Understanding the tax year is essential for accurate and timely filing of income tax returns in Pakistan. A tax year refers to a continuous period of twelve months ending on the 30th of June, representing the financial year.
It is identified by the calendar year in which that June date falls. For instance, Tax Year 2025 covers the period from July 1, 2024, to June 30, 2025.
This system helps taxpayers, businesses, and the Federal Board of Revenue (FBR) maintain uniformity in record-keeping and compliance. Filing your tax return according to the correct tax year ensures that income, deductions, and expenses are reported for the right period.
Apart from the normal tax year, there is also a “special tax year.” A special tax year refers to any twelve-month accounting period that does not end on June 30 but still falls under a particular calendar year. For example, a period from January 1, 2024, to December 31, 2024, will be denoted as Tax Year 2025, while a period from October 1, 2024, to September 30, 2025, will fall under Tax Year 2026.
Knowing your correct tax year is crucial for avoiding filing errors, penalties, and confusion during audits. Taxpayers are advised to verify their accounting periods and align them with the relevant tax year before submitting their income tax returns to the FBR.