FBR likely to extend tax return deadline

ISLAMABAD: The Federal Board of Revenue (FBR) is likely to come out with a notification announcing an income tax return filing date extension for the year 2025, shifting the deadline from September 30, 2025, to October 14, 2025.

The FBR has a planned announcement at midnight tonight, the sources added.

To date, 3.6 million tax filers have submitted their returns. The income tax filers’ internal target is 10 million for the current fiscal year, as per the tax department. 7.6 million returns were filed last fiscal year, 2024-25.

According to ProPakistani, sources said that this target is not IMF-imposed but an internal target provided by the FBR.

The extension comes as the FBR faces mounting pressure to boost compliance and meet its ambitious revenue goals. The move is expected to provide much-needed relief to taxpayers struggling with technical glitches and last-minute rushes.

Tax professionals and business groups have been urging the FBR to extend the deadline, citing ongoing issues with the online filing system and the need for more time to complete documentation.

As per a letter by Faraz Fazal Sheikh Advocate, President Rawalpindi Islamabad Tax Bar Association to the Prime Minister, Section 118 of the Income Tax Ordinance, 2001, mandates (a) individuals and bodies of persons having tax year from 1st July 2024 to 30th June 2025, and (b) companies having year-end from 1st July 2024 to 31st December 2024, to submit their Tax Year 2025 returns not later than 30th September 2025.

The letter respectfully asks the Prime Minister to instruct the Federal Board of Revenue (FBR) to issue a circular extending the filing date at least until 31 December 2025. It further asks that the extension be announced in wider circles through electronic and print media to save from millions of individual requests for extension.

The request is based on some challenges:

Delayed Issuance of Return Forms

According to Rule 34A(2)(e), (3), and (4), FBR had to issue final return forms in July 2024. However, the forms were released only on 18 August 2025, more than 13 months behind schedule.

SRO 1562 (issued on 18 August 2025) brought about eight types of electronic returns, whereas SRO 1561 brought about simplified electronic IT return forms for salaried individuals having no business incom

This delay had a considerable negative impact on the effective duration available to taxpayers for preparing and filing correct returns.

Floods, Torrential Rain, and Internet Disruption

Intense rains in August and early September 2025 made the whole country vulnerable, with crippling floods hitting Khyber Pakhtunkhwa, Punjab, and Sindh.

These, along with the overall slow internet speed, have made it challenging for taxpayers to view and submit returns on the IRIS system. The ensuing cash flow restrictions have further restricted taxpayers’ capacity to satisfy their obligations, even with advance and withholding tax deposits.

IRIS System and FBR Policy Issues

The IRIS system has consistently slowed down or failed consistently during September 2025, resulting in incomplete filing and frequent loss of data, even after returns were preserved. Taxpayers frequently had to begin the process from the beginning.

Tabs and sections in IRIS have vanished and returned at different times, resulting in delays and confusion. The addition (on 23 September 2025) and late deletion (on 26 September 2025) of the Fair Market Value column also caused more confusion within days of the deadline. Historically, IRIS slows down close to filing deadlines, and these problems are still pending.

Expected Return Volume and Non-Compliance

On the basis of the recent Active Taxpayers List (ATL) and government reports, a minimum of 10 million returns will be filed for Tax Year 2025.

Despite advance payments through withholding and advance taxes, the short remaining period is not enough time for taxpayers to file correct returns. Granting an extension up to 31 December 2025 will enable compliance, preserve taxpayer confidence, and lower the trust deficit.

Differences in FBR/PRAL and Upgrades

The scheduled closure of PRAL by December 2025 and unfinished IT system upgrades threaten to disrupt tax-related operations. Despite government digitization efforts and World Bank assistance, divided responsibility and delayed readiness of data centres have restricted system dependability.

Issuing an extension would avoid complications in PRAL’s transition and shield taxpayers from technical breakdowns.

In consideration of these difficulties, the letter calls for extending the deadline for filing for Tax Year 2025 to at least 31 December 2025, with an immediate issue of an official circular and public announcements via electronic and print media. This will enable taxpayers to make accurate returns, minimize errors, and fortify voluntary compliance, the letter contends.