Don't wait until the last minute to file Tax Returns! Use coupon code EarlyBird on our store for 20% off on all of our services. Valid through July 31, 2026. Dismiss

Do you know?

Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. •

₨ 0

Do you know?

Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. •

How to File Withholding Tax Statements in Pakistan?

Learn about withholding tax statements in Pakistan: filing process on FBR IRIS, quarterly deadlines, tax payment rules, and penalties for late filing. Stay compliant.

Faiza Ehsan
January 1, 2024
Tax Toolkit

Understanding and complying with tax regulations is crucial for individuals and businesses operating in Pakistan. One important aspect of this is the filing of withholding tax statements. These statements, mandated under Section 165 of the Income Tax Ordinance, 2001, serve as a record of taxes deducted or withheld from various income sources before the recipient receives the payment. This comprehensive guide will walk you through the process of understanding, filing, and managing your withholding tax statement obligations in Pakistan.

What are Withholding Tax Statements?

Simply put, a withholding tax statement is a formal report submitted to the Federal Board of Revenue (FBR) detailing the amount of tax that has been deducted or withheld at the source from different types of income. This income can include:

Salaries: Taxes withheld from employee salaries.
Business Payments: Taxes deducted from payments made to contractors, suppliers, and other service providers.
Property Rentals: Taxes withheld from rental income.
Other Income Sources: As specified under the Income Tax Ordinance, 2001.

These statements are essential for the FBR to track tax collection and ensure that the correct amount of tax is being paid.

Step-by-Step Guide to Filing a Withholding Tax Statement

Filing your withholding tax statement is done electronically through the FBR’s online portal, IRIS. Here’s a detailed breakdown of the process:

Login to the FBR IRIS Portal:
- Access the IRIS portal by visiting the official FBR website.
- Log in using your unique FBR credentials (CNIC/NTN and password).
Navigate to Withholding/Advance Tax:
- Once logged in, locate the main menu on the IRIS dashboard.
- Click on the “Withholding/Advance Tax” tab.
Select Statement Type:
- Under the “Withholding/Advance Tax” section, you will find options to create a new statement.
- Choose the appropriate statement type based on your specific requirements. Common options include:
  - 165(1) (Biannual Withholding – Original): Typically used for original withholding tax statements filed on a biannual basis (though quarterly filing is now the norm).
  - 165(1) (Biannual Withholding – Revised): Used to submit a revised version of a previously filed biannual statement.
  - 149 (Annual Withholding – Original): Used for original withholding tax statements filed annually (for specific types of withholdings).
  - 165(1) Quarterly Withholding – Original): The most common type for regular withholding tax filers, submitted on a quarterly basis.
  - 165(2a) (Quarterly Withholding – Revised): Used to submit a revised version of a previously filed quarterly statement.
  - 165(7) (Annual Statement of Deductions Withholding Taxes): An annual summary statement for certain types of deductions.
  - Sales Tax – Withholding Agent: For entities acting as withholding agents for sales tax.
    Note: As per the current Income Tax Rules, you will generally need to file the “165(1) Quarterly Withholding – Original” statement for each quarter of the financial year.
Provide Information:
- After selecting the statement type, you will be prompted to enter the necessary details. This typically includes:
  - Tax Period: Specify the relevant quarter or period for which you are filing the statement.
  - Total Tax Withheld: Enter the total amount of tax withheld during the specified period.
  - Names of Taxpayers: Provide the names, CNICs/NTNs, and other required details of the individuals or entities from whom the tax was withheld, along with the specific amounts withheld from each.
Upload Documents:
- In some cases, you may be required to attach supporting documents, such as challans for tax deposits or detailed schedules of withheld amounts. The IRIS portal will guide you on whether any attachments are necessary for the statement type you have selected.
Submit Statement:
- Once you have entered all the required information and uploaded any necessary documents, carefully review the details for accuracy.
- After verification, click the “Submit” button to electronically file your withholding tax statement with the FBR. You will typically receive a confirmation message upon successful submission.

