How to File Tax Returns for Service Providers in Pakistan?

Are you a doctor, lawyer, engineer, or any professional offering services in Pakistan? In this article, you’ll learn how to file your income tax return with the Federal Board of Revenue (FBR) in this simple, step-by-step guide.

Understanding Taxation for Service Providers

Service providers earn income by offering expertise rather than selling physical goods. Whether you’re a doctor diagnosing patients, an engineer providing technical solutions, or a lawyer offering legal advice, you must declare your earnings and file taxes to comply with Pakistani tax laws.

This guide simplifies the tax filing process, ensuring you can confidently file your income tax return without unnecessary stress.

Step 1: Logging into the FBR Website

1. Visit the FBR website.
2. Click on the Declaration tab within the Income Tax Returns System (IRS).
3. Enter your CNIC (Registration Number) and password to log in.

Once logged in, you are ready to file your tax return.

Step 2: Filing Your Tax Return (Normal Return)

1. Select “Normal Tax Return” from the dashboard.
2. Choose the tax period (for the current year, select 2024: covering July 1, 2023 – June 30, 2024). or selection 2025: covering July 1, 2024 – June 30, 2025.
3. Click Continue to proceed.

Step 3: Declaring Your Income

1. Open the tax return form and go to the Business section.
2. Select “Other Revenue” and then choose “Fee for Technical and Professional Services” or “Others” for broader service types.
3. Enter your total income earned during the tax year (e.g., PKR 800,000).

The system will calculate your taxable amount accordingly.

Step 4: Deducting Business Expenses

To ensure accurate tax calculation, service providers must account for business-related expenses.

Go to the “Business” section and select “Management, Administration, Selling, and Financial Expenses.”

Declare common expenses such as:

• Rent: If you operate from a rented space.
• Salaries: Wages paid to employees or assistants.
• Utilities: Electricity, internet, and phone bills.
• Office Expenses: Equipment, stationery, and maintenance costs.
• Other Indirect Expenses: Any additional business-related costs.

By detailing your expenses, you lower your taxable income and reduce your tax burden.

Step 5: Tax Calculation and Payment

1. The system will automatically calculate your taxable income after deductions.
2. Generate a Payment Slip ID (PSID) and pay your tax through a bank or online payment system.
3. If you’ve already paid certain taxes (e.g., withholding tax on mobile bills), you can adjust them against your final tax liability.

Step 6: Declaring Business Assets

Navigate to Business Assets under the Business section.

Declare capital assets such as:

• Office Space: Owned property used for work.
• Furniture & Equipment: Items like office desks, law books, medical instruments, etc.

Step 7: Completing Your Wealth Statement

Declare Personal Expenses:

House rent, travel costs, vehicle maintenance, and utility bills.

Declare Personal Assets:

• Property: Residential, commercial, or agricultural properties.
• Bank Accounts: IBAN, bank details, and cash balance.
• Vehicles: Car ownership details.
• Valuables: Any high-value possessions.

This ensures that your income, assets, and expenses are aligned for transparency and compliance.

Step 8: Final Submission

1. Review all the information carefully.
2. Click Submit and enter your PIN.
3. If you forget your PIN, use the Change PIN option.

Important Considerations

• Stay Updated: Check the FBR Website for the latest tax regulations.
• Seek Professional Advice: If unsure, consult a tax expert.
• Ensure Accuracy: Incorrect filings may lead to penalties.

Conclusion

Filing your tax return as a service provider is essential for compliance with Pakistani tax laws. By following this step-by-step guide, you can efficiently declare your income, deduct expenses, and complete your tax filing with ease. Take the time to understand the process, seek professional help if needed, and stay compliant with tax regulations.

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