Income tax refund can be claimed within two years from filing return date

Income tax refund can be claimed within two years from filing return date

The Federal Board of Revenue (FBR) has reminded taxpayers that income tax refunds can be claimed within two years from the date of filing the tax return or from the date the tax was paid, whichever is later. This clarification aims to guide taxpayers through the refund process and ensure they comply with deadlines, avoiding any potential loss of entitlement.

In an official statement, the FBR emphasized that only taxpayers who file their Income Tax Returns electronically through the Iris system are eligible for refunds. Manual filings, it noted, are not valid for refund claims. “A manual return does not entitle a taxpayer to a refund,” said the FBR, underscoring the importance of electronic filing for all taxpayers seeking refunds.

Additionally, the FBR explained that the refund amount must be clearly mentioned in the Income Tax Return filed in Iris. Once the return is submitted, taxpayers must file a separate application within the Iris system to formally claim the refund. Taxpayers are also encouraged to visit their relevant Regional Tax Offices (RTOs) to check the status of their refund claims.

“The refund can be claimed later after submitting the Income Tax Return,” the FBR reiterated, “but the application must be made within two years from the date of assessment or the date the tax was paid, whichever occurs later.” The deadline is crucial for taxpayers to observe, or they risk losing the opportunity to receive a refund.

However, the FBR has placed a restriction on late filers. Taxpayers who file their returns after the specified due date will not be eligible for a refund during the period they are excluded from the Active Taxpayers List (ATL). The FBR noted that no liability will be incurred for compensating delayed refunds during the time a taxpayer is not listed on the ATL. Moreover, the time during which a taxpayer is off the ATL will not be counted when calculating any additional payment for delayed refunds.

This clarification serves as an essential reminder for taxpayers to adhere to the guidelines to ensure timely claims and refunds. Taxpayers are advised to stay vigilant, file their returns within deadlines, and ensure they are on the ATL to avoid complications in the refund process.