Section 115 provides limited exemption for widows, orphans, disabled persons and certain non-residents where the filing obligation arises solely from ownership of specified assets.
ISLAMABAD: The Federal Board of Revenue (FBR) has clarified that certain categories of individuals are exempt from filing an income tax return for Tax Year (TY) 2026 under Section 115 of the Income Tax Ordinance, 2001, provided their filing obligation arises solely from the ownership of specified assets.
The exemption applies to limited categories of taxpayers and does not remove other legal obligations to file a return where applicable.
Individuals Covered by the Exemption
According to the FBR, the following persons are not required to file an income tax return solely because they fall within the asset-based filing requirements under Section 114(1)(b) of the Income Tax Ordinance:
• Widows.
• Orphans below the age of 25 years.
• Disabled persons.
• Non-resident persons, in respect of ownership of immovable property.
The relief is available only where the requirement to file a return is triggered exclusively by the ownership of specified assets.
Asset-Based Filing Requirement
Section 114 requires certain individuals to file an income tax return on the basis of owning particular assets, including:
• Immovable property with a land area of 500 square yards or more.
• A flat with a covered area of 2,000 square feet or more located in a rating area.
• A motor vehicle with an engine capacity exceeding 1,000cc.
Under Section 115, the above-mentioned exempt categories are not required to file a return solely because they own such assets.
Exemption Has Limited Application
The FBR emphasised that the exemption does not apply where a person is otherwise required to file an income tax return under the Income Tax Ordinance, 2001.
For example, exempt individuals must still submit a return if they:
• Have taxable income exceeding the prescribed threshold.
• Derive business income requiring return filing.
• Fall under any other category specified in Section 114.
• Are notified by the FBR as persons required to furnish a return.
In such cases, the exemption under Section 115 does not apply.
Income Tax Return Deadlines
The FBR has prescribed the following deadlines for filing income tax returns for Tax Year 2026:
• September 30, 2026: Salaried individuals, business individuals, Associations of Persons (AOPs), and companies having a special tax year.
• December 31, 2026: Companies following the normal financial year ending June 30.
The tax authority has advised taxpayers to carefully assess their filing obligations under the relevant provisions of the Income Tax Ordinance, 2001, before the applicable due dates to ensure compliance and avoid penalties.