In Pakistan, individuals and businesses are required to file income tax returns if their income exceeds a certain threshold. The exact threshold at which a person or business is required to file an income tax return depends on the nature of the income and the type of taxpayer.
For individuals, the income tax threshold is PKR 600,000 per year. This means that individuals whose taxable income (income after deductions and exemptions) exceeds PKR 600,000 per year are required to file an income tax return.
For businesses, the income tax threshold is PKR 1.2 million (approximately $7,500) per year for companies and PKR 500,000 (approximately $3,100) per year for other types of businesses (e.g., partnerships, sole proprietorships). This means that businesses whose taxable income exceeds these thresholds are required to file an income tax return.
In addition to the income threshold, there are other circumstances in which a person or business may be required to file an income tax return in Pakistan, even if their income does not exceed the threshold. These circumstances include:
- If the person or business has received a notice from the Federal Board of Revenue (FBR) requiring them to file an income tax return
- If the person or business is a salaried individual and has received salary income from more than one employer during the tax year
- If the person or business has received a refund of tax in the previous tax year
- If the person or business has made a loss in the previous tax year
It is important to note that even if a person or business is not required to file an income tax return, they may still choose to do so in order to claim credits or deductions that they are entitled to.