other recipients)	35%	70%
151(1A)	Sukuk return, corporate holder	25%	50%
151A	Gain on disposal of certain debt securities (up from 15%)	20%	40%
151B	Life insurance or takaful payout within 1 year (new)	15%	30%
151B	Life insurance or takaful payout, 1 to 4 years (new)	10%	20%
156	Prize bond and crossword winnings	15%	30%
156	Raffle, lottery, quiz and promotion prizes	20%	40%

Business receipts: goods, services and contracts

Section	Nature of payment	On ATL	Not on ATL
153(1)(a)	Supply of goods, company	5%	10%
153(1)(a)	Supply of goods, individual or AOP	5.5%	11%
153(1)(b)	Specified services: transport, courier, security, engineering, hotel, warehousing, telecom, travel and tour, and the rest of the listed sectors (up from 6%)	7%	14%
153(1)(b)	IT and IT-enabled services	4%	8%
153(1)(b)	Independent professionals: doctors, lawyers, architects, accountants, software engineers and developers	15%	30%
153(1)(b)	Terminal and port operating services (down from 15%)	12%	24%
153(1)(b)	All other services (down from 15%)	14%	28%
153(1)(c)	Execution of a contract, company or other	7.5% / 8%	15% / 16%
153(2A)	E-commerce, digital payment or cash on delivery	1% / 2%	2% / 4%
154B	Social media revenue: YouTube, Facebook, Instagram, TikTok (new)	5%	10%
233	Brokerage and commission, general	12%	24%
155	Rent of immovable property, company	15%	30%

Rates under s.153 for distributors, dealers, wholesalers and retailers of specified goods carry their own regime. See our guide to sections 236G and 236H.

Motor vehicles: where the penalty is triple, not double

Section 231B is the exception that catches most people out. The Tenth Schedule increase for vehicles is 200% rather than 100%, so a non-filer pays three times the filer rate.

Engine capacity	On ATL	Not on ATL	Extra on a Rs 8,000,000 vehicle
Up to 850cc	0.5%	1.5%	n/a
851cc to 1,000cc	1%	3%	n/a
1,001cc to 1,300cc	1.5%	4.5%	n/a
1,301cc to 1,600cc	2%	6%	Rs 320,000
1,601cc to 1,800cc	3%	9%	Rs 480,000
1,801cc to 2,000cc	5%	15%	Rs 800,000
2,001cc to 2,500cc	7%	21%	Rs 1,120,000
2,501cc to 3,000cc	9%	27%	Rs 1,440,000
Above 3,000cc	12%	36%	Rs 1,920,000

Where engine capacity is not applicable and the value of the vehicle is Rs 5 million or more, the collectible rate is 3% of value for a person on the ATL. There is a further trap worth knowing. Where a vehicle is leased to a person not on the ATL, advance tax of 4% of the value is collected by the leasing company, bank, NBFC, modaraba or DFI. A filer pays nothing at all under that head.

5. Where filing status makes no difference at all

Rule 10 of the Tenth Schedule excludes several provisions from the 100% increase. Knowing which ones saves a good deal of wasted argument at the withholding counter.

Section	Provision	Rate for everyone
149	Salary	Ordinary slab rates. A salaried person who has never filed pays the same monthly deduction as one who files punctually.
152	Certain payments to non-residents	As prescribed, without the non-ATL uplift
154	Export proceeds	1.25%, as minimum tax
154A	Export of IT and ITeS, PSEB-registered	0.25%, extended to Tax Year 2029
235	Electricity consumption	As prescribed by consumption slab
236	Mobile, internet and telephone bills	15% of the bill or prepaid sale price
236Y	Remittance abroad by card (cut from 5%)	0.5%

The salary point deserves emphasis, because it is the most common misconception in the country. A salaried executive is not penalised on payroll for being off the ATL. He is penalised everywhere else: on his savings, his car, his property, his mutual funds, and every rupee he withdraws in cash above Rs 50,000. The one deduction he actually sees on his payslip is the only one that does not change, while every deduction he never notices is quietly running at double.

6. Three changes that made non-filing more expensive this year

(a) Non-filers lost their shelter on securities

The Finance Act 2024 inserted sub-rule (y) in Rule 10, excluding tax under section 37A on the disposal of securities from the Tenth Schedule increase. The reasoning at the time was that non-filers already faced progressive slab rates with a 15% floor. The Finance Act 2026 has omitted sub-rule (y). Capital gains tax under section 37A on listed securities is now increased by 100% for persons not on the ATL, on top of the slab treatment that already applied to them. For anyone trading on the Pakistan Stock Exchange without filing, this is a significant deterioration, and it has gone almost unannounced.

