FBR sets a Rs50,000 penalty for certain late withholding statements, while other defaults may attract fines of Rs2,500 per day, subject to a minimum of Rs10,000.

ISLAMABAD: The Federal Board of Revenue (FBR) has prescribed monetary penalties for withholding agents who fail to submit withholding tax statements within the stipulated deadlines during Tax Year 2027.

According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, the provisions apply to Tax Year 2027, covering July 1, 2026, to June 30, 2027.

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Under the relevant penalty provisions, any person who fails to furnish a statement required under Sections 165, 165A, 165B or 165C by the due date may face financial penalties.

Penalties for Late Withholding Statements

The ordinance prescribes a penalty of Rs50,000 where the person has already paid the tax collected or withheld within the prescribed payment deadline and submits the outstanding statement within 90 days of its filing due date.

In all other cases, the penalty is Rs2,500 for each day of default, subject to a minimum penalty of Rs10,000.

The law also specifies that where it is established that no tax was required to be deducted or collected during the relevant period, the minimum penalty will remain Rs10,000.

Compliance Requirements

The provisions cover withholding statements required under the specified sections of the Income Tax Ordinance. These reporting requirements form part of the FBR’s tax compliance framework for persons responsible for deducting or collecting tax.

Withholding agents should ensure that applicable statements are submitted by their respective deadlines and that deducted or collected taxes are deposited within the prescribed time to avoid penalties under the law.

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