FBR introduces automated scrutiny of tax returns

November 12, 2026 (MLN): Taxpayers will be informed electronically of factual or legal errors and discrepancies detected in their income tax returns before any legal or penal action is initiated, under a new automated scrutiny procedure notified by the Federal Board of Revenue (FBR).

The procedure was introduced through SRO 2098(I)/2026, dated November 10, which inserts Rule 38B, “Procedure for electronic scrutiny and intimation of issues detected by the automated system”, in the Income Tax Rules, 2002, after Rule 38A.

Under the rule, an automated system, including CRM, will process returns of income furnished by taxpayers. The system may send an online advice or advance intimation through IRIS, pointing out factual or legal mistakes or discrepancies. This will allow taxpayers to clarify the issue, rectify the errors or take other corrective action. The same system-generated advance intimation can also be sent by the Officer of Inland Revenue having jurisdiction.

Each intimation must specify the response time, which cannot be less than seven days. If no response is received within the stipulated time, a reminder will be sent to the taxpayer, which shall not be less than seven days.

The record of detected issues or discrepancies, the intimations sent and the responses received will be communicated to the Officer of Inland Revenue having jurisdiction over the taxpayer. The intimations, responses and actions taken will also be recorded in a dashboard designed under the system.

The procedure for automated scrutiny, analysis and cross-matching of other available data, issues pointed out by the system and electronic communication to the taxpayer will be implemented through a Change Request Form (CRF).

The Officer of Inland Revenue will analyses the taxpayer’s response, or the lack of it, and take appropriate action, if required, under the relevant provisions of the income tax law and the rules made under it.

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