(b) A new withholding head, with a new non-filer penalty

Section 151B is new, operating alongside the charge under section 7G. Every life insurance company, family takaful operator and window takaful operator must now deduct tax on payouts, surrender values and maturity proceeds. The rate is 15% within one year of issuance and 10% after one year but before four years are complete. Payments on death or disability remain outside the charge. A new sub-rule (aa) in Rule 10 increases this deduction by 100% for resident policyholders not on the ATL, though the increase does not apply to a non-resident recipient even if he is off the list. The tax deducted is treated as final tax on income arising from the payout.

(c) The cost of coming back rose twenty-five-fold

Under section 182A, a person who files late is admitted to the ATL only on payment of a surcharge. The Finance Act 2026 increased it sharply:

Taxpayer	Previously	From 1 July 2026	Increase
Individual	Rs 1,000	Rs 25,000	25 times
Association of Persons	Rs 10,000	Rs 50,000	5 times
Company	Rs 20,000	Rs 100,000	5 times

The FBR updated the IRIS portal to enforce the new surcharge from 1st July 2026, and did so immediately, before Tax Year 2026 return forms were even available on the system. Late filers of Tax Year 2025 accordingly found themselves unable to reappear on the ATL without first paying the higher figure. Note the timing distinction this creates. It is entirely possible for a return to be taxed under Finance Act 2025 rates while the late-filing surcharge on that same return is charged at the Finance Act 2026 rate, because the surcharge attaches to the act of late filing rather than to the computation of any particular year’s income.

7. Property: the gap in proportional terms

The headline of the Finance Act 2026 was relief for real estate, and the relief was real. Section 7E, the tax on deemed income from immovable property, has been omitted entirely. The Federal Constitutional Court of Pakistan, by short order dated 7th May 2026 in C.P.L.A. 1442-K/2022, a bench of Chief Justice Aminuddin Khan and Justice Ali Baqar Najafi, held section 7E ultra vires the Constitution and struck it down as void ab initio, setting aside all proceedings and notices issued under it. Detailed reasons followed separately, in which the Court observed that a levy on property incapable of generating income is confiscatory in practical effect. The Finance Act 2026 then deleted the provision. The Capital Value Tax on foreign assets of resident individuals has also gone.

Alongside this, the value-tiered advance tax slabs for persons on the ATL have collapsed into single flat rates:

Provision	TY 2026 (ATL)	TY 2027 (ATL)	TY 2027 (non-ATL)
s.236K, purchase	1.5% / 2% / 2.5%	1.25% flat	10.5% / 14.5% / 18.5% (up to 50m / 50 to 100m / above 100m)
s.236C, sale or transfer	4.5% / 5% / 5.5%	2.75% flat	Tiered by consideration
Late Filer tier on both	Applied	Abolished

The structural point most commentary misses. Sections 236C, 236G, 236H and 236K do not take the general Rule 1 doubling. They carry their own fixed non-ATL rates in the First Schedule. That is why the gap on property is not 2 times but closer to 8 times at the top of the scale: the ATL rate was cut to a flat figure while the non-ATL rate stayed a tiered slab. On a Rs 100,000,000 purchase, a buyer on the ATL pays Rs 1,250,000, while a buyer off it faces a materially higher tiered charge on the very same transaction.

8. Beyond withholding: what being off the list now prevents

Treating this as purely a question of rates understates it. Since the Finance Act 2025, filing status has been entangled with a person’s capacity to transact at all.

Section 114C introduced the concept of an eligible person and, correspondingly, an ineligible person. An eligible person has filed a return for the tax year immediately preceding the transaction and has sufficient resources declared in the wealth statement or financial statements to support it, a test that extends to immediate family members. An ineligible person faces statutory bars, subject to the thresholds in the Fifteenth Schedule, on:

• booking, purchasing or registering a motor vehicle above the notified value;
• applying to any authority to register, record or attest the transfer of immovable property above the notified value;
• opening or maintaining certain bank and investor portfolio securities accounts;
• selling or opening accounts for the sale of securities and mutual funds.

The critical point for planning is that being on the ATL is necessary but no longer sufficient. A filer whose wealth statement does not show resources adequate to the transaction can still be an ineligible person. Filing gets you through the first gate; the wealth statement decides the second.

Layered on top, the Finance Act 2026 built the machinery to find the gap. Banks and Electronic Money Institutions must now report account holders whose aggregate deposits or withdrawals exceed Rs 100 million in a reporting period, covering deposits, withdrawals, balances, peak credits and total credits, into a Central Data Hub for algorithmic cross-matching. A gross mismatch is routed into the Compliance Risk Management System and taken up through the National Faceless Centre.

