Draft SRO 1692(I)/2026 sets conditions for businesses seeking tax credits on electronic resources integrated with the FBR’s computerised system.
The Federal Board of Revenue (FBR) has proposed new rules governing the tax credit for integration under Section 64D of the Income Tax Ordinance, 2001, setting out conditions for businesses investing in electronic systems required for real-time monitoring and sales reporting.
The proposals have been issued through draft SRO 1692(I)/2026, which seeks to insert a new Rule 33U into Chapter VIIA of the Income Tax Rules, 2002.
The FBR has invited objections and suggestions on the draft within seven days of its publication in the official Gazette.
Conditions for Claiming Tax Credit
Under the proposed Rule 33U, a person claiming the tax credit must be required under the Income Tax Ordinance, Sales Tax Act or Federal Excise Act to integrate with the FBR’s computerised system for real-time production monitoring or recording and reporting sales or receipts.
The electronic resource for which the credit is claimed must be purchased, acquired, installed or implemented during the relevant tax year and successfully integrated and configured with the FBR’s system during that year.
The equipment, hardware, software or other electronic component must also be directly and exclusively used for the required integration.
The integration must be supported by an activation, commissioning or configuration record generated or confirmed by the FBR’s computerised system. The record must identify the taxpayer, electronic resource and activation date.
What Investment Costs Can Be Included?
The amount actually invested in an electronic resource may include its acquisition or purchase price, along with one-time costs directly linked to installation, configuration, interface development, integration, testing and implementation.
However, the investment amount would be reduced by any discount, rebate, refund, grant or subsidy received or receivable in relation to the electronic resource.
The proposed rules would exclude refundable or recoverable taxes and duties, as well as recurring expenses such as routine maintenance, repairs, annual maintenance, post-commissioning support and service charges.
Internet, telecommunications and utility costs, employee salaries, training, consumables and financing costs would also be excluded.
General-purpose systems not directly and exclusively used for integration would similarly not qualify, except for separately identifiable components dedicated to the integration.
Tax Credit to Be Claimed Through IRIS
The proposed rules state that the tax credit would be claimed in the income tax return for the tax year in which the electronic resource is installed, integrated and configured with the FBR’s computerised system.
The same expenditure could not be claimed more than once under Section 64D.
Taxpayers would also be required to provide details through the return or a schedule available on IRIS, including the electronic resource description, vendor or supplier details, invoice or agreement reference, acquisition or implementation date, amount invested, integration or resource identification number and activation or commissioning date.
The proposed credit would remain subject to verification by the Commissioner using records maintained under Section 174 of the Income Tax Ordinance.