FBR Announces New Rules for Late Tax Filers

ISLAMABAD: In a significant move aimed at encouraging compliance among taxpayers, the Federal Board of Revenue (FBR) has made a major announcement regarding late income tax return filers. This decision comes in light of the newly issued S.R.O.1635(I)/2024, which amends the Income Tax Rules, thereby altering the landscape for those who may have missed the original or extended deadlines for filing their returns.

The FBR has clarified that individuals who file their income tax returns for the most recent tax year by the due date set by the Commissioner or the Board will be included in the Active Taxpayer’s List (ATL). This list is crucial as it identifies those who are compliant with tax regulations and can enjoy certain benefits. The term “latest tax year” refers to the most recently completed tax year prior to the filing date. Interestingly, it may also encompass the previous year if the deadline for that year has not yet lapsed.

For those who find themselves in the unfortunate position of submitting their returns after the designated due date, the FBR has stipulated that their inclusion in the ATL will depend on the payment of a specified surcharge. This surcharge is detailed in section 182A of the Income Tax Ordinance, emphasizing the importance of timely compliance.

Moreover, the FBR has extended this opportunity to companies or associations that were formed after June 30 of the relevant tax year. These entities can also be included in the ATL, provided their returns are not yet due. This inclusion is a step towards fostering a more inclusive tax environment, encouraging new businesses to comply with tax regulations from the outset.

Additionally, it is noteworthy that individuals who file their returns with the Azad Jammu and Kashmir Central Board of Revenue or the Gilgit Baltistan Council Board of Revenue will also be recognized in the ATL. This move reflects the FBR's commitment to a unified approach in tax compliance across different regions.

The FBR's announcement serves as a reminder of the importance of timely tax filing and compliance. By allowing late filers to join the ATL upon payment of a surcharge, the FBR is not only promoting accountability but also providing a second chance for taxpayers to align themselves with the regulations. This initiative could potentially lead to increased revenue for the government while also encouraging a culture of compliance among taxpayers. It is essential for individuals and businesses alike to stay informed and proactive in their tax obligations to avoid penalties and enjoy the benefits of being an active taxpayer.