The Importance of Quarterly Filing

The current Income Tax Rules generally mandate the filing of withholding tax statements on a quarterly basis. This means you will need to submit the “165(1) Quarterly Withholding – Original” statement for each of the four quarters in a financial year. It’s crucial to be aware of the deadlines for each quarter to avoid penalties.

Filing Even When No Tax is Withheld

A critical point to remember is that withholding tax statements must be filed even if no tax was withheld during a particular period. This requirement ensures that the FBR has a complete and accurate record of all tax-related transactions. Filing a “NIL” statement in such cases is essential for compliance.

Revising Your Statement and Requesting Extensions

Mistakes can happen, and there might be instances where you need to revise a previously filed withholding tax statement. The FBR allows for revisions within 60 days of the original filing date. To revise a statement, you can typically select the corresponding “Revised” statement type (e.g., “165(1) Biannual Withholding – Revised” or “165(2a) Quarterly Withholding – Revised”) within the IRIS portal.

If you anticipate being unable to file your withholding tax statement by the due date, you can also request an extension. Both the revision and extension options are usually available under the “Applications” menu within the IRIS portal. It’s important to submit extension requests well in advance of the deadline.

Tax Collection and Payment Procedures

The timely payment of the withheld tax to the government treasury is just as important as filing the statement. The rules regarding the time of payment vary depending on the nature of the collecting entity:

Government Collection or Deduction: If the tax is collected or deducted by the Federal or Provincial Government, it must be remitted to the treasury within the same day.
Private Entity Collection or Deduction:
- Domestic Remittance: For taxes collected or deducted by private entities on domestic transactions, the amount must be remitted to the government treasury or deposited in an authorized bank within 15 days of the deduction.
- Foreign Remittance: For taxes deducted from payments made to non-residents, the remittance must be made abroad through the State Bank of Pakistan or another authorized banking company prior to sending the payment to the non-resident.

Penalties for Failure to Collect or Deduct Tax

In addition to being personally liable for the unpaid tax, there are specific penalties for failing to collect or deduct tax as required:

Default Surcharge: If a person fails to collect or deduct tax, and the recipient subsequently pays the tax, the person who failed to deduct will be liable to pay a default surcharge of 12% per annum calculated from the date of the failure to the date of payment.
Recovery from Recipient: The person who failed to collect or deduct tax retains the right to recover the amount from the recipient who ultimately paid the tax.

Penalties for Late Filing of Withholding Tax Statements

Timely filing of withholding tax statements is crucial to avoid penalties. The penalties for late filing are structured as follows:

Reduced Penalty: If the tax that was collected or withheld was paid on time, and the withholding tax statement is filed within 90 days of the due date, a reduced penalty of Rs. 5,000 will be imposed.
Default Penalty: In all other cases (where the tax was not paid on time or the statement is filed beyond 90 days), a penalty of Rs. 2,500 will be charged for each day of delay. However, there is a minimum penalty of Rs. 10,000.
No Tax Due: Even if it is determined that no tax was required to be deducted or collected during the relevant period, a minimum penalty of Rs. 10,000 will still be imposed for the late filing of the statement.

Federal Board of Revenue (FBR), is intensifying its focus on the digital economy with Section 165C of the Income Tax Ordinance, 2001. This new provision is designed to bring online sales and payments squarely into the tax net by mandating detailed reporting from digital platforms and payment facilitators.

Online Marketplaces and Digital Intermediaries Liable to File WHT Statements:

Finance Act 2025 inserts a new Section 165C which places reporting obligations on two key players:

Payment Intermediaries & Courier Services: Companies like online payment gateways and delivery services that deduct tax at source (withholding tax) must now file quarterly withholding statements. These statements will include crucial details such as the seller’s name, NTN/CNIC, transaction date, invoice number, total transaction value, and the amount of tax deducted.
Online Marketplaces: Platforms hosting multiple vendors (e.commerce websites) are required to submit monthly statements. These reports will identify every registered vendor by name, address, and tax registration numbers. They will also detail the volume of sales (turnover) and the amounts paid into each vendor’s bank account.

In essence, Section 165C is the government’s mechanism to ensure that as Pakistan’s digital economy flourishes, so does its contribution to the national exchequer, leading to a more documented and equeitable financial landscape.