Lahore, October 13, 2025 – The Lahore Tax Bar Association (LTBA) has appealed to Prime Minister Shehbaz Sharif to grant a further extension in the 2025 income tax return filing deadline, citing persistent technical glitches in the Federal Board of Revenue’s (FBR) IRIS portal that continue to obstruct timely filing.
In a detailed letter addressed to the prime minister, LTBA President Muhammad Asif Rana highlighted that although the return filing deadline was previously extended to October 15, 2025 via Circular No. 4 of 2025-26, many taxpayers are still unable to submit their returns due to system malfunctions. The LTBA emphasized that the problems with IRIS have resulted in calculation errors, repeated submission failures, and widespread frustration among taxpayers and tax practitioners alike.
The association outlined three major technical issues that have created serious compliance hurdles. Firstly, the incorrect working of tax credit and application of Section 4AB on the exempt share from Associations of Persons (AOPs). The LTBA pointed out that as per Section 92 of the Income Tax Ordinance, 2001, income share from an AOP is exempt if the AOP has already paid tax on its income. However, the system is erroneously computing tax and applying Section 4AB on such exempt income, resulting in unjustified tax demands.
Secondly, the apportionment of tax under the minimum tax regime has also been flagged as incorrect. The LTBA stated that the system is applying apportionment — which is only relevant under the final tax regime — to minimum tax cases, contradicting both the letter and intent of the law.
Thirdly, the LTBA raised concerns regarding the wrong calculation of tax on profit on debt under Section 151, explaining that the system is misapplying rates and double-counting taxes that have already been deducted, violating Sections 7B, 8, 168, and 169(2)(e) of the Ordinance.
According to the LTBA, these unresolved systemic faults have not only delayed compliance but could also impact overall revenue collection. The association stressed that the timeline for filing has already been shortened due to administrative delays. Under Section 118 of the Income Tax Ordinance, 2001, taxpayers are entitled to 92 days from the close of the financial year to file their returns, but the 2025 return notification was issued on August 18, 2025, causing a loss of 49 days from the statutory period.
The LTBA further noted that the return form, which under Rule 34A of the Income Tax Rules, 2002, was required to be issued by December 1, 2024, was delayed by 219 days and published on July 7, 2025. Similarly, the final form was notified on August 18, 2025, nearly 199 days late.
Considering these factors and ongoing system challenges, the LTBA has earnestly requested the Prime Minister to direct the FBR to extend the return filing deadline until December 31, 2025, ensuring fair opportunity for taxpayers to fulfill their obligations without undue hardship.