FBR plans Rs 25,000 penalty for traders filing returns after October 15

The Federal Board of Revenue (FBR) is reportedly planning to impose a Rs 25,000 penalty on traders who submit income tax returns under the Easy Tax Scheme after October 15.

Under the reported arrangement, late filers would be required to pay Rs 25,000 in registration charges in addition to the Rs 25,000 penalty. Traders seeking an extension to register and file their returns would be allowed to do so subject to payment of both amounts, the sources said.

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The reported move comes amid a low response to the scheme, which aims to bring more traders into the formal tax system. Fewer than 150 new returns had reportedly been filed under the initiative despite efforts to increase participation. The limited uptake has also raised concerns among government officials, including the minister of state for finance.

Despite the slow response to the Easy Tax Scheme, the total number of income tax returns filed nationwide has continued to rise.

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FBR sources said approximately 6.6 million returns had been submitted for tax year 2026 by October 13, compared with around 5.8 million on September 30. The increase represents roughly 800,000 additional filings.

These figures cover taxpayers across the country and are not limited to participants in the Easy Tax Scheme.

The FBR has been seeking to expand the tax base and document economic activity by encouraging traders to register and fulfil their tax obligations.

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The report also indicated that individuals earning exclusively through salaries would not receive notices requiring them to pay advance income tax.

However, taxpayers with income from sources other than salaries could be asked to pay adjustable advance tax, subject to applicable tax rules. Such payments are generally credited against a taxpayer’s final tax liability.

If implemented as reported, the proposed charges would raise the cost of late compliance for traders to Rs50,000, combining registration charges and the penalty.

The precise legal basis and scope of the reported arrangement remain subject to confirmation through an official FBR notification or clarification.

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