FBR offers late filers PKR 25,000 waiver with property restriction

The Federal Board of Revenue (FBR) has allowed individuals who file their income tax returns after the deadline to join the Active Taxpayer List (ATL) without paying the prescribed PKR 25,000 surcharge, provided they undertake not to purchase or acquire property for six months.

The FBR introduced the facility through SRO 2097(I)/2026, issued November 10, amending the Income Tax Rules, 2002, and introducing a new undertaking, Form ATL-U, for eligible late filers.

How can late filers avoid the ATL surcharge?

Under the amended rules, individuals who file their income tax returns for the latest tax year after the original or extended deadline can secure inclusion in the ATL without paying the surcharge. They must submit Form ATL-U electronically through FBR's Inland Revenue Information System (IRIS), undertaking not to acquire property for six months.

The facility has been introduced under Section 182A(3) of the Income Tax Ordinance, 2001, through amendments to Rule 81B of the Income Tax Rules, 2002.

Form ATL-U has been added to Part XV of the First Schedule of the rules.

What are the conditions of the undertaking?

Individuals applying for the exemption must undertake not to purchase, acquire or otherwise obtain ownership or beneficial interest in any property during the six-month period.

The restriction will begin on the date shown on the electronic acknowledgment issued by IRIS following successful submission of Form ATL-U.

The FBR may verify compliance using information available in its records or obtained from government agencies, property registries, financial institutions and other lawful sources.

The exemption applies specifically to the surcharge required for inclusion in the ATL and does not remove the obligation to file an income tax return.

What happens if a taxpayer violates the undertaking?

If information indicates that an individual has acquired property during the restricted period, the FBR will provide the taxpayer an electronic opportunity to explain their position.

If a violation is established, the surcharge exemption will be withdrawn from the date of the breach.

The individual's ATL status will subsequently be governed by the existing rules under Rule 81B(2A), including the requirement to pay the applicable surcharge.

The amendments follow a draft notification issued on October 6, 2026, through SRO 1691(I)/2026, which was published for public feedback before the final rules were notified.

The new arrangement provides relief to individuals filing late tax returns while making the surcharge exemption conditional on a six-month restriction on acquiring property.