A. BACKGROUND: (1) TLQC 3800 of 30.10.26 about ITR TY 2026: Tax Offices open till 8pm on 31.10.26 and KC Views as to 2.11.26 deadline (2) TLQC 3773 of 13.10.26 about ITR TY 2026: Requests for Extension till 2.12.26 by PTBA (2) - in trail, blue, italic and double Line (2) Other relevant TLQCs are in para VII.

B. EXECUTIVE SUMMARY

1. In our considered views, due date is 2.11.26 - TLQC 3800 of 30.10.26 refers, as covered in Business Recorder of 31.10.26 as to Asif Kasbati Views (Attachment 3801.1)

Asif Kasbati views as to Income Tax return filing due date is 2.11.26 & not 31.10.26; and PTBA urges for 34 days extension due to Rule 34A - BR 31.10.26

2. Owing to matters in Background read with para VII (as we are constantly covering important matters in our Commentaries) and over 32 reasons (as partly covered Business Recorder of 28.9.26 as well Attachment 1282.1) in ensuring paragraphs, based on our over 34 years’ core tax experience, we are of the considered view that extension atleast till 13.11.26 is inevitable via Circular, ISA (or in worst scenario specific extension upto 13.11.26) also in 31.10.26 Income tax returns: PTBA urges FBR to grant a further 34-day extension (Attachment 3801.2)

3. We appreciate PTBA, KTBA, LTBA & Other bars in highlighting Glitches in Return Forms & IRIS issues, FBR & PRAL cooperation was then led to the resolution of several matters, however, certain matters are still outstanding as well as taking the matter to FTO (where the matter is in progress), as covered in our TLQC too (Para A refers)

4. Hence, Professionals may work hard (like our 786 Tax team too), however, no need to feel pressure but take care of yours & team Health.  

(I)   RETURN FILING DEADLINE

As per section 118, (a) Individuals & Associations of Persons having year from 1.7.25 to 30.6.26 and (b) Companies having any of the year-ends between 1.1.25 to 31.12.25 are required to file TY 2026 Return on or before 30.9.26 as per law, however, extension was allowed till 15.10.26 vide Circular 3 of 30.9.26 (TLQC 3761 of 1.10.26 refers) and upto 31.10.26 effectively till vide circular 2.11.26 (TLQC 3778 of 16.10.26 refers).

(II)   EXPECTED EXTENSION REASONS

Based on over 34 years’ post CA core tax experience, we understand that General Extension is likely to be allowed at least till Friday 13.11.26 (or 13 to 15 days Specific Extension in worst scenario) owing to the following 32+ reasons; however, refer to Timely Filing and Extension Paras as well: 

1. FBR missed Draft return SRO deadline (other than Traders)

FBR missed deadlines for issuing more detailed draft 4 returns forms vide SRO 835 of May 7, 2026 for Individuals, SME, AOPs and Companies for Tax Year 2026 (TLQC 3511 of 9.5.26 refers) consist 147 pages and sought feedback from taxpayers. Considering Rule 34A(2), the draft was late by over 7 months. TY 2025 return was simpler and its draft was issued vide  SRO 1212 (TLQC3195 of 10.7.25 refers) of 89 pages only.

2. FBR missed Final Return SRO deadline & more detailed forms than LY (other than Small Traders)

The 4 final returns Final forms were issued vide SRO 1495 dated September 2, 2026 (TLQC3714 of 7.9.26 refers) consisting of 111 pages. As per Rule 34A, it was required to be issued by 31.1.26. Hence, delayed by over 7 months.

3. Delayed Small Shopkeepers / Traders return draft form

Regarding Small Shopkeeper the Returns, SRO 1109 dated 14.7.26 was issued as Draft SRO Special Procedure for Small Shopkeepers / Small Retailers (TLQC 3620 of 16.7.26 refers) inter alia covering Special Procedure Applicability, Exclusions, Registration, Voluntary Nature, Tax Rate, Minimum Tax under this Special Procedure, Audit, Return Filing, Withholding & Other Provisions and Draft form was also delayed.

4. Delayed Final Small Traders Final Form

The final return of small traders was issued as cover in our TLQC 3644 of 29.7.26 refers. We understand that the return is incomplete and PTBA is in touch with FBR and PRAL to complete the same.

5. Delayed Draft SRO to save Individuals from late filing Penalty and No Final SRO

5.1 In order save individual from late filing penalty for ATL for Tax Year 2026, delayed SRO 1691 as to Draft rules for consideration of amendment proposed in Rule 81B and First Schedule of ITR, 2002 has only been issued on 6.10.26 and its final version is yet to be released. The draft has been issued in exercise of the powers conferred by sub-section (1) of section 237 of ITO, 2001 read with sub-section (3) of section 182A. 

