FBR rules prescribe daily fines for late income tax returns, with minimum penalties of Rs10,000 for eligible salaried individuals and Rs50,000 for other cases.
The Federal Board of Revenue (FBR) has prescribed monetary penalties for failure to file income tax returns and submit wealth statements during Tax Year 2027 under the Income Tax Ordinance, 2001.
According to the ordinance updated up to June 30, 2026, Tax Year 2027 runs from July 1, 2026, to June 30, 2027. The penalty provisions apply to individuals and other persons required to meet their income tax filing obligations.
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Under the prescribed rules, a person who fails to furnish an income tax return under Section 114 by the due date may face a penalty equal to the higher of 0.1% of the tax payable for the relevant tax year or Rs1,000 for each day of default.
The minimum penalty is Rs10,000 for an individual deriving 75% or more of their income from salary, while the minimum for all other cases is Rs50,000. The maximum penalty cannot exceed 200% of the tax payable for the tax year.
Relief for Late Return Filing
The ordinance provides for a reduction in penalties where a return is filed after the due date or extended deadline. The penalty is reduced by 75% if filed within one month, 50% within two months and 25% within three months.
For calculating the penalty, tax payable means the higher of the tax assessed or treated as assessed under the specified provisions of the ordinance, or the tax payable for the immediately preceding tax year for which a return was duly filed.
Penalty for Missing Wealth Statements
The FBR has also prescribed a penalty for failure to furnish a wealth statement or wealth reconciliation statement. The penalty is 0.1% of taxable income per week or Rs100,000, whichever is higher.
These provisions set out the financial consequences of failing to meet income tax return and wealth statement filing requirements in Tax Year 2027.
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