9. The other side of the counter: your liability as a withholding agent

Every article written on this subject in Pakistan is written from the recipient’s side of the table, which is the smaller half of the problem. If you run a company, an AOP, a factory, a school, a hospital or a trading concern, you are far more often the payer than the non-filer, and the Ordinance places the risk of getting filing status wrong squarely on you.

Section 161: you become the taxpayer

Where a person required to deduct or collect tax fails to do so, or having deducted fails to deposit it, section 161 makes that person personally liable to pay the amount, recoverable from them as though it were tax due from them. The supplier keeps his money. You pay the shortfall out of your own pocket and then try to recover it commercially, assuming you still can.

The filing-status dimension is where this bites. Suppose you pay a contractor Rs 10,000,000 and deduct at the ATL rate of 8%, which is Rs 800,000. If the contractor was not on the ATL on the date of payment, the correct deduction was 16%, or Rs 1,600,000. That Rs 800,000 difference is now recoverable from you, not from the contractor.

Section 205: and then default surcharge runs on top

Section 205 adds default surcharge on the amount not deducted or not deposited, computed for the period of default. Because withholding defaults are typically discovered on audit, months or years after the event, the surcharge component is frequently a substantial fraction of the principal by the time the order issues. A section 161 order and a section 205 computation almost always arrive together, and in practice the show cause under section 161(1A) is the first the taxpayer hears of any of it.

Section 165: the statement that creates the trail

Withholding agents must file periodic statements under section 165, disclosing payments made, persons paid and tax deducted. These statements are the dataset the FBR reconciles against the ATL and against the recipient’s own return. A mismatch between what you declared deducting and what the ATL says about the recipient’s status on that date is exactly the pattern that generates an automated notice.

If you have received a notice under section 161(1A) or a default surcharge computation under section 205, the position may well not be as stated in the notice, but the window to say so is short. This is work we do regularly.

10. The forgotten half: sales tax and the provincial lists

Every comparison chart in circulation treats this as an income tax question. It is not, and the omission costs businesses real money.

Federal: the Eleventh Schedule

Under the Eleventh Schedule to the Sales Tax Act, 1990, companies, AOPs and individuals acting as withholding agents must deduct sales tax at 5% of the gross value of supplies where the supplier is a person other than an Active Taxpayer. The Finance Act 2026 added a further entry: registered persons engaged in toll manufacturing must withhold four times the tax charged on conversion charges where the counterparty is unregistered.

Two lists, not one

The reduced minimum tax rate for distributors, dealers, sub-dealers, wholesalers and retailers of specified goods, now 0.5% under clause (24D), is available only to persons appearing on the active taxpayers’ lists issued under both the Sales Tax Act, 1990 and the Income Tax Ordinance, 2001. The reduced rate on fertiliser under section 236G works on the same both-lists condition. Being on one list will not do.

And then the provinces

Sales tax on services is a provincial subject. The Punjab Revenue Authority, the Sindh Revenue Board, the Khyber Pakhtunkhwa Revenue Authority and the Balochistan Revenue Authority each maintain their own registration and active-taxpayer regimes, with their own withholding rules under their respective Acts. A Lahore business supplying taxable services may therefore be carrying three separate statuses at once: federal income tax ATL, federal sales tax ATL, and PRA registration. Each carries independent consequences, independent filing obligations and independent penalties.

It is entirely possible to be an active filer for income tax and simultaneously in default before the PRA. Businesses tend to discover this when a Section 57(2) show cause notice arrives from the Authority and the response that would have worked at the FBR turns out not to apply. If your business supplies services in Punjab, the federal ATL is only one of the lists you need to be on.

11. What one year off the list actually costs

Illustrative computation. Actual liability depends on the taxpayer’s circumstances.

Take an ordinary Lahore businessman. He receives a contract payment of Rs 10,000,000, invoices Rs 5,000,000 in specified services, registers an 1,800cc vehicle worth Rs 8,000,000, receives Rs 2,000,000 in dividends and Rs 1,000,000 in bank profit, and withdraws Rs 5,000,000 in cash across the year. Nothing exotic about any of it.

