Late filers face ATL surcharges of up to Rs100,000, along with other tax consequences for missing the September 30 deadline.
ISLAMABAD: The Federal Board of Revenue (FBR) has urged taxpayers to submit their income tax returns and wealth statements for Tax Year 2026 by the prescribed deadline to avoid substantial surcharges for inclusion in the Active Taxpayers List (ATL).
The warning comes as the September 30, 2026 filing deadline approaches for salaried individuals, business individuals, Associations of Persons (AOPs) and corporate entities having a special financial year.
Under the prevailing tax framework, taxpayers who fail to file their annual income tax returns by the due date are excluded from the ATL for the relevant tax year.
The ATL is an important part of Pakistan’s tax system, with taxpayers appearing on the list eligible for reduced withholding tax rates on certain financial transactions.
The consequences of missing the filing deadline have become more costly following amendments introduced through the Finance Act, 2026.
FBR raises ATL surcharge
FBR sources said Section 182A of the Income Tax Ordinance, 2001 provides that a person who fails to file a return under Section 114 by the prescribed due date, or within an extension granted under the law, will not be included in the ATL for that tax year.
However, a taxpayer can subsequently obtain ATL status by filing the outstanding return and paying the prescribed surcharge.
The surcharge varies according to the taxpayer’s category:
• Rs100,000 for a company
• Rs50,000 for an Association of Persons
• Rs25,000 for an individual
Once the return is filed after the deadline and the applicable surcharge is paid, the taxpayer can be included in the ATL, without prejudice to any other liability under the Income Tax Ordinance.
Wider consequences of late filing
The financial impact of missing the deadline extends beyond the ATL surcharge.
A taxpayer who fails to file the return within the prescribed period may also be barred from carrying forward losses under Part VIII of Chapter IV for that tax year.
The law further provides that a refund will not be issued during the period in which the taxpayer remains outside the ATL.
In addition, the taxpayer is not entitled to additional payment for a delayed refund under Section 171 for the period of exclusion from the ATL.
The period during which a taxpayer remains outside the ATL is also excluded when calculating additional payment relating to a delayed refund.
Concession available to certain individuals
The law provides a specific concession for an individual in relation to the ATL surcharge requirement.
The surcharge condition does not apply to an individual who furnishes an undertaking before the Commissioner declaring that they will not purchase, acquire or otherwise obtain ownership or beneficial interest in any property for six months beginning from the date the undertaking is furnished, in the prescribed manner.
September 30 deadline approaches
With the September 30, 2026 deadline fast approaching, the FBR has urged taxpayers to complete their Tax Year 2026 filings within the prescribed period.
Filing on time can help taxpayers avoid the applicable ATL surcharge and the additional consequences associated with remaining outside the Active Taxpayers List.