A.  EXECUTIVE SUMMARY

Owing to matters in Background para B (as we are constantly covering important matters in our Commentaries), due several reasons as covered in para C II, based on our over 33 years’ Post CA cum CMA Qualification Tax Experience, we are of the crystal clear view that extension is expected till 14.11.25 OR atleast till 31.10.25. 

Hence, Professionals may work hard (like our team doing too), however, no need to feel pressure but take care of yours & team Health.  

We appreciate Tax Bars, PAFO & PBC in highlighting Glitches in Return Forms & IRIS issues, which lead to the resolution of several matters, while certain issues are still pending.

B.   BACKGROUND

1.   In Business Recorder of today, the undersigned matters was well covered as A Karachi based Top Expert  voices concern over problems facing newly-registered taxpayers, Password recovery, Tax Credit, etc issues, hence suggested govt to allow. He appreciated Tax Bars PBC, PAFO efforts https://epaper.brecorder.com/2025/10/14/3-page/1069940-news.html (Attachment 3307.1)

2.  This refers to our TLQCs in trail, in blue, in italic and after double line (a) 3293 of 1.10.25 about ITR TY 2025: Deadline extended to 15.10.25 as predicted and KC Views &          Recommendations (b) 3291 of 30.9.25 about IT Return TY 2025: FBR likely to extend deadline, ISA (c) 3290 of 30.9.25 about IT Return TY 2025 – FBR claimed that no extension & KC Views

3.  We also refer to TLQC 3288 of 28.9.25 about IT TY 2025 Return Extension inevitable as over 15 Reasons – which was Recommendations were published in Business Recorder of 29.9.25 as Expert (Asif Kasbati) warns of IRIS slowdown on 29 & 30.9.25 plus for 15 Other reasons, he recommended Govt to announce extension - Sohail Sarfraz 

C.   UPDATED COMMENTARY

(I)   RETURN FILING DEADLINE

As per section 118, (a) Individuals & Associations of Persons having year from 1.7.24 to 30.6.25 and (b) Companies having year-end between 1.7.24 to 31.12.24 are required to file TY 2025 Return on or before 30.9.25. However, the same has been extended to 15.10.25 (TLQC 3293 0f 1.10.25 refers)

(II)   EXPECTED EXTENSION REASONS

Based on over 33 years’ core tax experience, we understand that General Extension is likely to be allowed at 31.10.25 owing to the following several reasons; however, refer to Timely Filing and Extensions Paras as well: 

 1.  4G closure in Islamabad & Pindi and Law & Order situation 

 4G closure in Islamabad & Pindi (Attachment 3307.2) and Law & Order situation in Lahore, Twin cities, Karachi etc is leading to leading to IT Return extension, as affecting delays due to pressure on Wifi and disturbance in several areas.

2.   Problems being faced by the newly-registered taxpayers

There were serious concerns over newly-registered taxpayers’ problems in return filing issues which were only resolved 2-3 days ahead of the return filing deadline of 15.10.25. This is surprising against Government claims that the IRIS system is properly functional.

3.   Password Recovery Issues

There were also serious concerns for current NTN holders in password recovery issues which were only resolved 2-3 days ahead of the return filing deadline of 15.10.25, which is surprising and against government claims that the IRIS system is properly functional.

4.   Tax Credit Miscalculation

Tax credit (to Donors and Voluntary Pension Fund Investors) is being allowed on a lower side on IRIS, as tax credit calculation is not taking into account Surcharge. Tax definition includes other charge or any sum or amount livable or   payable under Income Tax Ordinance and is a broad term that includes Surcharge under section 4AB. Our view is supported by section 149 wherein the words Tax under section 4AB has been used “Salary” for the tax year in which the payment is made including tax under section 4AB”. Tax credit sections 61 & 63 states the term “Tax assessed” which has been used beyond any shadow of doubt that tax assessed is as per taxpayer himself [and deemed assessed under section 120(1)(b)].

We estimated the current filing number is around 5 million on 13.10.25, which is far less than the taxpayers appearing on the Active Taxpayers List (ATL) of about 8.3 million for TY 2024. We suggest that taxpayers on the ATL & New Taxpayer should be given an opportunity to file their returns during an extended period till 15.11.25 or at least 31.10.25, which the FBR is recommended today (via Business Recorder) to announce on today, to avoid extension application filing headache, when already last filed extension has not been removed from IRIS so far.

5.   Return Forms Final Deadlines missed by FBR & PRAL

Considering Rule 34A(2)(e), (3) & (4) - TLQC 1224 in trail refers - the FBR was supposed to issue the Final return Forms SRO by 1.1.25 but late by over 6 months, as evident from below:

5.1   Delayed 8 types of categories of Electronic (TLQC 3244 of 24.8.25 refers) which were issued vide SRO 1562 dated 18.8.25.

