FBR Tax Return Filing 2025: Bank Profit Entry

This instructional document provides a detailed guide for filing tax returns in Pakistan for the 2025 tax year, specifically addressing how to report bank profits. It explains that the Federal Board of Revenue (FBR) has enabled the 2025 tax return form for submission, differing from previous availability for review only. The core of the guidance focuses on distinguishing between bank profits below and above 5 million Pakistani Rupees, illustrating where to input these amounts within the online tax form and how the tax rates (15% fixed vs. normal tax slab) apply to each scenario. The document also clarifies the abolition of Section 7B and the new process for accounting for bank profit, emphasizing that the system now automatically applies the correct tax treatment based on the declared profit amount, and instructs users on properly entering withheld taxes.

FBR Tax Return Guide 2025: Bank Profit Taxation

The Federal Board of Revenue (FBR) has enabled the form for filing tax returns for the tax year 2025, meaning that you can now submit your tax return. Previously, until July 18, 2025, the form was only available for review, and submission was not permitted. This change took effect on July 19, 2025.

When filing your FBR tax return, you will encounter various tabs and five main heads of income:

• Income from Salary
• Income from Property
• Income from Business
• Income from Capital Gains
• Income from Other Sources

You are required to add your income under the relevant head. For instance, if you receive a salary, you would enter your full year’s salary under the Income from Salary head and calculate it.

A significant aspect of the tax filing process discussed in the sources is how to enter bank profit, especially given that Section 7B, which previously dealt with tax on bank profit, has been abolished. Bank profit must be entered in two places: on your income side and on your tax side.

Here’s how bank profit is handled based on the amount:

• Bank Profit More Than Rs. 5 Million (50 Lakhs):
• Entry: You must add this amount under “Other Source” and then select “Profit on debt”. For example, if your profit is Rs. 5.1 million (51 lakhs), you would enter 51 lakhs here and calculate it.
• Taxation: When your bank profit exceeds Rs. 5 million, the normal tax rate or normal tax slab (also referred to as the business rate or business lab rate) will be applicable. The system will pick up this amount and designate it as “subject to normal tax”. For an amount like Rs. 51 lakh, the system might apply a tax of ₹14,100 based on the normal business slab tax rate.
• Adjustable Tax: Although the normal tax rate applies, the bank would have initially deducted tax at a 15% rate. You need to account for this deducted tax under “adjustable tax” by selecting “Profit on day under section 151B from bank accounts deposit”. You will add your bank account details, the total profit amount (e.g., 51 lakhs), and the 15% amount the bank deducted (e.g., ₹9 lakhs). The system will then show any remaining tax liability that you need to pay. For instance, if your total normal tax was ₹14,100 but the bank already deducted ₹9 lakhs, you would then pay the remaining amount.
• Wealth Declaration: This profit also needs to be added to your wealth statement under the normal tax slab and normal return.
• Bank Profit Less Than Rs. 5 Million (50 Lakhs):
• Entry: Similar to larger profits, you add this amount under “Other Source” and then select “Profit on debt”. For example, if your profit is Rs. 4.95 million (49.5 lakhs), you would enter this amount.
• Taxation: If your bank profit is less than Rs. 5 million, a final and fixed tax of 15% will be levied on it. The system will automatically categorize this amount as “exempt from tax or subject to final and fixed tax”.
• Fixed and Final Tax Section: To calculate this tax, you need to go to the “tax chargeable” section, open the “fix and final tax” tab. Here, you will find “Profit on Day under Section 151 Sub Section One B” with a clear indication for amounts “not exceeding 5 million” at 15%. You will enter your profit (e.g., Rs. 49 lakh) and calculate it. The system will then generate the 15% fixed tax, for example, ₹742,500 on Rs. 49 lakh.
• Bank Deductions: You then enter the amount of tax the bank has already deducted from this profit in the designated column. If the bank has deducted the full tax amount, you will have no further tax liability for this profit.
• Wealth Declaration: This profit must also be included in your wealth statement under “income attributable to received declared as return for the year subject to final and fixed tax”.

It is important to note that the FBR now only displays any tax payable on your computation page; it no longer shows how much tax you have already paid or how much was due previously.