5.2 As per the draft Rule 81B (2B) Notwithstanding sub-rule (2A), where an individual files a return of income for the latest tax year after the due date or extended due date and furnishes, through IRIS, an undertaking under sub-section (3) of section 182A in Form ATL-U set out in Part XV of the First Schedule, his name shall be included in the Active Taxpayers' List without payment of the surcharge specified in the proviso to clause (a) of sub-section (1) of section 182A. While (2C) read as The six-month period referred to in sub-section (3) of section 182A shall commence on the date shown on the electronic acknowledgement issued by IRIS on successful furnishing of Form ATL-U followed by sub-rule (2D) and Form

5.3 For inclusion in active taxpayer list, where income tax return is not filed within due date, Finance Act 2026 enhanced the surcharge payable to Rs 25,000 from Rs 1,000 and no surcharge required if undertaking is given:

6. FBR Policy & IRIS Issues (18 issues including in Bars’ letters - TLQC 3777 of 13.10.26)

a.   Delayed SRO lead to delayed return on IRIS

b.   IRIS was either not working at all OR very slow for certain days in September & October 2026.

c.   IRIS is likely to be working very slowly on 15.10.26 evening as the Taxpayers face this issue almost every year; as we understand that IT speed system issues are still not fully resolved.

d.   Tax Credit on Donations Against Super Tax

e.   Wealth Statement Incorrectly Required from a Non-Resident Member of an AOP

f.    Inability to file revised return under section 114(6) of the Ordinance

g.   Non-Availability of Separate Foreign Wealth and Foreign Income Statements under Section 116A

i.    Incorrect Opening Balances Following Revision of Tax Year 2025 Wealth Statements

j.    Non-Availability of Returns Filed under the Small Traders Scheme

k.   Pending Extension Applications Remaining in the IRIS Outbox

l.    Minimum Tax under Section 153

m. Unlawful Restriction on Adjustment of Prior Years’ Tax Refunds

n.   Non-Availability of Refund Application for Tax Year 2026

o.   Absence of a Downloadable Filing Acknowledgement

p.   Non-Acceptance of XLSX Financial Statements Contrary to Statutory Requirements

q.   Inaccessibility of Transitional and Special Tax Year Returns

r.    Inability to Report Negative Balances on IRIS

s.   Impracticable Mandatory Disclosure of Shareholder Particulars

7. Rain, Electricity & Internet issues

The Torrential rains in certain areas disrupted office work, electricity failure, no or slowed internet speed and caused severe cash flow issues, despite government claims of digitization & economic improvement.

8. KPK disturbances & emergency

Disturbance in Islamabad and there was Clouse of KPK several areas due to PTI protest and Emergency announcement thereafter.

9. Parliamentarian Directories

PAFO has written letter to Finance Minister to direct FBR to publish Parliamentarian Directory for TYs 2020 to 2025 and cover in Business Recorder of PAFO demands release of tax directories of parliamentarians (TLQC 3758 of 28.9.26 in trail refers). PAFO has also written letter for the same for the TY 2026 as well.

This is Important to show that Govt not only ask Public to file returns on time but also ensure that the Parliamentarians become good example that have already filed return.

10. Tax Years 2023 VS TY 2024 & TY 2025 and Issue as to TY 2025 cum TY 2026

10.1 Table

10.2 ATL at about 4 Million on 21.9.26, which we indicated to be system error, as it has TY 2025 (as well as TY 2026 as our 786Tax Team checked) return filers, hence, it should be more than 9 million. The matters was then corrected when we checked on 13.10.26 as evident from the above.

10.3 On 30.10.26 the ATL is at Rs 10,159,019M now compared as 1 year VS 2 years plus seems to be some errors; as it should be more if we consider filing 5 million TY 2026 return in addition to over 8.5 million TY 2025 returns.

11. Return expected Quantity

11.1 Broadening of Tax Base as per Advisor to FM: Advisor to Finance Minister Mr Khurram Shahzad speech at ICAP Post Budget Conference 2026 wherein he stated there will be 3.5 million into tax net. 

11.2 Earlier Govt: Former FM Mr Shaukat Tarin had stated there were 15 million non-filers, while former special assistant to the PM Dr Waqar Masood had mentioned 7.4 million.

11.3 Expected Extension Taxpayer & ATL as per KC: A minimum of 12 million returns should be filed for TYs 2026, compared with 8.5 million taxpayers on the ATL as of 1.8.26 plus 3.5 New Shopkeepers as per Govt However if we deduct 8.457M relating TY 2025 figure, the TY 2026 works out to 1.6M but see para 12.1 for difference of 4.6M.

