ISLAMABAD: The Federal Board of Revenue (FBR) will conduct electronic scrutiny of income tax returns filed for tax year 2026 through an automated Computerised Risk Management (CRM) system, allowing taxpayers to clarify discrepancies and correct errors before any legal or penal action is initiated.
The FBR has issued SRO 2098(I)/2026 to amend Income Tax Rules, 2002, through insertion of a new Rule 38B, titled “Procedure for electronic scrutiny and intimation of issues detected by the automated system.”
Under the newly inserted rule, an automated system will process income tax returns furnished by taxpayers under sub-section (2A) of Section 120 of the Income Tax Ordinance, 2001.
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According to the amended rules, the system may issue online advice or advance intimation through IRIS, identifying factual or legal mistakes and discrepancies in income tax returns. The mechanism aims to give taxpayers an opportunity to explain the issues, rectify errors, or take other corrective measures before any legal or penal action is initiated.
The rules further provide that advance intimations identifying discrepancies generated through the system may also be issued by the Officer of Inland Revenue having jurisdiction over the taxpayer.
The FBR has prescribed a minimum response period of seven days for taxpayers to explain, rectify, or take corrective action regarding discrepancies identified through the automated system.
In case a taxpayer fails to respond within the stipulated period, the system will issue a reminder, which will also provide a period of not less than seven days for response.
The new mechanism also requires that records of discrepancies detected, intimations issued to taxpayers, and responses received, if any, be communicated to the Officer of Inland Revenue having jurisdiction over the taxpayer.
Furthermore, all intimations issued to taxpayers, their responses, and subsequent actions taken will be recorded in a dedicated dashboard developed under the automated system.
The FBR has also provided that the automated scrutiny, analysis and cross-matching of available data, identification of discrepancies and electronic communication with taxpayers will be implemented through a Change Request Form (CRF) to ensure smooth and efficient operation of the system.
The concerned Officer of Inland Revenue will examine the taxpayer’s response, or absence thereof, and take appropriate action, where required, under the relevant provisions of the Income Tax Ordinance, 2001, and rules made there under.
Copyright Business Recorder, 2026