FBR Allows Late Filers to Join ATL Without Fine

The Federal Board of Revenue (FBR) has implemented a new policy allowing late filers of income tax returns to join the Active Taxpayer List (ATL) without incurring a Rs. 25,000 surcharge. However, this exemption is contingent upon the late filers submitting an undertaking via Form ATL-U, agreeing not to engage in any property transactions for a period of six months following the submission date.

The FBR issued the relevant amendment to the Income Tax Rules 2022 through SRO 2097(I)/2026 on Tuesday. Under this arrangement, individuals must refrain from purchasing, acquiring, or obtaining any interest in property within six months from the date they submit the Form ATL-U. Those who comply with this undertaking can be added to the ATL without paying the standard late filing surcharge.

The six-month restriction is set to commence on the date indicated on the electronic acknowledgement generated by the FBR's Integrated Revenue Information System (IRIS) after the Form ATL-U has been successfully submitted. The FBR has the authority to verify whether individuals have adhered to the undertaking by cross-referencing information from various sources, including tax department records, government agency databases, property registries, financial institution reports, and other credible sources.

In the event that the FBR determines an individual violated the undertaking by acquiring property during the restricted period, it will first grant the individual an opportunity to submit an electronic explanation. If the violation is proven, the fee waiver will be rescinded from the date of the breach, and the individual's status in the ATL will be governed by the prevailing rules applicable to late filers. The FBR had previously circulated a draft of this scheme on October 6, 2026, via SRO 1619(I)/2026.