Pakistan Tax

NTN - What is an NTN and How to check NTN Number?

What is an NTN?

NTN is an abbreviation of National Tax Number. NTN is obtained for income tax purposes by registering as a taxpayer. An NTN can be obtained from the FBR (Federal Board of Revenue. An individual, a company, and an association of persons (AOP) or foreign nationals shall be treated as registered when they are re-enrolled with the FBR.

FBR’s e-Enrollment program provides you with a National Tax Number (NTN) and password. Taxpayers can use their 13-digit Computerized National Identity Card (CNIC) as their Income Tax t Registration Number. The CNIC number is also the Login ID of the taxpayers. After e-enrollment, the NTN received by AOP and Company is the 7-digit Registration Number.

Using these credentials, an online income tax return may be filed through the IRIS portal, the online Income Tax system.

Who is eligible to file an Income Tax Return?

To be eligible to file tax returns to the FBR in Pakistan, you have to be a Pakistani citizen. However, if you are a non-resident Pakistani and earn income in Pakistan, then you have to pay tax on your income. Similarly, if you are a non-resident Pakistani and earn income outside Pakistan, then you have to pay tax on your income, if not paying in any other country.

Who are Non-Filers?

Income Tax non-filers are taxpayers in Pakistan who have failed to file their tax returns on time. The Pakistan Income Tax Ordinance 2001 (ITO2001) makes it mandatory for every citizen and foreign national earning income over Rs. 400,000 (in the case of an employed person, Rs. 600,000) in Pakistan to file an income tax return with the Federal Board of Revenue(FBR), before the filing due date, which is June 30th of each year. In order to ensure that all those required to file a tax return declare their taxable incomes, FBR has the right to seek information from any person or entity, whether individual or business. Thus, all those, who have got their NTN, or who have earned a taxable income but failed to file their Income Tax Returns, are considered Non-Filers.

Income Tax Return Filing

Anyone working as an employee or doing business or earning from any other source is subject to income tax, which is a tax on income earned inside the country.

Income tax returns are primarily based on the following items of income:

  • The salaries of local and foreign employees both inside and outside Pakistan
  • Capital gains on the sale of properties and investments held within Pakistan (stocks, bonds, etc.)

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Last date for Income Tax Return Filing

The last date for filing an income tax return is 30th September of the subsequent year (for example, the last date of filing a tax return for TY 2021 was 30th June 2021). If you fail to file a tax return till the due date, you will have to pay a penalty which is the half percent of tax payable per month until the filing is completed but not more than Rs. 20,000 in total.

You can file your income tax returns either manually through the FBR office or electronically through their website. The instructions and requirements differ based on various criteria such as whether an individual has been notified or not by FBR, whether an individual has been audited in previous financial years etc.

Annual Audit

All the registered taxpayer companies’ accounts are also audited annually. Taxpayers’ companies should submit a report of their audit to the income tax commissioner annually. The audit includes an overview of all the financial statements, financial statements, balance sheets, consolidated and combined financial statements, cash flow statements, and many other things which will be required by the FBR. Audited accounts must be filed with FBR within six months after closing the account books of companies.

If you receive any notice from FBR regarding your annual revenue or income tax return filing, you must respond to them as soon as possible to avoid any kind of penalty and legal action against your business or company. If you have any problem in responding to such a notice, then contact us for help.

Summary of: NTN, Non-resident Pakistani, Non-filers, Annual Income Tax Returns Filing, Annual Audit, and other important income tax information.
  • National Tax Number (NTN) is required for all resident individuals and AOPs, who are liable to pay income tax on their taxable income. Resident refers to any individual who is present in Pakistan for a period exceeding 182 days during the tax year.
  • Non-resident Pakistanis are also required to file income tax returns if any income accrues or arises or is deemed to accrue or arise in Pakistan.
  • Non-filers are required to file income tax returns if total assets owned by them exceed the threshold limit determined by FBR from time to time. The assets, which need to be considered for this purpose include fixed assets like land, building, plants, and machinery, etc., movable assets such as shares, bank deposits, vehicles, etc., annual expenses over Rs 0.5 million per annum including rent paid, utility expenses paid, etc., investment in accounts of the spouse or minor child(s) where the spouse/minor is a non-filer.
  • Income Tax Return filing is mandatory for all persons liable to pay Income Tax, even if they do not have any taxable revenue during the tax year under consideration.