Short answer: if your taxable income for Tax Year 2026 is above Rs 600,000, you must file. But income is only the first item on the list. Section 114 of the Income Tax Ordinance 2001 names many people who have to file even with low income, or no income at all: NTN holders, car and property owners, partners, freelancers taxed under the final tax regime, and every company without exception. This guide goes through the full list in plain words, with examples, so you can place yourself in about two minutes.
Key facts
- The general income threshold for individuals in TY 2026 is Rs 600,000 of taxable income.
- For business income, Section 114(1A) sets the filing bar lower, at Rs 300,000.
- Employer deduction under Section 149 does not remove the filing duty. Tax deducted and return filed are two separate obligations.
- Filing by the due date is what puts you on the Active Taxpayer List (ATL). For TY 2026 the due date of 30 September was extended to 31 October 2026.
- If you do not file, FBR can demand past years' returns under Section 114(4), charge a penalty under Section 182, and you keep paying non-filer withholding rates all year.
The Section 114 list, explained category by category
Section 114(1) is the master list. If you fall in even one category, a return is compulsory for you.
| Category in Section 114 | Who it catches, in plain words |
|---|---|
| Every company | All companies file, every year, whatever the income, even nil |
| Income above the tax-free limit | Any person whose taxable income exceeds Rs 600,000 in TY 2026 |
| Non-profit organizations | Every NPO registered under the Ordinance |
| Final tax regime income | Anyone whose income is taxed under final taxation, for example IT export proceeds under Section 154A, at any amount |
| Charged to tax before | Anyone charged to tax in either of the two preceding tax years |
| Loss carry-forward | Anyone claiming a loss to be carried forward |
| Property owners | Immovable property of 500 square yards or more, a flat of 2,000 square feet or more in a rating area, or any flat in municipal, cantonment or Islamabad areas |
| Vehicle owners | A motor vehicle with engine capacity above 1,000 CC |
| NTN holders | Anyone who has obtained a National Tax Number |
| Electricity connection | Holder of a commercial or industrial electricity connection with an annual bill above Rs 500,000 |
| Chamber and professional bodies | Resident persons registered with a chamber of commerce, trade or business association, market committee, or a professional body such as the Pakistan Engineering Council, the Pakistan Bar Council, ICAP or ICMAP |
| Foreign income and assets | Resident individuals who must file a foreign income and assets statement under Section 116A (foreign income of USD 10,000 or more, or foreign assets of USD 100,000 or more) |
| Notified classes | Any class of persons FBR notifies with the approval of the Minister in charge |
Two things in this list surprise people. First, the NTN line: once you have obtained an NTN, you are on the filing list every year, whether or not you earned anything. Second, the final tax line: a freelancer whose entire income is export proceeds taxed at source under Section 154A still has to file, even if the income is below Rs 600,000, because the law lists final-tax income separately.
Why "my employer already deducted my tax" does not free you
This is the most common misunderstanding among salaried people. Your employer's deduction under Section 149 settles the tax on your salary; it does not file your return. The return is your own annual statement of income, tax and wealth, and the obligation to submit it is personal.
So if your salary is above Rs 600,000, you file even when the employer's deduction was exact to the rupee and nothing further is payable. The return is also where you claim what the employer could not: tax credits, adjustable withholding suffered during the year (bank profit, cash withdrawals, vehicle and property transactions), and any refund that arises.
The lower bar for business income: Rs 300,000
Section 114(1A) adds a specific rule for business income: an individual whose income from business exceeds Rs 300,000 in a tax year is required to file. That is half the general threshold. A shopkeeper, trader or sole proprietor with business income of, say, Rs 350,000 owes no income tax, but the return is still compulsory. "No tax payable" and "no return required" are not the same thing.
Real situations: do I have to file?
My salary is Rs 550,000 and tax was deducted. Do I have to file?
Not on income alone; Rs 550,000 is below the Rs 600,000 threshold. But check the rest of the list before you relax: if you have obtained an NTN, own a car above 1,000 CC, or own property of the sizes above, you are required to file anyway. And if tax was deducted from you during the year despite the low income, filing a return is the only way to claim that money back as a refund. Many people below the threshold also file voluntarily to stay on the ATL and pay filer rates, which is usually worth more than the effort.
I am a freelancer paid from abroad. My income is under Rs 600,000
You have to file. Export proceeds taxed under Section 154A fall in the final tax regime category of Section 114, which carries its own filing obligation at any amount. Your return is also where your PRCs (Proceeds Realization Certificates) are reported, and it is the document banks and clients ask for when they verify you are a filer. The full process is covered in our freelancer tax return guide.
