Mohammed Ahsan & Co. Chartered Accountants

Some consequences of not filing show up in a tax bill. Others show up at the counter, when a transaction simply will not go through.

Section 114C of the Income Tax Ordinance restricts an "ineligible person," broadly someone who has not filed the preceding year's return with sufficient declared resources, from completing certain transactions above prescribed thresholds. A vehicle cannot be booked or registered. Property cannot be registered or transferred. An investment account cannot be opened. A bank cannot process a large cash withdrawal. Each of these sits with a third party, a dealer, a registrar, a bank, who is required to decline the transaction outright.

The return, in these cases, is not paperwork. It is the thing that makes the transaction possible.

Mohammed Ahsan & Co. · mahsanco.com

Holding a security for years is usually rewarded with a lower tax rate. That reward has a condition attached.

The First Schedule of the Income Tax Ordinance graduates capital gains tax on securities downward the longer they are held, reaching zero beyond six years. This benefit is available only to individuals and associations of persons appearing on the Active Taxpayers' List, on both the date of acquisition and the date of disposal. For those not on the list, the rate does not fall below 15%, no matter how long the security was held. Years of patience, in that case, buy nothing.

The holding period rewards patience. Filer status decides whether that patience counts.

Mohammed Ahsan & Co. · mahsanco.com

Most withholding provisions double for a person not on the Active Taxpayers' List. Motor vehicle transactions do not follow that general rule. They go further.

Under the Tenth Schedule of the Income Tax Ordinance, tax collected under Section 231B for a person not appearing on the Active Taxpayers' List is increased by two hundred percent of the standard rate, not the hundred percent increase that applies elsewhere. Of all the transaction-specific adjustments in the Schedule, this is among the steepest. It applies at the point of registration or transfer, ahead of any return being filed.

Some transactions carry the general cost of being off the list. This one carries triple.

Mohammed Ahsan & Co. · mahsanco.com

📢 EOBI Revised Monthly Contribution for ICT (Islamabad Capital Territory) effective w.e.f 01 July, 2026.

✅ Employee ConTribution = 1% of 40,700 = 407
✅ Employer Contribution = 5% of 40,700 = 2035
✅ Total Per person per Month = 2,442/=

August contribution will be paid with arrears of July.

Selling property carries its own tax consequence, separate from buying it, and filer status still decides the rate.

Under the Tenth Schedule of the Income Tax Ordinance, a person not appearing on the Active Taxpayers' List pays tax under Section 236C at 11.5% of the gross consideration received on the sale or transfer of immovable property. This is deducted at the point of sale, on the full transaction value, before any adjustment through a return. For sellers, the cost of being off the list is not deferred. It is collected the day the sale closes.

Two transactions, buying and selling, and filer status shapes both.

Mohammed Ahsan & Co. · mahsanco.com

Buying property is one of the few transactions where filer status is checked before the deal closes, not after.

Under the Tenth Schedule of the Income Tax Ordinance, a person not appearing on the Active Taxpayers' List pays tax under Section 236K at 10.5% where the property's fair market value is up to Rs. 50 million, 14.5% between Rs. 50 million and Rs. 100 million, and 18.5% above that. These rates sit well above what a person on the Active Taxpayers' List pays for the same purchase. For a transaction of this size, the difference is rarely a rounding error.

Filer status, in a property transaction, is priced in from the first rupee.

Mohammed Ahsan & Co. · mahsanco.com

Withholding tax is calculated on every payment a business receives. Being off the Active Taxpayers' List changes that calculation, not the payment itself.

Under Section 100BA and the Tenth Schedule of the Income Tax Ordinance, a person not appearing on the Active Taxpayers' List has tax deducted or collected at a rate increased by one hundred percent across most withholding provisions in the Ordinance. This applies at the point of payment, before any return is filed, on income the business has already earned. Certain specific transactions carry their own separate, steeper adjustments beyond this general rule.

The rate a business is paid at is decided well before the return is due.

Mohammed Ahsan & Co. · mahsanco.com

📢 FBR Introduces “Tajir Asan Registration” on IRIS

FBR has quietly added the Tajir Asan Registration tab on IRIS under the Tajir Dost Scheme.

But the TY 2026 Income Tax Return Form, launched for submission on 27 July 2026, is still facing technical issues.

👉 New facilities are welcome, but a smooth and fully functional IRIS system should be the first priority.

The penalty for a late return is not a flat fee. It accrues by the day.

Section 182 of the Income Tax Ordinance sets the penalty at the higher of 0.1% of the tax payable per day, or Rs. 1,000 per day, subject to a minimum and a maximum. Finance Act 2026 also clarified that "tax payable" for this calculation takes the higher of the current year's assessed tax or the highest tax paid in the preceding three years, which for many businesses raises the base the penalty is calculated on. Filing within one, two, or three months of the due date does reduce the amount owed, but the reduction only softens a number that was already growing.

The most predictable version of this cost is the one that never starts accruing.

Mohammed Ahsan & Co. · mahsanco.com

Independence is never accidental. It is the outcome of discipline sustained over generations the same discipline that allows institutions, businesses, and nations to endure.

At Mohammed Ahsan & Co., we see this principle daily in the businesses we serve: the ones that grow with integrity, keep their records honest, and build for the long term are the ones that last. That is not so different from what a nation requires of itself.

On this Independence Day, we reflect with gratitude on the country that gives our work its purpose, and on the responsibility that comes with serving it well.

Mohammed Ahsan & Co. · mahsanco.com