5.2   As evident from TLQC 3243 of 24.8.25, So-Called Simplified Electronic IT Return Forms for Salaried Individual, etc (not having business income) was issued vide SRO 1561 of 18.8.25.

5 .3  No manual tax return forms / paper return form: FBR faces criticism for its persistent failure (Attachment 3307.3)

6.   Flood, Rain & Slow, Internet Speed and related Effects

6.1 Torrential rain affected the whole country in August & early September 2025.

6.2 Devastating Flood affected KPK, Punjab & Sindh during August till release of this TLQC.

6.3 Owing to above two issues, in August & partly now too, Internet Speed Issue in the entire country, inspite of Govt Claim of Digitization.

6.4 Owing to above three issues, there is Cash Flow crunch in the Economy as a ground reality, though Govt is claim improvement in constant improvement in Economy and Inflation reduction.

6.5 The above four matters affected Offices for several days and Office work too.

7.   IRIS and FBR Policy Issues

7.1   IRIS was not responding on 1.10.25 & a few other days too.

7.2   IRIS is likely to be working very slowly tonight / not working in several parts of the country & 15.10.25 as the Taxpayers face this issue almost every year; as we understand that IT speed system issues are still not fully resolved.

7.3  Change on to showing Fair Market Value of Property was incorporated in late September and upon PTBA & KTBA objections removed the same on 26.9.25 (TLQC 3287 of 27.9.25 in trail refers), just 4 days before the earlier deadline of 30.9.25.

8.   Similar Deadlines Deadlines lead to load on IRIS

8.1 Annual Sales Tax extended Return deadline

8.2 E-Invoicing & Integration deadline for Public Companies, Other Companies having turnover of over One billion, etc is 15.10.25.

9   Return Quantity matters

9.1   As per Former FM Shaukat Tarin, there were 15M Non-Filers data with FBR as per video (click on the link to watch video). As per News Clipping of 29.6.21 (Attachment 2910.1), the Former FM stated that there are 15M Potential Taxpayers.

9.2   As per Former SA to PM Dr Waqar Masood stated earlier that there are 7.4M expected Non-Filers in Press (Attachment 2910.2).

9.3   Having stated above, we expect that minimum 10M returns (TLQC 1961 of 3.12.24 refers) will be filed for TY 2024, which has been agreed by the PM too.

9.4 ATL Analysis from Tax Years 2021 to TY 2023

 9.5 Tax Year 2023 VS TY 2024 

9.6   Present Coalition Govt Quantitative Plan

As covered in our TLQC 2847 of 26.7.24, we reiterate the PM Orders FBR to Immediately Bring 4.5 Million Non-Filers into Tax Net (Attachment 2961.1) on 5.7.24 in addition to 5.4M NTRN holder as per TLQC 2859 of 2.8.24. Hence, 10M as per our prediction, as per Govt too, though reached at about 5M till 13.10.25 (and TY 2024 returns are about 24% increase over last year TY 2023, which is highly appreciated (however, income tax collections from new taxpayer has to be seen by the Govt).

10.  Expected returns filed and Non-Compliance issues

10.1   Based on our over 33 years’ pure tax experience, we anticipate about 5M would have been filed, even if we keep the benchmark of 8.4 million of TY 2024. In line with its proper disclosure and declaration, the remaining time is not sufficient for the tax filers to arrange their payment of tax and file their proper and correct declarations even though 90% of the demand has already been paid by the tax filers by way of withholding taxes and advance taxes.

10.2 Considering the aforesaid circumstances, we strongly acknowledge the contributions of the tax filers whose names are appearing in the latest ATL, by giving them relief if by any chance they are unable to file their tax returns before the deadline of filing i.e. 15.10.25.

10.3 We are of the view the aforesaid granting one month extension or atleast till 31.10.25 will enhance the tax filers confidence on the Government, reduce the trust deficit and they will reiterate their commitment to Pakistan by paying their due shares of taxes, even at the cost of their depleting financial health.

11. FBR & PRAL Differences and PRAL Closure by December

11.1 It was covered in TLQC 3235 of 10.8.25 about Hacking & KC Recommendations and PM orders PRAL closure in 6 months (Attachment 3235.1) owing as the government had also taken a foreign loan in 2019 to upgrade technology systems, but all deadlines have since lapsed.   

11.2 The government has been attempting to modernize the FBR's information technology infrastructure, set up new data centers, and implement an automated income tax refund system with the help of a $400 million World Bank loan. Out of the $400 million, $80 million was earmarked for technology upgradation. However, the systems could not be upgraded due to divided responsibilities and authority as Two FBR wings. Reforms and Information Technology, were looking after affairs, diluting both authority and responsibility.

