The deadline for Tax Year 2026 has passed (October 31). You are now in the realm of late returns, and the longer you wait, the more expensive it becomes.
However,
1. Still able to file late returns through the FBR Iris Portal
You can still file your return late through the Iris 2.0 system. The system allows you to file a late return, and the FBR expects you to.
The FBR has given us 2 extensions this year, extending the deadline to October 15 and then October 31. However, we have not seen any general extension; therefore, the deadline is considered passed. You will need to look out for a fresh circular from the FBR.
Who is affected?
- Salaried Individuals, Freelancers & Sole Proprietors
- Associations of Persons (including partnership firms)
- Companies whose tax year ends between July and December.
Companies with a year-end of June 30 will have their Tax Year 2026 return due by December 31, 2026 and therefore have not missed anything yet.
Why should you be worried about being late?
Late returns incur a penalty. For example, a return filed next week will be cheaper than a return filed next month.
You also risk the FBR issuing you a Notice to File (under section 114). If you do not file, they can assess your tax (under section 121) using the information they have.
This is rarely favorable.
How to file your late return:
- Log in to Iris using your CNIC/NTN & Password.
- Open your return of income for Tax Year 2026.
- Input your income, tax credits & tax deducted.
- Complete your Wealth Statement, including your IBAN for all of your bank accounts.
- Pay any tax due using a PSID and save your CPR.
- Sign with your PIN and submit your return. Download your acknowledgment.
Do not just rush through your numbers. This can cause more issues because you will file an incorrect return.
2. Detailed Breakdown of Late Filing Penalties by the FBR
This is located in Section 182 of the Income Tax Ordinance 2001. This is separate from your tax due and the surcharge below.
How much you pay:
For each day you were late, you will be charged the higher of:
- PKR 1,000 per day
- 0.1% of tax payable per day.
Minimum & Maximum:
| Taxpayer | Minimum Late Filing Penalty |
|---|---|
| Individuals with 75% or more of income received from salary: | PKR 10,000 |
| Everyone else (business individuals, AOPs & Companies): | PKR 50,000. |
The maximum amount is 200% of your tax payable.
Example:
Salaried individual who was 20 days late. Tax payable is PKR 80,000. Using the % calculation, this is only PKR 80 per day. So you will be charged at the PKR 1,000 rate. 20 days x PKR 1,000 = PKR 20,000.
The trading firm was 10 days late. Tax Payable is PKR 3,000,000. Using the % calculation, this is PKR 3,000 per day. 10 days x PKR 3,000 = PKR 30,000. This is below the minimum so that you will be charged PKR 50,000.
Easy Tax Scheme Traders:
According to reports from FBR sources, traders who filed late under the Easy Tax Scheme may be charged a PKR 25,000 penalty + PKR 25,000 registration fee.
The FBR has not issued any official notification yet, so make sure to check the current situation.
3. Active Taxpayer List (ATL) Penalty & Surcharge
Even if you pay the penalty in Section 182, you will have to pay again.
What happens:
There is no longer a late filer category. You will no longer be on the Active Taxpayer List and will be considered a non-filer.
According to reports this week, the FBR has already removed taxpayers who missed the October 31 deadline from the 2026 list.
Costs:
Banks and Registrars will check that you are on the list before taking tax. Whilst you are not on the list, you will incur:
- 0.8% cash withdrawal charge once you withdraw over PKR 50,000 in a day.
- Much higher advance tax on property (Sections 236C & 236K).
- Higher tax on vehicles.
- Higher tax on bank profits & Dividends.
A shopkeeper withdrawing PKR 300,000 a week would be losing around PKR 2,400 a week. If you have a large property transaction, you could be paying many times over the surcharge.
Reinstatement Surcharge:
Section 182A outlines the cost to get you back on the list. The Finance Act 2026 has increased this significantly:
| Taxpayer | Old Surcharge | New Surcharge |
|---|---|---|
| Individuals (Salaried, Sole Proprietor, etc.) | PKR 1,000 | PKR 25,000. |
| Associations of Persons | PKR 10,000 | PKR 50,000. |
| Companies | PKR 20,000 | PKR 100,000. |
You can pay using a separate payment slip. You will have your proof of payment via the Computerized Payment Receipt (CPR). Simply filing your return will not get you back on the list.
Costs if you are 1 day late:
- Salaried Individual – Minimum penalty of PKR 10,000 + Surcharge of PKR 25,000 = PKR 35,000 (before any additional withholding tax).
- Business Individual – Minimum penalty of PKR 75,000.
New Form ATL-U:
In October, the FBR issued a draft regulation allowing individual late filers to avoid the surcharge. They would sign an undertaking in Iris using the new Form ATL-U to confirm they will not purchase any property within 6 months.
We have not seen any final notification yet. Until the FBR issues a notification, you will have to pay the surcharge.
What to do to get you back on:
- File your late return & Wealth Statement.
- Pay any tax due.
- Calculate & pay the surcharge (Section 182A).
- Save both your CPRs & Acknowledgement.
- Check your status by texting ATL (space) your CNIC to 9966.
The list may not update right away, so please allow some time.
4. How TaxAccountant. pk Can Help You File Late Tax Safelypk Can Help You File Late Tax Safely
A late tax return will attract more attention. Therefore, it is vital to ensure everything is correct.
The FBR’s National Faceless Center now uses bank, property & vehicle data to determine which individuals will be audited. Rushing through your Wealth Statement and having a round ‘cash in hand’ number is exactly what they are looking for.
What our consultants can do:
- Wealth Statement Reconciliation – Using your bank certificates and property records.
- Late Fee Calculation: Knowing how much you’ll be paying for Section 182 & 182A.
- Return Preparation & Filing – Including claiming any tax deducted.
- Reinstating You – From the Surcharge Payment Slip to confirming your status.
- Responding to Notices: If you have already received a notice from the FBR (Section 114/121).
You can email us your documents, and we can help you on WhatsApp.
Don’t leave it any longer. Start today!
