Written by Faisal Shahnawaz in Taxation Taxpayers face daily penalties for late income tax returns, while separate fines apply for failing to submit wealth statements. ISLAMABAD: The Federal Board of Revenue (FBR) has outlined substantial monetary penalties for taxpayers who fail to file their income tax returns and wealth statements for Tax Year 2026 as the September 30 deadline approaches. The statutory deadline for filing income tax returns and wealth statements is September 30, 2026. The FBR has so far not announced any extension, despite calls from business groups and tax bars seeking additional time for taxpayers to complete their filings. With the deadline fast approaching, the tax authority is maintaining pressure on individuals, businesses and corporate entities required to fulfil their annual tax obligations. Under the Income Tax Ordinance, 2001, taxpayers who fail to submit their returns within the prescribed period may face significant financial penalties. Penalty for late income tax return A person who fails to furnish a return of income required under Section 114 by the due date is liable to a penalty based on the duration of the default. The penalty is the higher of: • 0.1 percent of the tax payable for the relevant tax year for each day of default; or • Rs1,000 for each day of default. The law also prescribes minimum penalties. For an individual deriving 75 percent or more of income from salary, the minimum penalty is Rs10,000. In all other cases, the minimum penalty is Rs50,000. However, the maximum penalty cannot exceed 200 percent of the tax payable by the taxpayer for the relevant tax year. Penalty reduction for late filers Taxpayers who miss the September 30 deadline may qualify for a graduated reduction in the applicable penalty if they subsequently file their returns. The penalty is reduced by: • 75 percent if the return is filed within…