FBR Ready to Impose New Tax Rules on Individual Taxpayers – Online Filing Now Mandatory

The Federal Board of Revenue (FBR) has moved one step closer to enforcing New Tax Rules on Individual Taxpayers across Pakistan. According to the latest draft amendments issued under the Income Tax Rules 2002, all individual taxpayers will soon be required to file both their income tax returns and withholding statements online. This initiative is part of FBR’s digital transformation to modernize Pakistan’s taxation framework and eliminate manual paperwork.

This major step aims to create a fully digital tax ecosystem that ensures transparency, improves compliance, and simplifies the return filing process for millions of Pakistani citizens.

What is the new tax policy in Pakistan?

The new tax policy in Pakistan focuses on digitalization and transparency in the taxation process. The Federal Board of Revenue (FBR) has introduced online filing as a mandatory step for individual taxpayers to reduce manual errors, improve data tracking, and promote compliance. Under this policy, all income tax returns and withholding statements must now be submitted electronically through the FBR IRIS portal. The aim is to modernize the tax structure, bring more people into the tax net, and ensure fair and efficient revenue collection across the country.

What is the new policy of FBR 2025?

The FBR policy for 2025 emphasizes automation and e-filing for individuals and businesses. According to the new rules, every individual taxpayer must submit their income tax return and withholding statement online only, without manual submissions. The FBR has also strengthened data integration systems with banks, NADRA, and other agencies to verify taxpayers’ financial records. This ensures accurate assessments, reduces tax evasion, and supports the government’s vision of a Digital Pakistan. The 2025 policy marks a shift toward a more transparent, technology-based tax administration.

Check Also: Record Alert: FBR 5.9 Million Tax Filers 2025 Set New Benchmark for Pakistan

How to calculate taxable income for an individual?

To calculate taxable income, an individual must first determine their gross annual income—including salary, business income, rent, and any other earnings. Next, allowable deductions such as zakat, donations, and tax-exempt allowances are subtracted to arrive at the net taxable income. The final amount is then taxed according to the slab rates defined by FBR for that financial year. For example, individuals earning below the minimum threshold are exempt, while higher income groups pay progressive tax rates ranging from 5% to 35%, depending on their income bracket.

What is the maximum salary without income tax?

As per the latest FBR tax structure, individuals earning up to Rs. 600,000 per year (Rs. 50,000 per month) are exempt from paying income tax in Pakistan. This exemption is designed to support low-income earners and provide relief from financial burden. However, anyone earning above this limit must file an income tax return and pay taxes according to the applicable rates. The government reviews this threshold periodically, so taxpayers should always check the latest FBR notifications for updated exemption limits each fiscal year.

Background: FBR’s Digital Transformation Drive

The FBR, under Section 237(1) of the Income Tax Ordinance 2001, has proposed amendments to bring Pakistan’s tax system in line with international standards. The draft amendment focuses on Rule 73 of the Income Tax Rules 2002 and is currently open for stakeholder consultation.

In this draft, the FBR has invited public feedback from individual filers, tax consultants, and professional bodies within seven days of the gazette notification. Once the feedback phase concludes, these amendments will become law—making online tax filing mandatory for all individual taxpayers.

Key Highlights of the New Tax Rules

The proposed changes are designed to promote digital governance and efficient tax management. Below are the main features of the new FBR regulations:

Why FBR Introduced These New Rules

The FBR Ready to Impose New Tax Rules on Individual Taxpayers mainly to achieve four key goals:

1. Digitalization of the Tax System:
   The FBR aims to reduce manual submissions and physical documentation by shifting all individual tax processes online.
2. Improved Transparency:
   Digital submission minimizes human errors and provides real-time record tracking.
3. Efficient Data Management:
   Electronic filings allow FBR to analyze and cross-verify taxpayer data through automated systems.
4. Ease of Compliance:
   Individuals can now file their tax returns from anywhere in Pakistan without visiting tax offices.

