Filing income tax returns is an essential duty for all taxpayers in Pakistan.
It ensures compliance with the regulation and helps keep away from penalties.
With the advancement of technology, the Federal Board of Revenue (FBR) has simplified the procedure, making it easier to document profits tax returns online.
This post will walk you through the step-by-step method of filing your earnings tax return online, emphasizing the significance and advantages of this approach.
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Why Filing Income Tax Returns is Crucial in Pakistan
Filing your income tax returns is essential for a number of reasons. First and foremost, it helps you avoid penalties and legal issues associated with non-filing.
The FBR has been increasing its efforts to track non-filers, and the consequences can be severe. Additionally, being a tax filer allows you to take advantage of various benefits, such as lower withholding taxes on financial transactions, property purchases, and vehicle registrations.
Beyond the financial implications, filing your income tax returns contributes to the national economy.
It ensures that funds are available for public services and infrastructure development, benefiting everyone in the long run.
Understanding the Income Tax System in Pakistan
Before diving into the actual process of filing, it’s essential to understand the income tax system in Pakistan.
The FBR is the governing body that manages tax collection and enforces tax laws. Knowing the deadlines and staying updated with current tax rates, exemptions, and deductions is crucial for filing accurate returns.
Income tax in Pakistan is levied on both salaried and non-salaried individuals, with specific rules applicable to each category.
For example, salaried individuals have different tax brackets compared to business owners or freelancers.
Why File Income Tax Returns Online?
File Income Tax Returns Online gives several advantages:
- Convenience: You can file your returns from the comfort of your own home at any time.
- Efficiency: The online system reduces the possibility of mistakes and hurries up the system.
- Tracking: You can easily track the status of your return and acquire updates.
Step-by-Step Guide to File Income Tax Return Online
1. Create an Iris Account
To file your income tax return online, the first step is to create an account on the FBR Iris portal.
- Visit the FBR Iris Portal: Go to the FBR Iris website and click on the new registration button.
- Register: Fill on your info, along with your CNIC, email address, and phone number. You will receive a confirmation email with your login credentials.
2. Login to Iris Portal
Once you have created your account, the following step is to log in.
- Access Your Account: Go to the Iris portal and input your login info.
- Navigate the Dashboard: Familiarize yourself with the dashboard wherein you can discover numerous options related to tax filing.
3. Prepare Your Documents
Before you begin filling out the tax return form, gather all necessary documents.
- Income Documents: Salary slips, financial institution statements, and any other income information.
- Expense Receipts: Receipts for deductible fees including medical payments, educational prices, and so on.
- Previous Tax Returns: Copies of previous years’ tax returns for reference.
If you want to read a detailed guide on documents required for income tax returns online you can read it.
4. Fill Out the Income Tax Return Form
This is the most critical part of the process. Ensure you fill out the form accurately.
- Select the Tax Year: Choose the relevant tax year for which you are filing the return.
- Enter Income Details: Input your income from all sources including salary, business income, property income, etc.
- Claim Deductions: Enter details of all allowable deductions to reduce your taxable income.
- Calculate Tax Payable: The system will automatically calculate the tax payable based on the information provided.
5. Submit the Wealth Statement
A wealth statement provides a detailed account of your assets and liabilities.
- Importance of Wealth Statement: It is mandatory for taxpayers whose income exceeds the specified threshold.
- Fill Out the Wealth Statement: Enter details of all assets, liabilities, and expenses.
- Attach Supporting Documents: Upload the necessary documents to support the entries in your wealth statement.
6. Verify and Submit Your Return
Before final submission, verify all the details to avoid any mistakes.
- Review Information: Double-check all entries for accuracy.
- Submit Return: Once verified, submit your return through the Iris portal.
- Acknowledgment: You will receive an acknowledgment receipt confirming the submission of your return.
If you don’t have NTN, you can read this guide on how to apply for NTN online.
Common Mistakes to Avoid
To ensure a smooth filing process, avoid these common mistakes:
- Incomplete Forms: Make sure all required fields are filled.
- Incorrect Information: Double-check all information for accuracy.
- Missing Documents: Ensure all necessary documents are attached.
- Late Submission: File your return before the deadline to avoid penalties.
FAQs on Filing Income Tax Returns Online
What is the deadline for filing income tax returns?
The deadline is typically September 30th each year, but it’s advisable to check the FBR website for any extensions.
Can I file my tax return online if I am self-employed?
Yes, self-employed individuals can file their tax returns online through the Iris portal.
What happens if I miss the deadline for filing my tax return?
Late filing may result in penalties and interest on the unpaid tax amount.
Do I need to submit physical copies of my documents?
No, all documents can be submitted online through the Iris portal.
How can I track the status of my tax return?
You can track the status by logging into your Iris account and checking the return status section.
Conclusion
Filing your income tax return online in Pakistan is a straightforward process if you follow the correct steps.
Ensure you have all the necessary documents ready, fill out the forms accurately, and submit your return on time to avoid any penalties.
By staying compliant, you not only fulfill your legal obligations but also contribute to the country’s economic development.
Struggling with income tax returns or Need any help? Let our experts handle the paperwork, ensuring a smooth and accurate filing process for you. Get in touch Legal Point or call at 03337703712 today for hassle-free tax return services