Transaction	On ATL	Off ATL	Difference
Contract, Rs 10,000,000 (s.153(1)(c))	800,000	1,600,000	800,000
Vehicle 1,800cc, Rs 8,000,000 (s.231B)	240,000	720,000	480,000
Services, Rs 5,000,000 (s.153(1)(b))	350,000	700,000	350,000
Dividend, Rs 2,000,000 (s.150)	300,000	600,000	300,000
Bank profit, Rs 1,000,000 (s.151)	200,000	400,000	200,000
Cash withdrawals, Rs 5,000,000 (s.231AB)	Nil	40,000	40,000
Total	1,890,000	4,060,000	2,170,000

Rs 2,170,000 in a single year, set against a filing cost measured in thousands.

12. If this is you

13. How to check your status and get on the list

1. Verify before you transact, not after. Check on the FBR portal, or send your CNIC without dashes to 9966 by SMS. For a company or AOP, send the NTN.
2. File the return for the relevant tax year on IRIS. See our step-by-step IRIS filing guide.
3. If you filed late, generate a PSID under the “Misc” head and pay the section 182A surcharge, or consider the six-month property undertaking described in section 6. Your name is added only once the condition is satisfied.
4. Confirm the wealth statement supports the transaction before committing to a purchase caught by section 114C.
5. Check the sales tax ATL separately, and your provincial registration if you supply services. Reduced rates increasingly require presence on more than one list.
6. If you are a withholding agent, build the ATL check into your payment process and retain the evidence.

14. Frequently asked questions

What is the difference between a filer and a non-filer in Pakistan?
A filer is a person whose name appears on the FBR’s Active Taxpayers List for the relevant tax year, having filed an income tax return. A non-filer is anyone who does not appear on that list. Under Rule 1 of the Tenth Schedule, a non-filer’s withholding tax rate is generally increased by 100%, which doubles it, with motor vehicles tripled and certain property sections carrying their own higher fixed rates.

Does the Late Filer category still exist in Tax Year 2027?
No. Rule 1A of the Tenth Schedule was omitted by the Finance Act 2026 with effect from 1st July 2026. A person restored to the ATL after satisfying section 182A now attracts the same rates as a person who filed on time.

I am salaried and have never filed. Am I losing money?
Not on your payroll deduction, which is unaffected because section 149 is excluded from the Tenth Schedule increase. You are losing money on bank profit, dividends, vehicle registration, property transactions, cash withdrawals above Rs 50,000 per day and securities trading, and you cannot claim any of it back, because a refund is claimed through a return.

Is non-filer withholding always exactly double?
No. The general rule under Rule 1 of the Tenth Schedule is a 100% increase, but motor vehicles under section 231B are increased by 200%. Sections 236C, 236G, 236H and 236K carry their own fixed non-filer rates, and provisions including salary, exports and telephone bills do not increase at all.

Can a non-filer recover the extra tax deducted?
Only by filing, and only where the deduction is adjustable rather than minimum or final tax. Adjustable withholding is credited against the final liability and refunded if it exceeds it, but that is a mechanism of the return. Without a return there is no vehicle for the claim. Where the deduction is minimum or final tax, it is not recoverable by anyone.

Is my NTN enough to make me a filer?
No. Registration and ATL presence are different things. Your name must appear on the Active Taxpayers List for the relevant tax year on the date the transaction is executed.

What happens if I deduct tax at filer rates from someone who is not on the ATL?
You become liable. Section 161 makes the withholding agent personally liable for tax not deducted or not deposited, recoverable as if it were tax due from them, and section 205 adds default surcharge for the period of default. Verify and record ATL status at the date of each payment.

Has section 7E been abolished?
Yes. The Federal Constitutional Court, by order dated 7th May 2026 in C.P.L.A. 1442-K/2022, held section 7E ultra vires the Constitution and void ab initio, and the Finance Act 2026 deleted the provision. The statute does not set out a mechanism for automatic refund of tax already deposited under it, so take advice if you are affected.

A closing observation

Pakistan’s filer regime is usually described as a reward for good behaviour. In practice it works as a documentation levy, imposed transaction by transaction on anyone the revenue cannot see. The Finance Act 2026 sharpened both edges at once. It reduced the burden on those inside the net by deleting section 7E, cutting property rates to flat figures, removing the late-filer penalty and withdrawing the salaried surcharge. At the same time it raised the cost of staying outside, through a twenty-five-fold surcharge, the loss of the securities shelter, and banking data that now flows automatically into a cross-matching hub.

The arithmetic is no longer close. For any business or individual transacting at scale in Pakistan, filing has stopped being a compliance chore and become the cheapest financial decision on the table. And for the business that pays others, the ATL check is the cheapest insurance available.

Related reading: 236C and 236K property tax rates · Withholding tax chart, Tax Year 2027 · Sections 236G and 236H · IRIS return filing guide · Income tax calculator