12. Return filed Quantity

12.1 FBR received record 7.5m income tax returns till 30.10.26 - BR as per FBR claim, out of expected 12M (non-traders 8.5 M return  plus 3.5 M Treaders). However, in our view considering in ATL of 30.10.26 VS TY 2026 is 1.6M (refer to para 11.3).

12.2 The current filing by Traders is likely to be less than 100,000 (in KC views) though Govt is expecting 3.5 million.

KC suggest FBR that NTN holders as well as for Broadening Tax Base, FBR should be given an opportunity to file their returns during an extended period of atleast till 13.11.26, which the FBR may announce on 31 October, afternoon to avoid millions of extension applications.

13. Non-Compliance issues

13.1 Based on our over 34 years’ post CA pure tax experience, we anticipate less than 60% would have been filed, even if keep the bench mark of 8.5 million of TY 2024 plus 3.5M Trader means 12 M in all. In line of its proper disclosure and declaration, the remaining time is not sufficient for the tax filers to arrange their payment of tax and file their proper and correct declarations even though 90% of the demand has already been paid by the tax filers by way of withholding taxes and advance taxes.

13.2 Considering the aforesaid circumstances, we strongly acknowledge the contributions of the tax filers whose names are appearing in the latest ATL or earlier ATL by giving them relief if by any chance they are unable to file their tax returns before the extended deadline of filing i.e. 31.10.26 (or effectively 2.11.26).

13.4 We are of the view the aforesaid granting one month extension will enhance the tax filers confidence on the Government, reduce the trust deficit and they will reiterate their commitment to Pakistan by paying their due shares of taxes, even at the cost of their depleting financial health OR atleast allow extension till 13.11.26.

14 Extension requests from various quarters

14.1 Owing to several reasons, PTBA, KTBA, LTBA & other Bar have applied for extension for 3 months post resolution of all issues till 2.12.26.

14.2 Moreover, certain Trade bodies have also already applied for similar extension.

14.3 We expect more applications from several Bars, PAFO, Trade & Industry Bodies, too shortly.

14.4 FTO Interim order as explained in TLQC 3797 of 29.10.26 about ITR TY 2026: Hearing before FTO for Extension till 2.12.26, etc by PTBA & related matters as per LTBA etc Complaint covered in TLQC 3793 of 28.10.26.

15. Ease of Doing Business

Extending the deadline to 2.12.26 OR atleast 13.10.26, for those unable to file by 31.10.26 owing any of 32+ issues any other reasons. This would enhance taxpayers’ confidence on the government, reduce the trust deficit and indication of Ease of doing Business.

III. TIMELY FILING

Having stated above, in order to avoid any Default Surcharge, Penalty & Notices, we recommend you submit your Income Tax Return as soon as possible by 31.10.26 or latest by 2.11.26, however, without taking stress.

IV. EXTENSION APPLICATION

If your Goodself could not file a return by 31.10.26 / 2.11.26 we recommend to be ready with extension application and if not extension circular be received by COD or extended COB of your office, by submitting an online extension application with applicable reason from this TLQC and keeping in view Section 119 which is reproduced below for ready reference:

119. Extension of time for furnishing returns and other documents.—(1) A person required to furnish —

(a) a return of income under section 114 or 117;

(b) & (c) Omitted

(d) a wealth statement under section 116, may apply, in writing, to the Commissioner for an extension of time to furnish the return, or statement, as the case may be.

(2) An application under sub-section (1) shall be made by the due date for furnishing the return of income, statement to which the application relates.

(3) Where an application has been made under sub-section (1) and the Commissioner is satisfied that the applicant is unable to furnish the return of income, statement to which the application relates by the due date because of —

(a) absence from Pakistan; 

(b) sickness or other misadventure; or

(c) any other reasonable cause, the Commissioner may, by order, in writing, grant the applicant an extension of time for furnishing the return, or statement, as the case may be.

(4) An extension of time under sub-section (3) should not exceed fifteen days from the due date for furnishing the return of income, employer’s certificate, or statement, as the case may be, unless there are exceptional circumstances justifying a longer extension of time:

Provided that where the Commissioner has not granted extension for furnishing return under sub-section (3) or sub-section (4), the Chief Commissioner may on an application made by the taxpayer for extension or further extension, as the case may be, grant extension or further extension for a period not exceeding fifteen days unless there are exceptional circumstances justifying a longer extension of time.

(5) Omitted

(6) An extension of time granted under sub-section (3) shall not, for the purpose of charge of default surcharge under sub-section (1) of section 205, change the due date for payment of income tax under section 137.

V. SHARING THIS EMAIL TO FBR & MEDIA

We are concurrently sharing this email with FBR officials to consider the same and grant general extension in order to avoid non-compliance at large by over 5.5M extension letters and approval thereof. The same covered for earlier decline is Business Recorder.

