The Federal Board of Revenue (FBR) has published a draft of further amendments to the Income Tax Rules, 2002, signaling a comprehensive overhaul of the salary tax return forms. Issued under S.R.O. 1213 (I)/2025, these proposed changes aim to streamline the filing process while demanding greater detail and transparency from taxpayers. The FBR has opened a seven-day window for public objections and suggestions before the amendments are finalized.
These proposed revisions are set to impact all individuals filing income tax returns, particularly those with diverse income sources and significant assets.
Key Changes to the Salary Tax Return Forms:
The draft amendments introduce several crucial modifications to how individuals will file their income tax returns:
- Streamlined Income Source Selection:
Taxpayers will now be required to specifically select their primary source of income, such as salary, pension, or rent, and bank profits. For individuals with any other form of income, the system will direct them to select a normal tax return form, indicating a more categorized approach to income declaration.
- Income from Property Deductions:
Income derived from property will explicitly be subject to deductions related to its maintenance, allowing taxpayers to account for associated costs more clearly.
- Mandatory Bank Profit and Withholding Tax Details:
Tax filers must now accurately enter all profits earned from bank accounts along with the corresponding tax deducted thereon. Furthermore, comprehensive details of all other withholding taxes must be entered one by one, ensuring granular reporting.
- Deductible Allowances/Tax Credits:
The forms will provide clear sections for entering all eligible deductible allowances and tax credits, facilitating accurate calculation of net taxable income.
Enhanced Wealth Statement Requirements:
The wealth statement portion of the tax return has also undergone significant enhancements, demanding greater transparency:
- Mandatory IBAN: The International Bank Account Number (IBAN) for all bank accounts will now be a mandatory field, serving as a crucial link for financial verification.
- Comprehensive Property Declaration: Taxpayers must meticulously declare all properties registered in their name.
- Personal Assets and Liabilities: Clear sections will be available for detailing personal assets and liabilities, providing a holistic view of the taxpayer’s financial standing.
- Capital Assets for 7E Tax Exclusion: Specific details must be entered under capital assets for those claiming exclusion from the notorious Section 7E tax.
- Other Credit Incomes: Incomes from other credits, such as remittances, gifts received, or inheritances, must be explicitly entered.
- Debit Transactions: Details of debit transactions, including personal expenses and gifts given out, will also need to be recorded.
- Summary and Draft Download: A final page will provide a summary of all debit and credit transactions, along with an option to download a draft return in PDF format for review.
Updated Security Protocol:
To enhance security, the verification code required for filing has been updated from a 4-digit to a 6-digit format. Taxpayers retain the ability to reset this code for their profiles as needed.
Public Has Seven Days for Feedback:
Published under S.R.O. 1212 (I)/2025, the FBR has invited all persons likely to be affected by these amendments to submit their objections or suggestions within seven days of the draft’s publication in the official Gazette. The FBR has committed to taking all received feedback into consideration before finalizing these crucial changes. Taxpayers and professionals are urged to review the draft thoroughly and provide their input to help shape the final tax filing procedures.
