dated 27.07.2026, regarding Special Procedure for Small Shopkeepers

Government of Pakistan Revenue Division Federal Board of Revenue ***** Islamabad. the 27'h July. 2026. NOTIFICATION (lncome Tax) S.R.O. 1166(I)/2026. - In exercise of the powers conferred by section 99B read with sub-section ( 1) of section 23 7 of the Income Ta.r Ordinance, 2001 (XLIX of 2001), the Federal Board ofRevenue is pleased to make the following Special Procedure for Small Shopkeepers, the same having been previously published ulde Notification No. S.R.O. 1i09(I)/2026 dated l4th July, 2026, as required by sub-section (3) ofsection 237 of the said Ordinance, namely: - "Special Procedure for Small Shopkeepers l. Applicability. - This special procedure shall apply to Individuals eaming income mainly through retail shops with annual tumover up to PKR 200 million. This special procedure shall apply for tax year 2026. 2. Exclusions. - This procedure shall not apply to - (i) lndividuals whose tumover exceeded PKR 200 million in any one of the preceding 3 years; those owning more than one shop; Tier-l retailers; sellers of jewellery; and providers of professional services (e.g. doctors, engineers, lawyers); and (ir) This procedure applies only to shop income - other sources of income are excluded. Retailers who filed a retum for tax year 2025 may also file a retum under this Special Procedure for small shopkeepers, provided their payable tax is not lower than in 2025, and they have not split up or renamed their business to avail this special procedure. 3. Registration. - Shopkeepers may register with FBR through the IRIS web portal, shopkeepers' mobile application, or by visiting the nearest tax office for assistance in registration. 4. Voluntary Nature. - The procedure shall remain optional and a shopkeeper may either pay tax under this procedure or can file a regular income tax retum. 5. Tax Rate. - Tax shall be charged at the rate of 1%o ofgross tumover. Shopkeepers may deduct withheld income tax from their payable amount. However, if withholding tax collected exceeds the minimum tax payable under this procedure, no refund shall be issued. 6. Minimum Tax under this Special Procedure. - To avail this special procedure, the shopkeepers must pay a minimum of PKR 25,000 in cash along with retum of income regardless ofany tax deduction or collection at source under the Ordinance. Tax payable (less withholding) or PKR 25,000 whichever is higher shall be the tax payable. 7. Audit. - Shopkeepers opting for this special procedure shall generally not be subject to audit. Departmental proceedings may be initiated only in consultation with representatives of trade associations in case of third party information received by FBR about:-

)a c (b) ( ( Significant or unusual economic transactions; Acquisition or ownership ofexpensive assets; and Gross misuse of this special procedure to avoid taxes. 8. Return Filing. - Shopkeepers shall file a simplified prescribed retum (Annex-I) on IRIS web portal or through shopkeepers' mobile application, declaring total sales, total purchases, other expenses. and net profit. The same simplified form also provides an easy mechanism for shopkeepers to declare their legitimate assets. This lorm shall be available in Urdu and regional languages. 9. Withholding & Other Provisions. - Shopkeepers under this special procedure shall not be required to withhold tax on purchases of goods or services under section 153 of the Income Tax Ordinance. The provisions of minimum tax under section 113 of the Ordinance and tax at the rate of 1 .25Yo shall also not apply. 10. Default Surcharge. - lfa shopkeeper neither files a regular income tax retum nor opts for this special procedure by the due date, penalties of PKR 10,000 on the first default, PKR 25.000 on second default. and PKR 50,000 on third default shall be imposed. There shall be a gap of at least one month between each default proceedings. 11. POS or Digital Invoicing Exemption. - Eligible bona fide shopkeepers under this special procedure are not required to install a sales tar POS system or digital invoicing infrastructure. 12. Imputable Income. - Shopkeepers opting for this special procedure shall be entitled to take credit of imputable income based on payment of tax in order to support their personal expenses and accretion of assets. 13. Compliant Shopkeeper Plate. - Every bona fide shopkeeper qualifying and opting for this special procedure shall be issued a compliant shopkeeper plate ("Green Plate") containing an FBR specified QR-Code, the shopkeepers' name and NTN, and the address of the shopkeeper, which shall be prominently placed outside the shop. This QR-code. shall contain information about location ofshop and particulars ofownership. No officer or official ofFBR shall enter the shop in presence ofthis plate in respect oftax matters ofa bona fide shopkeeper.

Name: lD Card Number: Business Name: Business Address: Nature of Business (type of goods bought and sold): lncome & Tax Details Annual Sales of Goods: Ann ual Purchase of Goods: Business Exnses: Net Profit: Other Sources of lncome (if an): Total Tax: To be calculated lm puted lncome To be calculated Tax Already Paid (withholding): Tax Paid with Retu rn Business Capital Non-Movable Property: Cash in Bank: Cash in Ha nd: Total Assets: Oate: [F No. 1(17)R&S/2026] (Muhamma in Qureshi) Secretary (Rules & SRO) Annex-l Easy Tax Return for Small Retailers (Tax Year 2025) Assets (Balance Sheet) Other Assets: I certify/dectore thot the obove stotements ore true to the best of my knowledge. Signature: