Filing your income tax return in Pakistan isn’t just a legal duty — it helps you stay safe from fines, legal trouble, and even problems with banks. If you forget or choose not to file, here’s what could happen.
1. You Can Be Fined Every Day
According to Section 182(1) of the Income Tax Ordinance:
- You may be fined Rs. 1,000 per day for not filing
- This fine can go up to Rs. 50,000 maximum
Even if you don’t owe much tax, the penalty adds up quickly if you’re late.
2. You’ll Be Removed from the Active Taxpayer List (ATL)
The Active Taxpayer List (ATL) is a list of people who have filed their tax returns on time. If you’re not on this list:
- You may pay higher taxes on banking transactions
- You may face trouble getting loans or credit cards
- Your credibility with banks and other institutions may go down
3. You May Face a Provisional Assessment
Under Section 122C, the FBR (Federal Board of Revenue) can estimate your income and tax if you don’t file. This means:
- The FBR will decide how much tax you should pay
- You don’t get to explain your side until later
- This could lead to a bigger tax bill than expected
4. You May Be Chosen for an Audit
If you don’t file your return, the FBR may select you for an audit or investigation. This can lead to:
- A detailed check of your bank accounts and assets
- Extra penalties if they find unreported income
- Legal action in serious cases
5. Courts have allowed Strict Action
In a case (W.P. No. 2337/2022), the Islamabad High Court ruled that if someone repeatedly ignores filing duties:
- The FBR is allowed to start ex-parte proceedings (without your side)
- Heavy penalties can be applied
6. You Lose Tax Benefits
If you miss the return deadline:
- You lose tax credits for that year
- You may not be eligible for refunds
- You can’t carry forward certain losses
What If You Missed the Deadline?
If you missed the deadline but haven’t received an FBR notice yet, you can still file your return voluntarily.
- Penalties may still apply, but they’ll likely be less harsh
- It’s better to file late than not at all
How to Avoid Trouble
- Keep your records organized (salary slips, bank statements, business receipts)
- File your return before the annual deadline
- If unsure, get help from a professional tax consultant or lawyer
Bottom Line
Not filing your tax return in Pakistan can cost you more than just money — it can affect your financial freedom and legal status. Always file on time to stay safe, save money, and keep your name on the Active Taxpayer List. for more details, contact the best Tax lawyers in the town.
