Under SRO 2098(I)/2026, the automated system will flag factual and legal discrepancies, allowing taxpayers at least seven days to respond before further action.
ISLAMABAD: The Federal Board of Revenue (FBR) has introduced electronic scrutiny of income tax returns, providing taxpayers an opportunity to identify and correct errors, explain discrepancies and take corrective action before any legal or penal proceedings are initiated.
The FBR issued SRO 2098(I)/2026, introducing Rule 38B into the Income Tax Rules, 2002, under the powers granted by Section 120(2A), read with Section 237 of the Income Tax Ordinance, 2001.
Under the new procedure, an automated system, including Customer Relationship Management (CRM), will process income tax returns and identify potential factual and legal mistakes or discrepancies.
The system will communicate identified issues to taxpayers through online advice or advance intimation via the FBR’s IRIS portal. The relevant Inland Revenue officer may also issue the same system-generated intimation.
At least seven days to respond
According to Rule 38B, taxpayers will receive a specified response period of at least seven days to clarify issues, rectify errors or take other corrective measures.
If a taxpayer fails to respond within the stipulated period, the system will send a reminder, providing an additional period of at least seven days.
The FBR has also prescribed electronic record-keeping requirements. Details of detected discrepancies, notices issued, taxpayer responses and subsequent actions will be communicated to the relevant Inland Revenue officer.
All intimations, responses and actions will be recorded on a dedicated system dashboard.
The procedure will also support automated scrutiny, data analysis and cross-matching with other available information through a Change Request Form (CRF) for effective implementation.
The jurisdictional Inland Revenue officer will examine taxpayers’ responses, or the absence of responses, and decide whether further action is necessary under the Income Tax Ordinance, 2001 and relevant rules.
The new mechanism aims to provide taxpayers an opportunity to address discrepancies before the FBR considers further legal or penal action.