Section 147 Notice Explained: Why You Received One and What to Do Next

Getting a tax notice can seem terrifying, especially when it’s a Section 147 Notice from the Federal Board of Revenue (FBR). If you are a taxpayer in Pakistan, you may have heard this in reference to the Income Tax Ordinance, 2001. The notices are part of advance tax collection mechanism of S148 FBR that aim at collection of taxes for the government round-the-year. In this blog, we will explain what a 147 Notice FBR is, why you would be receiving one, give you a 147 Section notices example and what the best next steps are for carrying out 147 Section income tax compliance. Let’s break it down, and demystify it, step by step. 

 

What Are Section 147 Notices? 

Advance tax in quarterly instalments (a) Under section 147 of the Ordinance, every taxpayer, falling in the category read with his age as prescribed in column of the Table below, in respect of his income chargeable to tax for the tax year 2011, would be required to pay his advance tax in the tax year 2011, if such income exceeds the limits specified in column against such category. This provision is meant to ensure that the tax load is spread uniformly, and no hefty taxes amount are collected during the year end/ year beginning by the FBR which otherwise leads to the unstable stream of revenue for the FBR. In short, it’s not a penalty but a pro-active collection device for those who have reasonably foreseeable or high tax liability. 

It might seek payment of past-due instalments, ask for an estimate of your tax liability, or tell you that you’re due a revised assessment based on your previously filed returns. Generally, these notices are dispatched through the FBR’s IRIS portal or by way of email and it may result in penalties, surcharges or even coercive recovery actions for non-compliance while neglecting the same.  

 

Why Did You Receive a Section 147 Notice? 

Section 147 Notices are sent by FBR according to your tax status and history. Here are the common reasons: 

  • High Tax Liability from Previous Year: If you owed more than PKR 1,000,000 (or similar limit for companies) in taxes in your last assessed year, you have to pay advance tax. The IRS used last year’s data to estimate it and inform you if you need to pay. 
  • Failure to Pay Quarterly: Quarterly payments of advance tax are due on September 25, December 25, March 25, and June 15. Missing deadlines triggers a notice. 
  • Income Changes or Underestimation: If your business income has increased, or if you have added income sources (i.e. rentals for salaried individuals) the FBR may reopen and serve a notice for the shortfall. 
  • No Prior Payments or Adjustments: You have paid advance if you have paid shrinking tax (TDS) but if it is not sufficient to pay off your advance liability then you get a notice. The focus is particularly on companies and partnerships. 

There are exemptions under Section 147 FBR such as low-income (less than PKR 1,000,000 annual income), those who fall under the Final Tax Regime (FTR), for example the dividend earners, or salaried individuals with full TDS don’t have to pay advance tax. If that applies to you, the notice might be wrong. 

 

Step-by-Step Guide for Respondence: 

Well, fear not, a Section 147 Notice can be overcome if you act swiftly. Here’s how to respond: 

Review the Notice Thoroughly: Visit IRIS Portal to download details. Record the amount requested, the deadline for a response and the justification. Verify against your records. 

Assess Your Liability: Calculate your advance tax with this formula: Estimate taxable income × applicable rate ÷ 4 (per quarter), minus earlier payments such as TDS. You can use tools on the FBR website or a tax calculator. 

Pay If You Agree: Pay the amount via FBR portal, ATMs or banks before the last date. This prevents additional charges (0,1% per day). 

Dispute or Revise If Needed: If the estimate is wrong (for example, the year’s income was lower than expected), submit a revised estimate and include proof (for example, bank statements or profits/loss accounts). Write to Commissioner Inland Revenue under S. 147 FBR for adjustment. 

Claim Exemptions or Adjustments: Do you have exemption (file income certificate). They can be used to offset later ones if you paid too much in earlier quarters. 

Get professional help: If things are very complicated such as hearings opt for a chartered accountant or a tax consultant. It prevents issues becoming escalated to audits or civil recovery. 

Maintain Records: Keep your filings up to date to avoid future Section 147 Notices. 

By taking these simple steps, you can address the problem quickly while at the same time remaining compliant with the Income Tax Ordinance! 