For those looking to learn more about tax, there is a complete playlist available regarding the return filing for Tax 2025, offering practical videos to help you learn tax filing free of cost.

Understanding FBR tax filing is like navigating a detailed roadmap to financial compliance. Just as a GPS guides you through specific turns and routes based on your destination and current location, the FBR system directs you to the correct sections and applies the appropriate tax rules—whether it’s a fixed toll or a variable rate—based on your income streams and their respective thresholds.

FBR Tax: Bank Profit Filing Guidelines 2025

The Federal Board of Revenue (FBR) has enabled the form for filing tax returns for the tax year 2025, allowing for submissions since July 19, 2025. This is a significant update, as previously, until July 18, 2025, the form was only available for review. A key area of concern for taxpayers, especially with the abolition of Section 7B which previously dealt with tax on bank profit, is how to properly enter bank profit.

When filing your FBR tax return, bank profit needs to be entered in two distinct places: on your income side and on your tax side.

Here’s a detailed breakdown of how bank profit is handled based on the amount:

• Bank Profit More Than Rs. 5 Million (50 Lakhs):
• Income Side Entry: You must add this amount under the “Other Source” head, specifically by selecting “Profit on debt”. For instance, if your bank profit is Rs. 5.1 million (51 lakhs), you would enter this amount here and calculate it. The system will then pick up this amount and designate it as “subject to normal tax”.
• Taxation: When your bank profit exceeds Rs. 5 million, the normal tax rate or normal tax slab (also referred to as the business rate or business lab rate) will be applicable. The system might apply a tax, such as ₹14,100, based on the normal business slab tax rate for an amount like Rs. 51 lakh.
• Adjustable Tax: Although the normal tax rate applies, the bank would have initially deducted tax at a 15% rate. To account for this, you need to go to the “adjustable tax” section. Here, you will find an option for “Profit on day under section 151B from bank accounts deposit” at a 15% rate, which reflects the tax already deducted by the bank. You will add your bank account number, the total profit amount (e.g., 51 lakhs), and the 15% amount the bank deducted (e.g., ₹9 lakhs). The system will then show any remaining tax liability that you need to pay; for example, if your total normal tax was ₹14,100 but the bank already deducted ₹9 lakhs, you would then pay any additional amount due.
• Wealth Declaration: This profit also needs to be added to your wealth statement under the normal tax slab and normal return.
• Bank Profit Less Than Rs. 5 Million (50 Lakhs):
• Income Side Entry: Similar to larger profits, you add this amount under “Other Source” and then select “Profit on debt”. For example, if your profit is Rs. 4.95 million (49.5 lakhs), you would enter this amount.
• Taxation: If your bank profit is less than Rs. 5 million, a final and fixed tax of 15% will be levied on it. The system will automatically categorize this amount as “exempt from tax or subject to final and fixed tax”.
• Fixed and Final Tax Section: To calculate this fixed tax, you need to go to the “tax chargeable” section and open the “fix and final tax” tab. Here, you will find “Profit on Day under Section 151 Sub Section One B” with a clear indication for amounts “not exceeding 5 million” at 15%. You will enter your profit (e.g., Rs. 49 lakh) and calculate it. The system will then generate the 15% fixed tax, for example, ₹742,500 on Rs. 49 lakh.
• Bank Deductions: You then enter the amount of tax the bank has already deducted from this profit in the designated column. If the bank has deducted the full tax amount, you will have no further tax liability for this profit.
• Wealth Declaration: This profit must also be included in your wealth statement under “income attributable to received declared as return for the year subject to final and fixed tax”.

It is important to note that the FBR’s computation page now only displays any tax payable; it no longer shows how much tax you have already paid or how much was due previously. For those looking to learn more about tax filing, a complete playlist for the Tax 2025 return filing is available, offering practical videos to help you learn free of cost.

Understanding how to enter bank profit in FBR tax filing is akin to a chef precisely measuring ingredients for a recipe. Just as each ingredient’s quantity determines the final dish’s taste, the specific amount of your bank profit dictates which tax “recipe” (normal tax slab or fixed/final tax) applies, ensuring your financial “dish” is perfectly compliant and balanced.

