FBR Warns Taxpayers to File Returns Before September 30 or Face Rs25,000 Penalty

ISLAMABAD: The Federal Board of Revenue (FBR) has again urged taxpayers to file income tax returns for FY 2026 by September 30, 2026, and warned the failure to which could lead to surcharge of Rs25,000 and loss of Active Taxpayer List (ATL) status.

The Tax Year 2026 return will apply to income between July 1, 2025 and June 30, 2026. Withholding tax rates for active filers will remain the current withholding tax rates up until the time of filing, provided that the filing is done within the due date and the taxpayer is on the ATL.
The surcharge on late filing has been drastically raised according to the revised tax rules. The penalty has been hiked up from Rs1,000 to Rs25,000 and timely submission of the applications is even more important.

The FBR is expected to update the Active Taxpayer List using Tax Year 2026 returns from July 1, 2026, following the same practice adopted in the previous year.

Officials said taxpayers who fail to file on time may still avoid the surcharge by submitting their tax return along with a written undertaking to the Inland Revenue Commissioner. Under the declaration, they must agree not to purchase or acquire any property or beneficial ownership for six months from the date of the undertaking.

Tax experts say losing ATL status can increase the amount of withholding tax deducted on banking transactions, vehicle registration, property purchases and several other financial activities.

Although the Finance Division has extended tax return deadlines in previous years, no official extension has been announced so far. Taxpayers are therefore advised to complete the filing process before the September 30 deadline to avoid penalties and maintain their ATL status.

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