11.3 PM had then further instructed that a new organization should be composed of top-notch professionals and should have full functional and financial autonomy. He ordered that the new body must serve as the pivot for FBR's digital transformation and provide world-class, end-to-end user experience for both the FBR and taxpayers.

11.4.   However, it will be challenging for the government to establish a whole new organization by December this year to seamlessly take over PRAL's responsibilities without disrupting tax-related functions. This is especially difficult given that authorities failed to hire a chief information security officer for PRAL despite multiple attempts.

11.5 Sources said PM Sharif had instructed that PRAL's new data centers be inaugurated soon. The FBR had targeted August 14 for the launch, but the servers are not yet ready, and there is a possibility the PM may not be able to inaugurate fully equipped centers on Independence Day.

11.6 As covered in TLQC 3246 of 25.8.25 we covered about the PM reaffirmed news that PRAL to be Shutdown by December 2025 (Attachment 3246.1).

12.  Extension requests from various Quarters

12.1 Owing to several reasons, Tax Bars & PAFO have applied for extension.

12.2 Moreover, certain Trade bodies have also already applied for similar extensions.

12.3 We expect more applications from several Bars, Trade & Industry Bodies too shortly.

(III)   TIMELY FILING

Having stated above, in order to avoid any Default Surcharge, Penalty & Notices, we recommend you submit your Income Tax Return as soon as possible by 15.10.25, without taking stress.

(IV)   EXTENSION APPLICATION

If you’re Good self could not file a return by 15.10.25 by way of abundant precaution, we recommend submitting an online extension application with applicable reason from this TLQC and keeping in view Section 119 which is reproduced below for ready reference:

119. Extension of time for furnishing returns and other documents.— (1)  A person required to furnish —

(a) a return of income under section 114 or 117;

(b) & (c) Omitted

(d) a wealth statement under section 116, may apply, in writing, to the Commissioner for an extension of time to furnish the return, or statement, as the case may be.

(2) An application under sub-section (1) shall be made by the due date for furnishing the return of income, statement to which the application relates.

(3) Where an application has been made under sub-section (1) and the Commissioner is satisfied that the applicant is unable to furnish the return of income, statement to which the application relates by the due date because of —

(a) absence from Pakistan; 

(b) sickness or other misadventure; or

(c) any other reasonable cause, the Commissioner may, by order, in writing, grant the applicant an extension of time for furnishing the return, or statement, as the case may be.

(4) An extension of time under sub-section (3) should not exceed fifteen days from the due date for furnishing the return of income, employer’s certificate, or statement, as the case may be, unless there are exceptional circumstances justifying a longer extension of time:

Provided that where the Commissioner has not granted extension for furnishing return under sub-section (3) or sub-section (4), the Chief Commissioner may on an application made by the taxpayer for extension or further extension, as the case may be, grant extension or further extension for a period not exceeding fifteen days unless there are exceptional circumstances justifying a longer extension of time.

(5) Omitted

(6) An extension of time granted under sub-section (3) shall not, for the purpose of charge of default surcharge under sub-section (1) of section 205, change the due date for payment of income tax under section 137.

(V)   SHARING THIS EMAIL TO FBR & MEDIA

We are concurrently sharing this email with FBR officials to consider the same and grant general extension in order to avoid non-compliance at large by over 5M extension letters and approval thereof. 

For the public benefits at large, we are sharing this comprehensive email to Print & Electronic Media Representative.

(VI) CONCLUDING REMARKS

Knowing that Great Tax Consultants are working hard (including our team is working till late night for several days, even working on Sunday 12.10.25 too and has plans in the next few days), however, we recommend that no need to feel pressure but take care of yours, theirs & team Health too.  

(VII)   MULTIPLICATION ALLOWED

Although all the Commentaries are for the Subscribed IDs only, however, your Goodself is allowed to share this QC (with trail) for the Noble Cause to Impart Knowledge to maximum.

(VIII)   FURTHER DETAILS & SERVICES

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com OR call r Amsal at 0313 9233 1111. Your Goodself may continue to get other services from your current Tax & Legal Advisors.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (1760+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

    Quick Commentary Service Provider and High Level 590+Tax & Levies, etc Laws Consultants) 

Head of Tax & Professional Excellence Services (Symbols of High Quality Practical Tax, Levies & Corporate Training for Beginners to High Levels' Professionals) PTCL: 92-21-34329108 Mobile: 0334 322 3161 Website: kasbati.co Facebook:  https://www.facebook.com/taxexcellence/ Google Map link: Tax Excellence  YouTube Channel Tax Excellence