When are you owed a refund?
A refund arises when tax was deducted from your salary, bank profit, contracts or other payments at a higher level than your final liability for the year. Common cases are freelancers whose foreign remittances were taxed at the bank, contractors who had tax deducted on every invoice, and people whose employer deducted more than the return finally shows.
How do you claim an income tax refund?
- File your income tax return for the year and make sure the deducted tax is shown and credited.
- Collect the withholding certificates or payment records that prove each deduction.
- Log in to IRIS and submit the refund application under section 170 for that tax year.
- Attach or keep the supporting records, and track the application in your IRIS account.
- Wait for the Commissioner's order. If tax is still owed for another year, the refund can be set off against it first.
One point trips people up: the refund is not claimed automatically just because the return shows an excess. A separate application is needed. Some websites say the return alone is enough. FBR's own circular on income tax refunds says a refund application is required.
How long does it take?
Section 170(4) tells the Commissioner to decide a refund application within 60 days. The Federal Tax Ombudsman has criticised FBR in cases where refunds took years, so it is realistic to expect delays. The best way to avoid them is a clean application: the return and the application should agree, and every deduction should have a certificate.
Why do refund claims get stuck?
- Missing or unclear withholding certificates
- The deducted tax does not appear in FBR's records because the payer never filed the withholding statement
- The return and the refund application show different figures
- The claim is for an old year and the records are hard to rebuild
- A defect in the account, such as a wrong bank detail, so the order cannot be paid
Do not wait years. Claims have time limits and old records are harder to prove.
What if FBR does not decide?
You can first write to the Commissioner and ask for the order. If the delay continues, a complaint to the Federal Tax Ombudsman is the usual next step, and the Ombudsman has directed FBR to pay delayed refunds before. If a notice has already arrived about your return, read how to reply to an FBR notice first.
Sales tax refunds are a different process
A sales tax refund usually comes from input tax that is higher than output tax, or from exporters. It follows sales tax rules and is checked closely by FBR, so it is slower and needs more paperwork. It is not the same application as an income tax refund. Your monthly returns need to be correct before any claim, see sales tax return filing in Pakistan.