Many taxpayers in Pakistan pay excess income tax but never claim their refunds—mostly due to lack of awareness about the procedure. Under Section 170 of the Income Tax Ordinance, 2001 (updated for Tax Year 2026), taxpayers are legally entitled to a refund of excess tax paid.
This guide explains who can claim a refund, how to apply, the prescribed format, documents required, and practical tips to speed up the process.
📌 What Is an Income Tax Refund?
An income tax refund arises when the tax paid exceeds the actual tax liability, usually due to:
• Excess withholding tax
• Advance tax payments
• Adjustable taxes deducted by banks, employers, or utilities
Refunds are processed by the Federal Board of Revenue (FBR) through the Commissioner Inland Revenue.
⚖️ Legal Framework (Tax Year 2026)
📘 Relevant laws:
• Section 170 – Income Tax Ordinance, 2001
• Income Tax Rules, 2002 (amended up to November 24, 2023)
These laws prescribe both electronic and manual procedures for claiming refunds.
✅ Who Can Apply for an Income Tax Refund?
You may apply if:
✔ You are an individual, AOP, or company
✔ You have filed your income tax return
✔ Tax paid is more than tax chargeable
✔ Proof of tax payment is available
🔍 Residency status (resident or non-resident) must be declared.
🧭 Step-by-Step: How to Apply for Income Tax Refund
Step 1: File Your Income Tax Return
Refunds are only processed after filing a return for the relevant tax year through IRIS.
👉 No return = No refund.
Step 2: Calculate Refund Amount
Ensure the following figures are accurate:
• Total income
• Tax chargeable
• Tax already paid
• Refund amount claimed
Step 3: Submit Refund Application (Prescribed Format)
If required by the Commissioner, submit a manual refund application under Income Tax Rules, 2002 using the following prescribed format:
📄 Prescribed Application Format – Income Tax Refund (Section 170)
The Commissioner,
______________ Zone,
______________ (City).
Dear Sir,
I, __________________________ of __________________________ hereby declare:
(a) That my total income computed in accordance with the provisions of the Income Tax Ordinance, 2001 (XLIV of 2001) during the year ending _____________, being the income year for the assessment year ending on ______________, amounted to Rs. __________________.
(b) That the total tax chargeable in respect of such total income is Rs. __________________.
(c) That the total amount of tax paid is Rs. __________________.
(d) That I have already filed evidence of payment of tax along with my return of income for the year, or I enclose herewith evidence of tax already paid during the tax year for taking credit.
I therefore request that a refund of Rs. __________________ may kindly be allowed to me.
Yours faithfully,
Signature: __________________________
NTN: ______________________________
Address: ___________________________
I hereby declare that I am resident / non-resident and that the information given above is true and correct.
Date: ____________________
Signature: ______________________
Step 4: Attach Supporting Documents
📎 Required Documents Checklist
✔ Copy of filed income tax return
✔ Withholding tax certificates
✔ Salary certificate (if applicable)
✔ Bank challans / CPRs
✔ NTN copy
Step 5: Refund Processing by FBR
The Commissioner may:
• Allow the refund
• Adjust it against outstanding tax liabilities, or
• Seek clarification/documents
Approved refunds are issued via bank transfer or cheque.
⏳ How Long Does FBR Take to Issue Refund?
⏱ Average timeline: 30–90 days, depending on:
• Verification
• Risk profiling
• Audit or adjustment proceedings
💡 Electronically processed refunds are generally faster.
❓ Frequently Asked Questions (FAQs)
🔹 Is refund automatic after filing return?
Not always. Some refunds require manual verification or application.
🔹 Can FBR adjust my refund?
Yes. Under Section 170, FBR can adjust refunds against outstanding demands.
🔹 Can a non-resident claim refund?
✔ Yes, provided tax was overpaid and return is filed.
🔹 Is refund taxable?
❌ No. Refund of principal tax is not taxable.
⚠️ Disclaimer: This article is intended for general information purposes only and does not constitute legal, tax, or professional advice. Tax laws, procedures, and FBR practices may change or vary based on individual circumstances. Readers are advised to consult the Federal Board of Revenue (FBR), relevant provisions of the Income Tax Ordinance, 2001, or a qualified tax professional before acting on the information provided. The publisher accepts no liability for any loss or damage arising from reliance on this content.