 

Exemptions Under Section 147 FBR 

You may be exempt from advance tax if: 

  • Your annual income is below PKR 1,000,000 
  • You fall under specific exempt categories in the Income Tax Ordinance 
  • You’ve already paid sufficient tax through withholding or other means 

 

Common Mistakes While Handling a Section-147 Notice: 

  • Failure to Notice: Other taxpayers withhold payment until there’s a late penalty and a default surcharge.
  • Misunderstanding Tax Calculation: Not cross-checking advanced tax estimated with the actual income or turnover may lead to over or under payment.
  • Missing Payment Deadline: Penalty can also be imposed or recovery can be made where advance tax is not collected. 
  • Non-use of IRIS for Response: FBR presumes that notice is accepted and treats accordingly.
  • Assuming Exemption without Confirmation: If lower income or existing tax credits are thought to be an exemption, then it makes one non-complaint and chain of legality issues.
  • Not Seeking Advice From a Tax Adviser: Complex computations and disputes are best left to the experts so errors are not made that would limit opportunities for further legal relief.
  • Overlooking Documentation: If you don’t keep good records of your income estimates or exemption claims, you can have a hard time fighting the FBR.

 

Stay Active with CBM Consultants 

CBM Consultants with independent processes to identify assists you to be compliant of a Section 147 Notice from FBR. This is done by correct amount of advance tax and reconciliation of FBR’s estimate. As well as, payment of on-time advance tax and representation in case of disputes. We also perform strategic tax planning, maintain records, and handle instalments so you can avoid any penalties, mitigate risks and concentrate on your business while abiding by the income tax ordinance. 

 

Conclusion 

The Section 147 Notice is their way to ensure that the tax due is just, in accordance with 147 Section income tax law. It can be intimidating, but reading through the provisions of Income Tax Ordinance, 2001 is what gives you strength. Be proactive with quarterly estimates, utilize exemptions, and get advice when in doubt. If you’ve received one in the last few weeks, act now to minimize the penalties and keep your tax matters in order.  

How Do Companies File GST and Tax Returns in Pakistan?

File GST and Tax Returns

Below is a brief overview of what corporate tax law compliance looks like in Pakistan. Filing GST returns and tax returns on time and correctly is one such responsibility. The FBR-mandated system is designed to keep businesses in the net, so they do not fall into the non-filers’ category while they also keep the revenue cycle running which otherwise could have gone on a penalty spree. This blog outlines everything you need to know about GST tax return And Tax Return Filing Will be discussing the GST tax in Pakistan, What is GST and tax return filing process in Pakistan. 

 

Understanding GST Tax in Pakistan 

GST tax in Pakistan, often referred to as Sales Tax, is a value-added tax levied on the supply of goods and services. There’s a standard rate of 17%, with a few adjustments here and there depending on items or sectors. It’s federally collected through the FBR and businesses that have a turnover beyond a certain threshold are required to register for it. This tax goes toward public services and infrastructure, so it is important for companies to know that and follow the law. 

For companies, GST is charged on business-to-business domestic sales (including imports) and collected at every stage of the supply chain. Input tax credits enable businesses to offset taxes they pay on purchases against those collected on sales, which lessens the overall burden. 

 

What is GST Return? 

What is GST return? In simple words, a GST return is a statement which a person registered under the FBR is required to file with the tax authorities. It contains the details of sales, purchases, output tax (i.e. tax collected from the buyer) and input tax for a certain period. This is equivalent of sales tax return in Pakistan because here GST basically sales tax structure. For most businesses, a report is filed once each month, detailing taxable activities that have occurred so that there are transparency and accuracy in the collection of taxes. 

If you don’t file these returns, you can be fined, forced to pay interest, or worse, face legal action, so knowing what GST return means your first step is toward becoming a complaint taxpayer. 

 

GST Return Filing in Pakistan: Step-by-Step Guide 

GST return filing in Pakistan has been simplified by digitalizing it, which is now an easier way for the firms to comply. It’s a complete online procedure using FBR’s IRIS portal. So, here’s how businesses can manage GST return filing in Pakistan: 

Registration: Prior to filing, be aware that your business should have an STRN. If not, go to the FBR website and sign up, answering questions about your business and supplying your NTN (National Tax Number) and supporting documents, such as bank certificates and a utility bill. 

Compile Documentation: You will require sale and purchase invoices, input/output tax report and any adjustments for the time period. 

Login to IRIS: Login to FBR e-portal with your username and password. Go to the “Sales Tax Return” area. 

Fill the Form: Follow the annex C (summary of sales and purchases) by 10th of the next month. Then complete the main return form with information on taxable supplies, exemptions and tax calculations. 

Make Payment: Net tax due should be paid by the 15th through Internet Banking or using online payment facility. 

File the Return: File the full return by the 18th. A confirmation will be produced by the system. 

This monthly cycle applies to most companies, though some may qualify for quarterly filing based on turnover. 

