FBR announced categories of mandatory Tax Return for 2023


The Federal Board of Revenue (FBR) has made an important step forward by identifying the categories of individuals who must file annual income tax returns for the tax year 2023.

FBR tax year 2023

The FBR referred to Section 114 of the Income Tax Ordinance, 2001, which outlines the requirements for filing a mandatory income tax return this year.

According to the guidelines set in Section 114:

Companies: Every business, regardless of size or type, must file an annual income tax return.

Individuals with Taxable Income: Individuals (excluding corporations) whose taxable income above the maximum threshold not subject to taxes as defined by the Ordinance for the year must file an income tax return.

Individuals who do not fall into one of the above groups must file if they match any of the following criteria:

  1. Have been taxed in either of the previous two fiscal years.
  2. Claim a carried forward loss in accordance with the Ordinance.
  3. Have 500 square yards or more of immovable property, or own flats in particular localities.
  4. Own immovable property in a rating area that is 500 square yards or larger.
  5. In a rated area, own flats with a covered area of 2000 square feet or more.
  6. Own automobiles with engine capacities greater than 1000CC.
  7. Have a National Tax Number (NTN).
  8. Have a business or industrial power connection with an annual bill that exceeds Rs. 500,000.
  9. Are registered residents with numerous professional groups or associations.
  10. Resident individuals obligated to file foreign income and asset disclosures under Section 116A.
  11. Individuals or groups of individuals chosen by the Board with the Minister’s consent are also included in the mandatory return filing category.

Furthermore, every individual whose ‘Income from Business’ varies between Rs. 300,000 and Rs. 400,000 in a tax year is required to file an income tax return. The FBR’s action aims to increase openness and compliance with tax legislation across the economy.

This phase highlights the significance of accurately reporting income and contributing to the government’s revenue collection operations.

To  read our blog on “FBR eases tax relief for overseas Pakistanis on property,” click here

Muhammad Kamal
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