Tax Year 2026: KTBA raises its concerns over income tax return form

KARACHI: Karachi Tax Bar Association (KTBA) has raised concerns on the income tax return form for Tax Year 2026.

In a letter sent to Zubair Bilal, Member, Inland Revenue-Operations, KTBA said the draft return form was circulated in May through SRO 835(I)/2026 for stakeholder input, and that the bar, among others, had submitted objections during the consultation period.

Despite the objections, FBR has not yet issued a final notification prescribing the form under the Income Tax Rules, 2002, even though the form has already gone live on IRIS for taxpayers, KTBA said.

The bar argued that making a form available for filing does not satisfy the legal requirement that it first be formally notified, and warned the gap could expose taxpayers to future disputes over the return’s status.

KTBA’s letter highlighted several functional problems being faced by the members.

These include the refund application facility not being activated for TY2026, no downloadable acknowledgement slip generated after filing, and no field to record advances paid against property purchases that were not completed within the tax year.

The letter also pointed to system restrictions preventing taxpayers from entering brought-forward capital when they have no current-year business income, incomplete carry-forward of prior-year wealth statement entries, and the absence of a bulk Excel upload option for data-heavy returns.

KTBA said the system rejects returns where partners’ profit-sharing percentages do not add up to exactly 100 percent, and does not allow updates to taxpayer profiles under Section 181.

Other issues highlighted include the system’s failure to let taxpayers claim tax collected under Section 235 on domestic electricity bills, a block on revising TY2026 returns despite the 60-day revision window allowed under Section 114(6), and minimum-tax fields under Section 148 that are neither auto-calculated nor manually editable.

The bar also said auto-fetched withholding tax figures under Section 153(1)(b) are showing incorrect amounts with no option to correct them.

KTBA additionally called for the manual entry of financial statement data to be made optional where taxpayers have already uploaded the file electronically, as required under sections 19DA and 114(2A), and proposed a guided questionnaire to help determine tax residency status under sections 82 to 84.

The association asked FBR to urgently issue the final notification for the TY2026 return form, fix the technical issues identified, and deploy a corrected version of the form, and said it remains available for further consultation.

Copyright Business Recorder, 2026