For the public benefits at large, we are sharing this comprehensive email to Print & Electronic Media Representative.

VI. CONCLUDING REMARKS

Knowing that Great Tax Consultants are working hard (including our team is working till late night for several days, even working on Sundays too and has plans for today too including our another office 786 Tax, however, we recommend that no need to feel pressure but take care of yours, theirs & team Health too, as PTBA President has also suggested the same.

VII. LIST OF RELEVANT TLQCS; WHILE MOST RELEVANT ARE BOLD

a.         3797 of 29.10.26 about ITR TY 2026 Return Extension issue: FTO Interim order but no Relief so far, as FBR Comments sought in 30 days

b.         3774 of 13.10.26 about ITR TY 2026: 16+ issues. Hence, sufficient extension be allowed as per KTBA

c.          3793 of 28.10.26 about ITR TY 2026: Hearing before FTO for Extension till 2.12.26, etc by PTBA & related matters

d.         3761 of 1.10.26 about ITR TY 2026: Return Extension allowed till 15.10.26 as KC predicted and KC Recommendation

e.          3760 of 29.9.26 about IT TY 2026: Extension expected for 10+ reasons

f.          3758 of 28.9.26 about Parliamentarian Tax & Wealth Directories for TYs 2020 to 2025 release demanded by PAFO & Media coverage

g.         3753 of 24.9.26 ITR TY 2026: ATL @4M; 3.5M Traders + 4.5M to be in Tax Net = 12M expected but 2.2M filed; 476K excess over LY per FBR

h.         3751 of 24.9.26 BTB & Traders' Scheme: Only 2 New Traders filed return by 22.9.26 and KC Views

i.           3748 of 22.9.26 ITR TY 2026: IRIS Error in Computation of Minimum Tax Difference Section 153 – KTBA

j.           3739 of 18.9.26 BTB: 3.5 Million Traders (including retailers) below Rs 200M Turnover will be in tax-net as Govt

k.         3736 of 17.9.26 IT TY 2026: Urgently send IRIS Portal Anomalies, Technical Issues & Filing Difficulties to Bars and KC Views & Recommendations

l.           3731 of 15.9.26 ITR TY 2026: Minimum Tax 5 issues & several issues as per PTBA

m.        3709 of 4.9.26 ITR TY 2026: Requests for Error-Free Return on IRIS and Extension of Filing Deadline by LTBA

n.         3702 of 28.8.26 ITR TY 2026: LTBA Training Session & Unresolved Issue Letter to FBR by PTBA

o.         3699 of 27.8.26 ITR TY 2026: PTBA-PRAL Meeting on 17 Issues and KC Views & Recommendations

p.         3699 of 27.8.26 ITR TY 2026: PTBA-PRAL Meeting on 17 Issues and KC Views & Recommendations

q.         3690 of 21.8.26 ITR TY 2026: KTBA-PRAL Meeting Details and KC Views & Recommendations

r.          3690 of 21.8.26 ITR TY 2026: KTBA-PRAL Meeting Details and KC Views & Recommendations

s.          3684 of 19.8.26 ITR TY 2026: KTBA-FBR Successful Collaborative Session

t.           3671 of 13.8.26 ITR TY 2026: KTBA Raised 20+ Issues in Online Filing

u.         3655 of 4.8.26 ITR TY 2026: PRAL Technical Support for Return Filing

v.         3644 of 29.7.26 draft Simplified Tax Regime for Small Traders & Shopkeepers and form– SRO 1166

w.        3626 of 20.7.26 IT Return TY 2026: IRIS Return Forms Streamlining Suggestions by GTPA

x.         3620 of 16.7.26 Delayed Draft SRO Introduces Simplified Tax Procedure & E-Return for Small Shopkeepers – SRO 1109

y.         3618 of 15.7.26 IT Return TY 2026: Some Changes Introduced in Returns & KC Recommendations

z.          3615 of 14.7.26 IT Return TY 2026: Draft Preparation Enabled on IRIS

aa.       3603 of 7.7.26 TY 2026: PTBA Reminder for Delay in Return Final SRO & IRIS Uploading & Extension Reason

bb.      3511 of 9.5.26 Delayed Draft Electronic 4 IT Return Forms for TY 2026 via SRO 835 & KC Views as to 4 Pending Return Forms

cc.       1224 of 9.11.20 Stepwise Deadlines for Timely Notifying IT Return Forms – SRO 1185

VIII. MULTIPLICATION ALLOWED

Although all the Commentaries are for the Subscribed IDs only, however, your Goodself is allowed to share this QC (with trail) for the Noble Cause to Impart Knowledge to maximum.

IX. FURTHER DETAILS & SERVICES

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email info.kasbati@professional-excellence.com. Your Good self may continue to get other services from your current Tax & Legal Advisors.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)