What Individual Taxpayers Need to Do

Under the new regulations, all individual taxpayers—including salaried persons, small business owners, freelancers, and self-employed professionals—will need to:

• Register and activate their IRIS account on FBR’s portal.
• File their income tax returns electronically.
• Submit their withholding statements online.
• Maintain a digital record of income and expenses for future audits.

Failure to comply with the new filing system could lead to penalties or delayed acceptance of tax returns.

Step-by-Step Process to File Returns Online

To help taxpayers adapt easily, FBR has simplified the process. Here’s how to file your income tax return online:

1. Visit the Official FBR Portal:
   Go to https://iris.fbr.gov.pk.
2. Login or Register:
   Use your CNIC and mobile number to create or log into your IRIS account.
3. Select the Relevant Tax Year:
   Choose the year for which you’re filing your return (e.g., Tax Year 2025).
4. Enter Income Details:
   Input salary, business income, deductions, and any other taxable sources.
5. Upload Withholding Statements:
   Attach digital withholding statements in the required format.
6. Verify and Submit:
   Review your information, confirm using OTP or digital signature, and submit the return.
7. Download Acknowledgment:
   Save your online submission receipt for future reference.

Advantages of Online Filing for Taxpayers

The FBR Ready to Impose New Tax Rules on Individual Taxpayers campaign also helps build a culture of voluntary compliance by simplifying the process for honest taxpayers.

Public Feedback and Objection Window

The FBR has encouraged the public to share suggestions, objections, or technical feedback regarding the proposed amendments.
Interested individuals and organizations can send their responses within seven days of the official gazette publication.

This transparent process ensures that all concerns are reviewed before final implementation. Once finalized, the new rules will officially become part of the Income Tax Rules 2002.

Impact on Pakistan’s Tax Landscape

The digital filing requirement is expected to have a transformative impact on Pakistan’s tax system:

• It will expand the tax net by bringing more individuals into the formal system.
• Tax evasion will become more difficult as data integration improves.
• It will enhance revenue collection and reduce administrative delays.
• Individual taxpayers will experience a simpler, paperless, and faster filing process.

These reforms align with Pakistan’s Digital Governance Agenda, reflecting the vision to modernize institutions and improve ease of doing business.

Expert Reactions on FBR’s Decision

Tax professionals and economists have largely welcomed the move.
According to experts, digitization will improve efficiency and public trust in FBR’s system.

However, they also highlight the need for:

• Upgraded infrastructure to handle large traffic on the IRIS portal.
• Awareness campaigns to guide first-time users.
• Technical assistance centers at tax offices for citizens who face connectivity issues.

Future of Taxation in Pakistan

The new FBR rules are part of a broader reform plan to make Pakistan’s economy more documented and transparent. With e-filing and e-payment systems, the FBR aims to move toward an era of smart tax administration, where technology will detect irregularities automatically.

The authority is also integrating data from banks, NADRA, and utility companies, allowing cross-verification of income sources. This ensures that only accurate information is declared during online filing.

FBR’s Message to Citizens

The FBR encourages every Pakistani citizen to embrace digital compliance and take advantage of the online system. The transition may seem challenging initially, but it will greatly simplify tax obligations in the long run.

By adopting the online system, citizens can avoid last-minute hassles, ensure accuracy, and play their part in strengthening Pakistan’s economy.

Check Also: FBR Report 2025 15 Major Sectors Generate 57% of Pakistan’s Rs.1.6 Trillion Sales Tax Revenue

FAQs – FBR New Tax Rules 2025

Conclusion – New Tax Rules on Individual Taxpayers

The FBR Ready to Impose New Tax Rules on Individual Taxpayers – Online Filing Now Mandatory reform represents a historic step toward digital governance in Pakistan’s taxation system.
By making online filing compulsory, the FBR aims to reduce corruption, increase compliance, and bring efficiency to the tax collection process.

As Pakistan continues to move toward a digitally driven economy, every taxpayer’s participation in this new system will play a crucial role in shaping a transparent and accountable future.