Karachi Tax Bar Association highlights unresolved legal and technical defects in the Tax Year 2026 return system and seeks urgent corrective action.
The Karachi Tax Bar Association (KTBA) has urged the Federal Board of Revenue (FBR) to urgently resolve outstanding legal, operational and technical issues in the IRIS income tax return system for Tax Year 2026, warning that the deficiencies are making it difficult for taxpayers to file accurate returns before the deadline.
In a follow-up letter to the Board, the association referred to its earlier correspondence dated May 19, August 10 and September 29, 2026. It acknowledged remedial steps taken by the FBR but said several previously reported problems remained unresolved, alongside new system-related issues.
The KTBA said the return form should facilitate taxpayers’ obligations under the Income Tax Ordinance, 2001, rather than impose disclosure requirements or restrictions without legal backing.
Filing burden and deadline concerns
The association said taxpayers face extensive disclosure requirements covering vehicle fleets, immovable properties, bank accounts, shareholders and partners in associations of persons.
It noted that the corporate return became available on August 27, while the final form was notified on September 2, 2026, leaving taxpayers limited time to compile and verify the required information. Although the filing deadline was extended to October 15, the KTBA said the additional time remained insufficient given the volume of disclosures and continuing portal constraints.
Tax calculation and filing defects
Among the newly identified issues, the association highlighted IRIS’s failure to calculate donation tax credits against Super Tax under section 4C, the requirement for non-resident AOP members to submit wealth statements, and restrictions on revising returns and wealth statements.
It also raised concerns over the unavailability of separate foreign wealth and foreign income statement forms under section 116A, incorrect opening balances following revised Tax Year 2025 wealth statements, missing downloadable declarations filed under the Small Traders Scheme and pending extension applications remaining in taxpayers’ IRIS outboxes.
Previously reported problems include incorrect minimum tax calculations under section 153, a Rs200,000 cap on adjustments of prior-year tax refunds, the absence of refund applications for Tax Year 2026 and missing downloadable filing acknowledgements.
The association further flagged the rejection of XLSX financial statements, inaccessible transitional and special tax year returns, the inability to report negative balances and impractical mandatory shareholder disclosures.
KTBA seeks immediate intervention
The KTBA has asked the FBR to remove unauthorised system restrictions, improve IRIS stability, rationalise disclosure requirements and introduce integration or bulk-upload facilities where practical.
It also called for priority resolution of the identified defects and confirmation of corrective measures, offering to engage with the FBR and PRAL to support implementation.