FBR tells tax offices to stop advance income tax notices to salary-only taxpayers

The Federal Board of Revenue has told its tax officials to stop sending advance income tax notices to salaried people whose only income is their salary, ARY News reported on Saturday, citing sources. The instruction came from FBR chairman Rashid Mahmood Langrial, ARY News reported. Salaried taxpayers across the country had been receiving notices asking them to deposit advance income tax every quarter, on top of the tax their employer already deducts from their pay each month.

The FBR has not yet published a circular or press release on the instruction, and the report does not cite a section of the Income Tax Ordinance. We will add the official text here when it appears.

Who the change covers

• Covered: people who live on a salary alone. Their tax is already deducted at source by the employer every month, so the quarterly demands no longer apply to them, the report said.
• Not covered: salaried people who also earn from other sources, such as rent, a business, freelance work or profit. They may still have to pay adjustable advance tax under the normal rules.
• Already paid: advance tax collected from people who are now covered will be adjusted against their tax liability under the relevant provisions, so it is not lost.

Why it matters

Salaried workers are among the most compliant taxpayers in Pakistan because their tax is taken before they are paid. Former finance minister Asad Umar, in remarks carried in the same ARY report, said the salaried class paid more than Rs 600 billion in tax last year, ARY News reported in the same story; that is his figure, not an FBR one. Notices to people who have no other income have drawn complaints before: in January 2025, Profit reported that tax offices were sending salaried employees show-cause notices asking them to prove deposits their employers had made, which tax experts called unlawful, since recovery for a wrong deduction lies against the employer (Profit).

What to do if you get a notice

1. Check your salary certificate (the annual tax deduction certificate from your employer) and your tax deductions on IRIS. That shows the tax already paid.
2. Reply in writing through IRIS, stating that salary is your only income and attaching the certificate. Keep a copy.
3. If you have other income, work out what you owe on it rather than ignoring the notice.
4. Run your numbers with our income tax calculator and salary take-home calculator for 2026-27, which show the monthly deduction your employer should be making.

If a notice arrives after this instruction, it is worth pointing the tax office to it in your reply, and keeping proof of the date you received the notice.