Navigating Taxable Income and FBR Filings for 2025

While the provided sources do not offer a direct, general definition of “taxable income,” they illustrate how various income streams are categorized and subjected to different taxation methods within the Federal Board of Revenue (FBR) tax filing system for the tax year 2025.

Here’s how income becomes “taxable” according to the sources:

• Heads of Income: All income must first be declared under one of the five main heads:
• Income from Salary
• Income from Property
• Income from Business
• Income from Capital Gains
• Income from Other Sources You are required to add your income under the relevant head, such as entering a full year’s salary under the “Income from Salary” head. Once income is added under these heads, it becomes subject to the FBR’s tax computation rules.
• Bank Profit Treatment (Illustrating Different Taxable Categories): The sources provide a detailed example of how bank profit is treated, which serves as a key illustration of different forms of “taxable income” based on thresholds, especially after the abolition of Section 7B:
• Bank Profit More Than Rs. 5 Million (50 Lakhs):
• If your bank profit exceeds Rs. 5 million, it is categorized as “subject to normal tax” or the “normal tax slab”. This means it will be included in the general tax computation and taxed at the normal tax rate (also referred to as the business rate or business lab rate).
• For example, a profit of Rs. 5.1 million (51 lakhs) would be entered under “Other Source” as “Profit on debt” and calculated. The system would pick up this amount and designate it as “subject to normal tax,” applying a tax based on the normal business slab tax rate (e.g., ₹14,100 for Rs. 51 lakh).
• Although the normal tax rate applies, the bank would have initially deducted tax at a 15% rate. This deducted amount is then accounted for under “adjustable tax” by selecting “Profit on day under section 151B from bank accounts deposit,” allowing the system to show any remaining tax liability. This profit is also declared in your wealth statement under the normal tax slab and normal return.
• Bank Profit Less Than Rs. 5 Million (50 Lakhs):
• If your bank profit is less than Rs. 5 million, it is subject to a final and fixed tax of 15%. The system will automatically categorize this amount as “exempt from tax or subject to final and fixed tax”.
• For instance, a profit of Rs. 4.95 million (49.5 lakhs) would be entered under “Other Source” as “Profit on debt”. To apply the fixed tax, you go to the “tax chargeable” section, open the “fix and final tax” tab, and select “Profit on Day under Section 151 Sub Section One B” for amounts “not exceeding 5 million” at 15%. The system then generates the 15% fixed tax (e.g., ₹742,500 on Rs. 49 lakh).
• Any tax already deducted by the bank is entered in the designated column, and if the full amount has been deducted, there will be no further tax liability for this specific profit. This profit must also be included in your wealth statement under “income attributable to received declared as return for the year subject to final and fixed tax”.

In essence, “taxable income” within the FBR context, as demonstrated by the sources, refers to income that, once declared under the appropriate head, becomes liable for tax under either the normal tax slab (where rates vary based on income brackets) or a fixed and final tax (a specific percentage that settles the tax liability for that particular income). The FBR’s computation page will only display any tax still “payable”.

Understanding what constitutes “taxable income” is like discerning which items in a grocery cart will be charged tax and at what rate. While all items are in the cart (declared income), some (like bank profit above a threshold) go through the regular checkout line with variable pricing (normal tax slab), while others (like bank profit below a threshold) go through a special express lane with a fixed, pre-determined price (fixed and final tax), but in both cases, they are ultimately subject to a charge (tax).

Fixed Tax Rates: Bank Profit and The 5 Million Threshold

Fixed tax rates, as discussed in the sources, refer to a specific percentage of tax levied on certain income streams that, once paid, finalizes the tax liability for that particular income, meaning no further tax is due on it. This is distinct from the normal tax slab where rates can vary based on income brackets.

