S.R.O. 1166(1)/2026.Islamabad, the 27th July, 2026.

NOTIFICATION (Income Tax) S.R.O. 1166(1)/2026. - In exercise of the powers conferred by section 99B read with sub-section (1) of section 237 of the Income Tax Ordinance, 2001 (XLIX of 2001), the Federal Board of Revenue is pleased to make the following Special Procedure for Small Shopkeepers, the same having been previously published vide Notification No. S.R.O. 1109(1)/2026 dated 14th July, 2026, as required by sub-section (3) of section 237 of the said Ordinance, namely: - "Special Procedure for Small Shopkeepers Applicability. — This special procedure shall apply to Individuals earning income mainly through retail shops with annual turnover up to PKR 200 million. This special procedure shall apply for tax year 2026. Exclusions. — This procedure shall not apply to Individuals whose turnover exceeded PKR 200 million in any one of the preceding 3 years; those owning more than one shop; Tier-I retailers; sellers of jewellery; and providers of professional services (e.g. doctors, engineers, lawyers); and This procedure applies only to shop income — other sources of income are excluded. Retailers who filed a return for tax year 2025 may also file a return 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. 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. Voluntary Nature. - The procedure shall remain optional and a shopkeeper may either pay tax under this procedure or can file a regular income tax return. Tax Rate. - Tax shall be charged at the rate of 1 % of gross turnover. 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. 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 return of income regardless of any tax deduction or collection at…