I am a partner in a firm but draw no salary
The firm (AOP) files one return at firm level. Your share of the firm's profit is exempt in your hands, but that exemption is about tax, not about filing. You are a separate person under the Ordinance, and as an NTN-holding partner you fall in the Section 114 list yourself. Partners file their own returns; this is also how your wealth statement stays consistent with the firm's books.
I am a student, or a housewife, with no income of my own
If none of the categories catch you (no NTN obtained, no vehicle above 1,000 CC, no property of the listed sizes, no business), there is no obligation to file. If a car or property is in your name, the obligation follows the ownership, not the income. Where there is genuinely no obligation, filing is still sometimes done voluntarily, for example for visa applications, bank financing or to build a documented financial history, but that is a choice, not a legal duty.
I am a non-resident with property or income in Pakistan
Non-residents file on Pakistan-source income: rent from property in Pakistan, capital gains on Pakistani assets, and other Pakistan-source amounts. The Section 114 categories apply on the same terms, so owning a 500 square yard plot or a vehicle above 1,000 CC in Pakistan puts you on the list even if you live abroad. Residency decides which income is taxed, it does not switch off the filing duty for Pakistani assets and income.
Companies, AOPs and non-profit organizations
Companies have no threshold and no exceptions: every company files a return for every tax year, including dormant and loss-making companies. AOPs file one return at firm level under their own rates, and each partner files separately as described above. Non-profit organizations are named in Section 114 themselves, so an NPO files even where its income is exempt.
What it costs you if you do not file
- A notice for past years. Under Section 114(4), FBR can require you to file returns for previous years, normally the last five, and up to ten in some cases. Ignoring the position does not close it; it usually surfaces later as a notice. If one has already arrived, our Section 114(4) notice guide explains how it is closed.
- Penalty under Section 182. Failure to file carries a penalty of 0.1% of the tax payable for each day of default, or Rs 1,000 per day, whichever is higher, with a minimum of Rs 10,000 where your income is mostly salary and Rs 50,000 in other cases. The missed deadline guide sets out the reductions for filing late voluntarily.
- You stay off the ATL. Filing by the due date is what places you on the Active Taxpayer List. Without it, withholding hits you at non-filer rates all year: bank profit at 40% instead of 20%, the 0.8% cash withdrawal tax under Section 231AB (which applies only to persons not on the ATL), and materially higher advance tax on property purchases and sales under Sections 236K and 236C. The full comparison is in our filer vs non-filer tax rates guide. For most salaried people, one year of excess withholding costs more than filing itself.
- Late restoration is no longer free. If the deadline passes, getting back on the ATL now requires the surcharge under Section 182A: Rs 25,000 for an individual. How it works is explained in our ATL surcharge guide.
Deadline for TY 2026
For individuals and AOPs the statutory due date is 30 September. For TY 2026, FBR extended it in two steps, and the current deadline is 31 October 2026. Companies with a June year end file by 31 December. Filing within the extended date counts as timely filing for ATL purposes, so the practical advice is simple: if you are on the Section 114 list and have not filed yet, file before 31 October and the surcharge and penalty discussion never starts.
How to file
You can file yourself on FBR's IRIS portal, or have the return prepared for you. TrueFiler's guided wizard walks through the same ground this article covers: it asks about your income under all heads, applies the withholding you have already suffered, reconciles your Section 116 wealth statement automatically, and produces a checked draft before anything is lodged on IRIS. Drafting and the full tax calculation are free; you pay only when you decide to file, at the current rates. If you are filing yourself for the first time, our step-by-step how to file guide takes you through IRIS screen by screen.
Frequently asked questions
Do I need to file if my salary is below Rs 600,000 and no tax is payable?
Not on income alone. You are required to file only if another Section 114 category catches you, such as an NTN, a vehicle above 1,000 CC, or property of the listed sizes. Filing voluntarily still has value: it keeps you on the ATL and lets you claim back any tax withheld during the year.
I have an NTN but no income at all. Do I still need to file?
Yes. Obtaining an NTN is itself one of the Section 114 categories, so the obligation continues each year. With no taxable income the return is a nil return, which is quick to file, and it keeps your ATL status and your record clean.
Last updated: October 19, 2026
Disclaimer: This article is general information about the filing obligation under the Income Tax Ordinance 2001 as amended up to the Finance Act 2026. It is not tax advice for your specific case. Thresholds and rates change with each Finance Act, so verify your position against the current law or ask a tax practitioner before filing.
Official references: Income Tax Ordinance 2001, Section 114 and Section 116A, Federal Board of Revenue (fbr.gov.pk); FBR IRIS portal (iris.fbr.gov.pk).