Adv Azam Saudagar

17/08/2026

FCC Verdict Summary: Adjustability of Tax Credit
u/s 168 Against Section 4C Super Tax.

​Core Issue:
The Federal Constitutional Court (FCC) specifically adjudicated whether tax collected/ deducted at source or paid in advance under Chapter X (giving rise to tax credits under Section 168) is adjustable against Super Tax liability determined under Section 4C of the Income Tax Ordinance, 2001.

​Interpretation of Section 4C(3): Section 4C(3) specifies that tax shall be paid, collected, and deposited per Section 137(1), and explicitly provides that "all provisions of Chapter X of the Ordinance shall apply."

​Rejection of FBR’s Stand:
The Court rejected the Federal Board of Revenue's (FBR) stance that Section 4C is an unadjusted standalone levy without credit set-offs. The FCC held that excluding Section 168 adjustments would render the statutory incorporation of Chapter X redundant, as Section 137(1) already handles procedural payment mechanics.

​Final Ruling:
The FCC ruled in favor of the taxpayer, holding that advance tax and withholding tax credits under Section 168 are legally adjustable against the tax liability computed under Section 4C.

13/07/2026

The FBR has issued new administrative instructions regarding the recovery of outstanding tax demands under Section 140 of the Income Tax Ordinance, 2001. Under the new rules, in any case where an ex parte order is passed against an individual taxpayer, the order must be served through both physical and electronic means. No recovery proceedings can be initiated until this service (either in-person or via affixture) is officially verified and the concerned Unit Officer certifies it, especially within Regional Tax Office (RTO) jurisdictions.

02/07/2026

The 2026–27 Fiscal Year has officially begun, and with it, new tax laws have been implemented.
Please note a significant update: the Active Taxpayer List (ATL) surcharge has been revised, increasing from Rs. 1,000 to Rs. 25,000.
Tax return filing for the 2026 tax year is now open. Ensure your compliance is up to date to avoid penalties.

30/06/2026

The Federal Board of Revenue (FBR) has clarified that Finance Act 2026 has not introduced any new powers allowing tax officials to recover taxes directly from taxpayers' bank accounts. According to senior officials, the existing recovery provisions have remained part of Pakistan's tax laws for approximately 50 years.

FBR explained that tax recovery from bank accounts follows a prescribed legal process under the Income Tax Ordinance, 2001. A demand notice is first issued under Section 137, after which taxpayers are provided 30 days to respond. Any recovery action under Section 140 requires multiple procedural steps and higher-level approvals.

This clarification comes amid discussions on social media regarding the Finance Act 2026. It highlights the importance of distinguishing between existing legal provisions and new legislative changes, particularly for taxpayers, businesses, and tax professionals.

Key Points:
• No new bank account recovery powers introduced under Finance Act 2026.
• Existing recovery provisions have been in tax laws for around 50 years.
• Taxpayers are given a 30-day notice before recovery proceedings.
• Recovery from bank accounts follows legal procedures and requires multiple approvals.

Disclaimer: Information presented is based on official statements, regulatory announcements, and publicly available sources. Details are subject to change as further information becomes available.

29/06/2026

50,000 penalty now for late sales tax return filing

27/06/2026

10/05/2026

28/04/2026

The Lahore High Court held that tax authorities cannot go beyond the scope of the show cause notice (SCN) while making assessments. In this case, the taxpayer was charged with sales suppression based on a difference between income tax and sales tax declarations. However, the Court observed that the authorities relied on assumptions without properly establishing that the alleged sales were taxable under the Sales Tax Act, 1990. It was further noted that the Appellate Tribunal failed to issue a reasoned (speaking) order as required by law. The Court emphasized that any new grounds or facts arising after the taxpayer’s reply must be addressed through a fresh or supplementary SCN; otherwise, it violates principles of natural justice. Since the authorities exceeded the SCN scope and the Tribunal passed a non-speaking order, the decision was declared legally unsustainable. Consequently, the case was decided in favor of the taxpayer and against the tax department.

18/04/2026

Tax on social media income ゚