Benefits of being an Income Tax Filer in Pakistan

Paying tax and on-time filing of tax returns is the responsibility of every citizen of any country. Any citizen who has a certain level of annual income either from salary or business, he must have to register himself at FBR's online tax filing system, iris.
There are many benefits of filing income tax returns in Pakistan but most of the people don’t know much detail about it.

Benefits of filing Income Tax Returns in Pakistan

Here I would like to state few benefits of being an income tax filer in Pakistan: 

Name in ATL

Saving in Withholding Tax (WHT)

You will save in WHT taxes on your bank transactions (cash withdrawals and money transfers etc.) as compared to those who are non-filers. 
On cash withdrawal (Over Rs. 50,000): Filer – 0.3%, Non-filer – 0.6%. Rs. 300 per lac for filers and Rs. 600 per lac for non-filers. 
No taxes for filers on bank transactions (Cross cheque, pay order, demand draft etc.).
If you have a business, less withholding taxes will be deducted on your invoices as compared to non-filers. 
Tax saving on dividends and prizes.

Vehicle Purchase

You will save on registration and transfer of vehicles. WHT on registration of vehicle is 15,000 to 2,50,000 for filers while 25,000 to 4,00,000 for non filers.
You will save on vehicle token tax as compared to non-filers. Token tax for filers is between 800 and 10,000. While token tax for non-filers is between 1200 and 30,000.

Purchase of Property

You will save taxes when buying/ selling or transfer of Property. 
On property transfer: Filer - 1%, Non-filer - 2%
On purchase of property (over Rs. 40,00,000): Filer - 2%, Non-filer - 4%

Government Tenders 

Preferences in Govt. tenders and saving in taxes. 7.5 percent tax for filers and 15 percent tax for non-filers.


For filers - 10 %, For Non-filers - 15 %

Lesser Taxes on Imports

For imports of raw material, 5.5 percent for filers while 8 percent for non-filers. It's mean on an import of Pak rupees 20,00,000, a filer will pay Rs. 110,000 while a non-filer will have to pay Rs. 160,000 as tax.
For imports of commercial material tax for filers is 6 percent and 9 percent for non-filers.

Other Benefits

  • Tax deducted at source by Banks will be lesser if you file the return otherwise it will mount up.
  • Accurate income assessment while visa and immigration processing.
  • Saving from the penalty for non-filing of the tax return. You will save minimum PKR 20,000/ which you could be liable if you don’t file tax returns.
  • 04% tax on general insurance premium for non-filers.
  • 01% tax on Life Insurance Premium (over 0.2 million annual) for non-filers 
  • On winning a prize bond; Filer - 15%, Non-filer - 25%~30%
  • Income on dividend/ payment of dividend: Filer - 12.5%, Non-Filer - 20%
  • Profit on national saving scheme or post office savings: Filer - 10%, Non-filer - 15%
  • Profit on debt paid by banking company: filer - 10%, non-filer - 15%
  • Profit on bonds, certificates: Filer - 10%, Non-filer - 15%
There are enormous advantages for filer and there is no disadvantage for becoming a tax filer. 

Salaried Persons Tax Filing Benefits

Most of the salaried persons also don’t know about the benefits of becoming an active taxpayer so they are not filing income tax returns. However, they are already paying income tax as the tax of salaried persons in Pakistan is deducted at source by their respective employers. But if they don’t file income tax returns, it makes them non-filers (even tax is being deducted from their salaries) and they end up paying excessive taxes. Salaried persons can enjoy many benefits just by filing income tax returns as they are already paying their taxes. It is mandatory for all salaried persons to fill their income tax returns; whether they are government or private employees.

Benefits of being an Income Tax Filer in Pakistan - in Urdu

When you become filer at FBR website, then your filer status is immediately conveyed to all banks of Pakistan as tax deduction is online. Banks do not deduct WHT automatically, no need to tell them.

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