It can be quite distressing to get a legal FBR Tax Notice. It means that something is wrong and you are required to respond and act. Furthermore, avoiding an FBR tax notice can carry serious financial and legal repercussions. In this blog, we will discuss the most common FBR tax return notices and the possible consequences of failing to comply.
Common Income Tax Notices in Pakistan
- FBR Tax Notice in Pakistan (Section 114 (4)) – this notice requires a person to file a return for up to 5–10 years in the past in the case he or she has not filed in that period. Failure to respond may lead to penalties and strict evaluations.
- Asset Explanation Notices or Audit Section 177: This notice is received by FBR when your records have to be audited by FBR for a time of up to 6 years. This notice can be issued as per Section 177(1).
- Section 111(1): FBR issues this notice when it suspects that you have undeclared income or assets. When a taxpayer is unable to explain this, the FBR can consider the amount as hidden income and can include it in the taxpayer’s gross income as it may lead to further taxation and imposition of penalty.
- Show Cause for Rectification of Mistakes (Section 221 (2)): This notification is sent when errors or differences are detected in a tax filing and the taxpayer needs to respond to clarify the errors, and must file an amended tax return.
- Notice for Monitoring of Withholding Taxes (Section 161 (1A)/205): This notice enables FBR to track your compliance with the withholding tax provisions. This notice is received when any irregularities are detected in terms of failure to deduct tax on time, under-deduction, late payment or failure to file withholding statement.
- Notice to Obtain Information or Evidence (Section 176): FBR may issue this notice in case it requires additional information or evidence to fulfill its assessment or audit. This is normally a part of an investigation process.
How to Respond to FBR Notice
1. Check the Dates and Save Evidence
Before compliance, it is important to check the date on which the notice was received and the date on which it was sent. Save evidence of your delivery time (a post receipt, time stamp on a message, or screenshot of a text message, if received via SMS). This may come in handy in the future, particularly in case you are appealing or explaining about a delay.
2. Note the Deadline and ask for an extension (if necessary)
Double-check the deadline for responding in the notice. If it is impossible to compile the response in the given time, ask for an extension.
3. Compare with Similar Cases
In case you have had a similar problem earlier, you can look through how you coped with it and what it resulted in. It is also possible to find some pertinent case law or examples online in order to find out how similar issues were handled.
Why are more Pakistanis Receiving FBR Notices in 2025?
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What Happens if You Ignore the FBR Notice
Neglecting an FBR tax notice may trigger a series of reactions:
- Penalty: Failure to file under Section 114 can result in) a daily penalty of 0.1 % of the tax payable up to 50% of the amount of tax, which might be up to PKR 20,000.
- Asset Recovery Actions: As part of asset recovery measures, the FBR can court any unpaid taxes to seize properties or freeze bank accounts in line with Section 138 of the Income Tax Ordinance.
- Legal Action: Failure to comply with an FBR notice can result in additional recovery actions or prosecution. Section 182 imposes strict penalties, either 3% of the tax involved or PKR 30,000, whichever is greater of the two.
- Damaged Reputation: Failure to respond to an FBR Audit or tax return notice may make your name appear in the Inactive Taxpayer List (ITL), and this will prevent you from acquiring government contracts, or may even lose the privilege to purchase and sell property.
How to Check FBR Tax in Pakistan
To verify FBR tax in Pakistan, use the IRIS portal. After logging in, you can check your inbox for any notices. Your filed returns and other information can also be reviewed. You can verify tax payments by providing the PSID/CPR number in the FBR’s online verification facility
Let Sidekick Handle Your FBR Tax Notices
Dealing with an FBR notice can be stressful and sometimes complex without professional help. Sidekick is an expert agency fully equipped to provide you with a variety of expert support to guarantee FBR tax notice observance.
They provide:
- Efficient assistance of the professionals to make error-free responses within statutory deadlines.
- Advice on how to resolve issues via written evidence.
- Communicate with Inland Revenue officers to clarify notices, negotiate, or appeal notices.
Sidekick has expert knowledge of FBR practices such as notice codes, recovery processes, and valuation of assets that can play a vital role in any issues you face regarding your FBR tax return.
Conclusion
If left neglected, the FBR tax notice may result in bigger financial fines, property confiscation, and damage to the associated reputation. Quick response, proper documentation, and professional guidance are key. Do not wait until FBR takes legal action against you. Act first and vigilantly to protect your tax history.