FBR Late Filing Penalty 2025 When It Applies and How to Avoid It: If you have not filed your tax return yet and want to know how much penalty is charged for delay, how this penalty is paid, how the FBR collects it and how you can reduce it.
Last date for filing return
As everyone knows, the last date for filing return for individual taxpayers (Individuals / AOPs) is October 31, while for the Companies the last date is December 31.
Individuals who have filed their returns on time will remain on the Active Taxpayer List (ATL) and retain filer status until September 30, 2026.
But for those who have neither filed a return nor have taken an extension a penalty will now be applicable as per the law.
FBR Late Filing Penalty 2025 When It Applies
The FBR cannot levied a fine on anyone who has filed a return late or has not yet filed it. Two basic conditions are necessary for imposing a penalty:
Wilful Default:
According to the law, a fine can be imposed only if it is proven that the taxpayer filed the return late intentionally or knowingly. If someone has delayed due to ignorance, omission or technical reason, then a fine cannot be imposed on him. The FBR has to prove that the delay was intentional.
This principle applies mostly to large businesses or companies that have been filing returns regularly for years and are aware of the law.
Revenue Loss to the Government:
If the government has suffered any financial loss due to late filing of the return, then a fine can be levied.
For example, salaried individuals have their taxes already deducted, so filing their returns late does not cause any loss to the government, so they are generally not penalized.
However, if someone’s tax is payable and they do not pay it on time, then a fine may be charged.
In the past, the FBR has rarely imposed penalties on ordinary taxpayers, but since a large number of people in the country do not file returns, it is likely that the FBR may imposed fines so that next time they file returns on time.
FBR Late Filing Penalty 2025 : Case Laws
2013 PTD 387
Where there is no Tax payable in retrun section 182 is not applicable
ITA NO 2710/LB/2019
182 can not be invoked when no loss of revenue
How to Calculate Penalty On Late or Non-Filing of Tax Returns?
If the return is filed late, then the penalty is payable as per the following formula:
(a) 0.1% of the tax payable for each day until the return is furnished; or
(b) one thousand rupees for each day.
For example, if your tax was Rs. 1,00,000 and you filed the return 30 days later,
then the calculation will be as follows:
1,00,000 × 0.001 × 30 = Rs. 3,000
1,000 × 30 = Rs. 30,000
Since the higher amount is 30,000 so that will be plenty.
Minimum Penalty
However, if the calculated penalty is less than the prescribed minimum limit, the following minimum amount shall be payable:
If the income is in the form of salary, the minimum fine shall be Rs. 10,000.
If the income is from business, rent or other sources, the minimum amount shall be Rs. 50,000. That is, even if you file late for a day, the fine shall not be less than that.
Maximum Limit
Similarly, a maximum limit of a fine that can be levied has also fixed. For example, based on the above formula if a person does not file a tax return for a whole year, the fine will be 365,000 (365 × 1,000).
If the period of non-filing increases further, the penalty will also increase in the same proportion.
To avoid this situation, the law has fixed a maximum limit of the penalty, which cannot exceed 200 percent of the tax payable by the taxpayer in any fiscal year.
For example, if a person’s annual tax liability is Rs. 150,000, the fine cannot exceed 200 percent of the tax payable, i.e. Rs. 300,000 (150,000 × 200%).
Is Penalty Can Be Reduce or Any Discount Available?
How Much Is the FBR Penalty for Late Tax Return in 2025 When It Applies and Proven Ways to Reduce It.
if the return is filed after the due date within the following period, the penalty shall be waived off:
75% reduction for filing within one month
50% reduction for filing within two months
25% reduction for filing within three months
FBR Late Filing Penalty 2025 When is to be paid?
The penalty does not have to be paid immediately when filing the return.
In practise The tax officer of the RTO first issues a show cause notice to the taxpayer to explain why had not file their tax returns on time as a penalty cannot be imposed without giving you an opportunity to be heard.
This is a subjective matter not every person is subject to a penalty, but each case is decided according to its specific circumstances and the officer has the authority to waive off the fine.
Final Thoughts:
If you haven’t filed your tax return yet, file it immediately without delay, and if you want to learn more about FBR Late Filing Penalty 2025 When It Applies and How to Avoid It, please contact us through our website by filling out the Contact Us form, or reach out via our social media accounts.
