The Federal Board of Revenue (FBR), has introduced a new simplified electronic return for individuals for the Tax Year 2025. This return is part of amendments to the Income Tax Rules, 2002, and is accessible through the IRIS system. The Tax Year 2025 covers the period from July 1, 2024, to June 30, 2025, and the deadline for filing is September 30, 2025. The changes, effective through Notification S.R.O. 1561(I)/2025, aim to simplify the filing process.
Key Sections of the Simplified Electronic Return
The electronic filing process is structured to guide taxpayers through a series of steps.
1. Getting Started: Basic Information The initial step requires you to declare your residency status by confirming if you were present in Pakistan for 183 days or more during the Tax Year 2025.
2. Income Sources and Details This is where you report all your income. The system pre-fills certain information to make the process easier.
- Salary and Pension: Details of your salary are pre-filled, but you need to provide or verify information such as your employer’s name/NTN, gross salary, transport monetization benefits, and tax deducted from salary. You must also declare any salary arrears, employment termination benefits, or additional salary from another employer. For pension income, you enter the gross amount and indicate if you receive an additional pension from a different employer.
- Other Income Streams: You can declare other income sources, including rent from property (along with any repair and maintenance allowance), and payments for services. The system also pre-fills data for profit on bank accounts and dividends, which you can edit if needed.
3. Withholding Taxes This section summarizes taxes that have been withheld from your income. The system pre-fills this information and categorizes it into three types:
- Adjustable Tax: Includes taxes deducted on salary, cash withdrawals, credit/debit card transactions, and phone/internet bills.
- Minimum Tax: Primarily covers tax deducted on payments for services.
- Final Tax: Pertains to tax deducted on profit on a bank account, dividends, and electricity bills. You have the option to report any other withholding taxes not already listed.
4. Wealth Statement and Reconciliation You are required to declare your assets and liabilities. This includes providing the closing balance of your bank accounts as of June 30, 2025. The system also shows your money coming in and money going out for the tax year. A warning may appear if your change in net assets is greater than your total income, prompting a review of your declared income and assets.
5. Tax Relief, Reductions, & Credits This section determines your eligibility for tax benefits. The form asks specific questions to assess if you qualify for deductible allowances, tax reductions, and credits. These questions include whether you were a full-time researcher or teacher, paid tuition fees for your children, or made Zakat payments during the tax year.
6. Verification and Submission Before finalizing, the system provides an income tax return summary and the option to download a draft PDF. To submit, you must affirm that the information is true and enter a 6-digit verification code sent to your registered mobile number. The submission is confirmed, and any tax refund due is transferred to your bank account. The notification specifies that any changes in the IRIS system are deemed to have always been present, without prejudice to taxpayers who have already filed.