Here’s a detailed breakdown of fixed tax rates based on the provided information, primarily focusing on bank profit:

• Application to Bank Profit: The primary instance of a fixed tax rate in the sources is applied to bank profit.
• The Rs. 5 Million Threshold: A critical factor in determining if a fixed tax rate applies to bank profit is a threshold of Rs. 5 million (50 lakhs).
• If your bank profit is less than Rs. 5 million (50 lakhs), then a final and fixed tax of 15% will be levied on it.
• The system automatically categorizes this amount as “exempt from tax or subject to final and fixed tax,” indicating that once this fixed tax is paid, no more tax is owed on that profit.
• Entering and Calculating Fixed Tax for Bank Profit:
• When your bank profit is, for example, Rs. 4.95 million (49.5 lakhs), you first enter this amount under the “Other Source” head, specifically selecting “Profit on debt”.
• To calculate the 15% fixed tax, you need to navigate to the “tax chargeable” section in the FBR tax return form and then open the “fix and final tax” tab.
• Within this section, you will find an option specifically for “Profit on Day under Section 151 Sub Section One B” for amounts “not exceeding 5 million” at 15%.
• Upon entering your profit (e.g., Rs. 49 lakh) and calculating it, the system will generate the 15% fixed tax amount (e.g., ₹742,500 on Rs. 49 lakh).
• Accounting for Bank Deductions: The bank would likely have already deducted tax from your profit. You must enter the amount of tax the bank has already deducted from this profit in the designated column. If the bank has deducted the full 15% fixed tax amount, you will have no further tax liability for that specific profit. The FBR’s computation page will only display any tax still “payable” to the FBR; it no longer shows how much tax you have already paid or was previously due.
• Wealth Statement Declaration: Bank profit subject to fixed and final tax must also be included in your wealth statement under the category “income attributable to received declared as return for the year subject to final and fixed tax”.

In essence, a fixed tax rate simplifies taxation for specific income types by applying a set percentage, making the tax liability predictable and conclusive for that particular income.

Understanding fixed tax rates is like buying an item with a clear, pre-set price tag: if your bank profit is below a certain amount, it has a “fixed price” of 15% tax, regardless of your other income, and once you pay that amount, the transaction is complete, with no further charges applied to that specific profit.

Wealth Reconciliation of Bank Profit: Fixed vs. Normal Tax

Wealth reconciliation, as discussed in the sources, is a crucial step in the tax filing process that occurs after you have entered all your income and tax details. It involves declaring how your income, specifically bank profit in this context, integrates into your overall financial standing or “wealth statement”. This process ensures consistency between your declared income and your assets.

The manner in which your bank profit is declared in your wealth statement depends entirely on whether it was subject to normal tax or fixed and final tax, which in turn is determined by the Rs. 5 million threshold.

Here’s how bank profit is handled in wealth reconciliation:

• For Bank Profit Less Than Rs. 5 Million (50 Lakhs):
• If your bank profit is less than Rs. 5 million (e.g., Rs. 49 lakh 50 thousand), it is subject to a final and fixed tax of 15%.
• When reconciling your wealth for this type of income, you must add it under the category: “income attributable to received declared as return for the year subject to final and fixed tax”. This signifies that the income has been fully taxed at a fixed rate and is now being accounted for in your wealth statement.
• For Bank Profit More Than Rs. 5 Million (50 Lakhs):
• If your bank profit exceeds Rs. 5 million (e.g., Rs. 5.1 million or 51 lakhs), it is categorized as “subject to normal tax” or the “normal tax slab”.
• In your wealth statement, this amount will be declared under the “normal tax slab and normal return”. It means this income contributes to your general taxable income and is subjected to the variable rates of the normal tax slab.

Essentially, wealth reconciliation provides a comprehensive picture of your financial inflows and their integration into your assets, distinguishing between income streams that have been fully settled via fixed taxation and those that contribute to your general income for normal tax computation. It’s a critical step to ensure that your declared income aligns with your overall financial position reported to the FBR.

Think of wealth reconciliation like balancing your personal ledger after receiving different types of income. Some income (like bank profit under Rs. 5 million) comes with a “final stamp” (fixed tax) that clearly marks it as settled and then gets recorded in a specific part of your ledger. Other income (like bank profit over Rs. 5 million) is added to your general pool of earnings, contributing to your overall financial status before the final tax bill (normal tax slab) is calculated, and then it is recorded in a different part of your ledger as part of your overall assets.

Download PDF Book

By Amjad Izhar
Contact: amjad.izhar@gmail.com
https://amjadizhar.blog

Affiliate Disclosure: This blog may contain affiliate links, which means I may earn a small commission if you click on the link and make a purchase. This comes at no additional cost to you. I only recommend products or services that I believe will add value to my readers. Your support helps keep this blog running and allows me to continue providing you with quality content. Thank you for your support!