Karachi, October 8, 2025 – The Pakistan Business Council (PBC) has raised concerns over an error in the calculation of tax credit on the Federal Board of Revenue’s (FBR) IRIS portal used for filing 2025 income tax returns.
In a formal letter to FBR Chairman Rashid Mahmood Langrial, the PBC stated that the system is incorrectly computing tax credits under Sections 61 and 63 of the Income Tax Ordinance, 2001. These sections relate to charitable donations and contributions to approved pension funds, respectively. The organization has urged FBR and its IT arm, PRAL, to immediately fix the issue to prevent confusion and delays in return submissions.
According to the PBC, the error arises because the IRIS system does not include the surcharge introduced through the Finance Act 2024 under Section 4AB when determining tax credit amounts. The surcharge, which applies at 10% of income tax for individuals and associations of persons earning over Rs. 10 million, is legally part of the total tax assessed under Chapter II of the Income Tax Ordinance.
PBC highlighted that both Sections 61 and 63 clearly allow tax credit based on the total tax payable, including all surcharges. However, the IRIS system currently ignores the surcharge component, resulting in lower credit calculations for taxpayers.
The business body emphasized that this issue contradicts the law and undermines the accuracy of tax return processing. It also causes practical difficulties for taxpayers attempting to file returns correctly.
The PBC has therefore urged the FBR to instruct PRAL to align the IRIS system with the legal provisions, ensuring correct computation of tax credit in future returns. Prompt action, it added, will build taxpayer confidence and improve compliance with the country’s digital filing framework.