Glossary of Terms

Definitions for core Pakistani tax concepts such as

This glossary defines key terms and acronyms used throughout the TaxAible platform and Pakistani tax documentation.

A

• Active Taxpayers List (ATL): A list maintained by the FBR of persons who have filed their tax returns for the relevant tax year. Being on the ATL (being a "Filer") entitles you to lower withholding tax rates.
• Adjustable Tax: Tax already paid on various transactions (e.g., telephone bills, vehicle registration, banking transactions) that can be deducted from your final tax liability.
• Audit Shield: A TaxAible feature that analyzes your return for "red flags" and assigns a risk score based on FBR audit patterns.

C

• Capital Asset: Any property held by a taxpayer, whether or not connected with business, including immovable property, shares, and securities.
• CNIC: Computerized National Identity Card issued by NADRA. It serves as the primary identifier for individual taxpayers in Pakistan.

D

• Deemed Income: Income that is assumed to have been earned under specific sections of the law (e.g., Section 7E), even if no actual cash was received.
• Deductible Allowances: Specific amounts (e.g., Zakat, charitable donations, educational expenses) that can be subtracted from total income to reach taxable income.

F

• FBR (Federal Board of Revenue): The central government agency responsible for collecting federal taxes in Pakistan.
• Fair Market Value (FMV): The price that a property would fetch in the open market. For Section 7E, this is often determined by FBR or DC (District Collector) valuation tables.
• Filer: An informal term for a person whose name appears on the Active Taxpayers List (ATL).

I

• IRIS: The official web-based portal developed by the FBR for the electronic filing of income tax returns and other statements.
• IRIS Connector: A TaxAible-exclusive browser extension that automates the transfer of prepared tax data from TaxAible to the FBR IRIS portal.

N

• NTN (National Tax Number): A unique number assigned by the FBR to a taxpayer. For individuals, this is usually their CNIC number.

R

• Reconciliation: The process of ensuring that the increase/decrease in net wealth matches the difference between total inflows (income) and total outflows (expenses).
• Resident: For tax purposes, an individual who is present in Pakistan for 183 days or more in a tax year.

S

• Section 7E: A law that imposes tax on "deemed income" from immovable property (plots, houses, etc.) with an aggregate value exceeding PKR 25 million.
• Slab: The progressive tax rates applicable to different income brackets. As your income increases, the rate of tax on the additional income also increases.

T

• Tax Year: In Pakistan, the tax year runs from July 1st to June 30th of the following year (e.g., Tax Year 2024 is July 2023 to June 2024).

V

• Voice2Voice: Our proprietary real-time voice interaction technology that allows users to chat with the tax assistant with ultra-low latency.

W

• Wealth Statement (Section 116): A mandatory statement filed alongside the income tax return that declares a taxpayer's assets, liabilities, and personal expenses.
• Withholding Tax (WHT): Tax deducted at the source of a transaction (e.g., by an employer from salary or by a bank from profit on debt).

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[NOTE] This glossary is for informational purposes. For legal definitions, please refer to the Income Tax Ordinance, 2001.