Sales Tax Return Filing Procedure in Pakistan 

The sales tax return filing procedure in Pakistan follows a standard timeline to ensure smooth operations. Under the Sales Tax Act, 1990, and recent updates in the Finance Act 2025, companies must adhere to these deadlines to avoid penalties. 

  • Annex C Submission: (By the 10th): This should contain information on invoices/credit/debit notes. 
  • Tax Due Date: Pay the tax by the 15th through bank pay over the counter or online. 
  • Whole return filing: By the 18th, submit the comprehensive return electronically. 

Additional annexes such as Annex-H1 (for stock statements) may be required for traders or specific sectors which can be prepared in excel tools for better reliability. The process also promotes electronic filing to cut down errors and delay in processing. 

 

How to File GST and Tax Returns Online? 

Companies use the digital ecosystem of FBR to file their GST and tax returns. First, visit the FBR website and sign in to IRIS. It allows you to file both sales tax (GST), as well as income tax returns. 

For income tax, companies do this annually by the 31st of December (they file for the fiscal year ending on June 30). This consists in profit and loss accounts, withholding taxes and any advance revenues paid. 

Tips for smooth online filing: 

  • Use secure internet and keep backups of documents. 
  • Check the calculations to take input credits with certainty. 
  • Stay updated on amendments, like those in the 2025 Finance Act, which may affect rates or procedures. 

 

GST Filing with CBM Consultants Expertise  

How tax and accounting firms are helping business owners to File GST and Tax Returns in Pakistan? They help in registration on FBR as well as correct preparation and hassle-free submission through IRIS portal. They analysis is supportive from compliance of Sales Tax return filing process in Pakistan to minimizing errors in GST Return Filing in Pakistan to providing effective tax planning advice. By outsourcing, firms can reduce time, prevent penalties and concentrate on growth while professionals take care of GST tax in Pakistan in all sense of GST tax terms.  

 

File Sales Tax Return: Common Challenges and Solutions 

Each business in Pakistan needs to periodically File Sales Tax Return to fulfil up the requirements of the Federal Board of Revenue (FBR). Although there is an easy way to file your return through online modes like the iris portal. But, businesses in Pakistan face several issues which may result in errors, penalties, and delays. Knowing these challenges helps businesses File GST and Tax Returns online seamlessly, with full confidence.  

Typical Sales Tax Return Filing Issues 

  • Errors in Tax Calculations: Common issues include incorrect input and output tax calculations.

Tip: Hire tax consultant agencies for accurate GST with-holding. 

  • Lack of Documentation: Businesses sometimes fail to keep invoices, tax challans, or purchase records.

Solution: Maintain organized file records for return filing and audit. 

  • Missing Deadlines: Late returns can lead to penalties, surcharges, or account suspension.

Key Solution: Request reminders or hire professional companies for filing. 

  • Technical Issues with Online Filing: File returns ahead of deadline to avoid last-minute problems. Refer to FBR helpline or tax consultant for further assistance.

 

Conclusion  

It is important for the companies from Pakistani to know how to file GST and tax returns in Pakistan. Also, by following the sales tax return filing steps in Pakistan and using online facilities, companies can easily do that. Remember, timely filing is not just an issue of penalties, it keeps a healthy cycle going in the financial ecosystem. So If you are businessmen then visit FBR portal today and check your registration status. 

How to Prepare for the Annual Tax Filing Deadline in Pakistan?

In Pakistan, it’s the duty of every person, firm or any association, to pay the tax in due time in the manner prescribed by the Government. Filing of the tax return is an annual requirement making you compliant with the provisions of the Income Tax Ordinance, 2001, to ensure no penalties and avail any financial advantages including exemptions and reduced rates of tax. This article offers you a comprehensive guide that you can follow on how to work your way through the filing of yearly tax return in Pakistan and have an efficient, and stress-free tax filing process to say the least. 

 

Why Annual Tax Filing Matters 

Filing tax returns on an annual basis in Pakistan is much more than a mere legal requirement. It’s a walk on the tightrope of financial transparency, self-respect, and a process that leads to the fulfillment of national goals, and it also enables citizens to benefit from loan approvals, visa processing, property transactions and so on. Not filing due taxes on time in Pakistan could result in fines, suspension from the List of Active Taxpayers (ATL) and/or limitations in financial transactions such as opening bank accounts or buying motor vehicles. Beat the problems and save time while you’re at it. By getting a head start on filing your income tax return.  

 

Key Deadlines for Annual Tax Filing 

Your taxpayer status determines the timing of your annual tax filing deadline: 

  • Individuals and AOP’s: The said due date will be on or before 30th September of the immediately next year following the tax year (For the tax year 1st July 2024 to 30th June 2025, 30th September 2025). A further extension of 15 days may be granted on an application, which shall be made to FBR. 
  • Companies: Corporations are required to report by automatic extension on December 31 of the following tax year or receive a 30-day automatic extension. 
  • Amended Returns: If you are required to file an amended return, you should file and amended due (corrected) copy of that return within 60 days after the due date of the original return. 

 

Steps to Prepare for Annual Tax Filing 

Understand tax obligations and file your Income Tax Returns wisely. The process for annual tax filing is mentioned as below: 

 

Eligibility and Documentation 

  • Annual income above PKR 600,000 (salaried) or PKR 400,000 (business/freelancers).
  • Certain property or car exceeding 1000cc.
  • National Tax Number (NTN) or carrying forward a business loss.
  • Business registered in Pakistan, regardless of income.

 

Required Documents 

  • Salaried Individuals: Certificate of tax deduction by employer (July 1, 2024, to June 30, 2025).
  • Business Owners/Freelancers: Income statements, balance sheets, tax certificates.
  • Property Income Earners: Deeds, lease agreements, bills.
  • Wealth Statement: Values of assets and liabilities to balance against income and expenses.

 

Registering through the Iris Portal of the FBR 

  • Go to FBR website (https://iris.fbr.gov.pk/) and select “e-Enrollment for Registered Persons”.
  • Complete registration process and receive an NTN.

 

Filling out the Income Tax Return Form 

  • Log in to Iris and click “Declaration” > “114(1) Return of Income Filed Voluntarily for 1 Year”.
  • Select the tax year (2025 for the income from July 1, 2024, to June 30, 2025).
  • Fill in income, deductions, and taxes withheld.
  • Fill the Wealth Statement to balance assets and liabilities.

 

Paying Any Outstanding Taxes 

  • Pay any residual in the prescribed ways.
  • Submit and verify your return using Iris.

 

Professional Income Tax Returns Services 

  • Third-party services like Ways Tax, TaxationPk, or Befiler can help with document preparation, filing, and obtaining the best deductions while adhering to FBR rules.

 

Consequences of Missing the Tax Filing Deadline 

If you miss deadline of annual tax filing, the consequences you face are mentioned as below: 

  • Penalties: PKR 1,000 for late filing by December 31; up to PKR 50,000 for businesses and PKR 10,000 for individuals. There is a daily fine of 0.1% of tax payable (minimum Rs5,000, maximum 25%). 
  • Default Surcharge: Accumulated interest at KIBOR + 3% per quarter for unpaid taxes etc. 
  • Loss of Benefits: Removal from the ATL, property sales and purchases, vehicle registrations, bank loans and overseas travel. 
  • Legal Action: Audit or simply legal investigation of non-compliancy by FBR. 

 

Annual Tax Filing by CBM Consultants: 

CBM Consultants assist in annual filing for tax return in Pakistan by combining the annual financial returns into the tax return, calculating the amount of tax payable and filing the application with the FBR and reducing the risk of penalties for late or wrong filling. Our experts help in accurate record keeping, tax credit or deduction claims, reconciliation of TDS, advice on tax slabs, and exemptions. We also assist with wealth statements, NTN handling, advance tax adjustment and represent in case of audit and notice from the Federal Board of Revenue (FBR), ensuring that your sharing process remains smooth with no hassles. 

 

 

Tips for Hassle-Free Annual Tax Filing 

Start Early: Start gathering your documents and preparing your return in July to avoid last-minute hassles. 

Keep Checking: Keep an eye on announcements of the FBR for tax slabs, forms, and deadlines changes. 

Use Iris Efficiently: You can also watch FBR’s video tutorials or query the Knowledge Base on post submission filing assistance. 

Double-Check: Always double check your income tax return form for inaccuracies before you submit it to avoid fines or audits. 

Claim Deductions: Add the deductions you can, such as donations to charity, medical expenses and business expenses, to lower your taxable income. 

 

Conclusion 

Understanding how to file taxes in Pakistan, you can fight the fear of tax filing methodologies in your country. By knowing what you need to do, having documents in order and using Iris on FBR’s web portal, you will be able to file your income tax returns correctly without a fuss. Whether you are a salaried person, freelance or an entrepreneur, with on-time annual filing, one can achieve financial transparency and get into the system to avail various benefits. If necessary, use tax returns services for professional help. Begin early, stay organized and file before the tax deadline in Pakistan to avoid penalties and set your future financial security in order.