Section 146 of the Income Tax Ordinance, 2001 outlines how tax authorities can recover unpaid income tax from individuals assessed in Azad Jammu and Kashmir and Gilgit-Baltistan who reside or hold assets in Pakistan.
ISLAMABAD: The Federal Board of Revenue (FBR) has explained the procedure for recovering unpaid income tax from persons assessed under the income tax laws of Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan during tax year 2027.
According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, Section 146 provides a mechanism for recovering outstanding tax where the relevant income tax authorities in AJK or Gilgit-Baltistan are unable to collect the amount.
Tax year 2027 runs from July 1, 2026, to June 30, 2027.
Recovery of tax from persons assessed in AJK and Gilgit-Baltistan
Under Section 146(1), where a person assessed to tax under the income tax laws of AJK or Gilgit-Baltistan fails to pay the outstanding amount, the relevant Deputy Commissioner may forward a recovery certificate to the Commissioner in Pakistan.
This procedure applies where the income tax authorities in AJK or Gilgit-Baltistan cannot recover the tax because the person resides in Pakistan or has no movable or immovable property in AJK or Gilgit-Baltistan.
Upon receiving the certificate, the Commissioner is required to recover the outstanding tax in accordance with the relevant recovery provisions of the Income Tax Ordinance, 2001.
Information required in recovery certificate
Section 146(2) specifies the information that must be included in the recovery certificate, which must be prepared in the prescribed form.
The certificate must provide:
• Place of residence: The person’s residential address in Pakistan.
• Property details: A description and location of the person’s movable or immovable property in Pakistan.
• Outstanding tax: The amount of income tax payable by the person.
These requirements establish the information needed to facilitate recovery proceedings against a person whose tax liability has arisen under the income tax laws applicable in AJK or Gilgit-Baltistan.
The provision provides a legal mechanism for coordination between the relevant tax authorities and the Commissioner in Pakistan to recover unpaid tax where local recovery efforts in AJK or Gilgit-Baltistan are unsuccessful.