Refund Application Process under Section 170 – Income Tax Ordinance, 2001
1. Eligibility
- Any taxpayer who has paid excess tax under the Income Tax Ordinance may apply for a refund.
- A refund is also available where an advance or loan treated as dividend under Section 2(19)(e) is repaid.
2. Application Requirements
- The refund application must be submitted to the Commissioner of Income Tax:
In the prescribed form
- Verified in the prescribed manner
- Within three (3) years from the later of:
- The date of the assessment order for the relevant tax year, or
- The date on which the tax was paid
3. Action by the Commissioner
If the Commissioner is satisfied that tax has been overpaid, the excess amount shall be:
- Adjusted against any other income tax due under the Ordinance
- Adjusted against any outstanding liabilities of other taxes
- Refunded to the taxpayer, if any balance remains
4. Processing Timeline
- The Commissioner must decide the refund application within 60 days of receipt
- A written order must be issued after providing the taxpayer an opportunity of being heard
5. Right to Appeal
A taxpayer may file an appeal if:
- The refund application is rejected, or
- No decision is issued within the prescribed 60-day period
6. Automated Refunds
The Federal Board of Revenue may prescribe rules for centralized and automated refund processing, effective from a date notified by the Board.
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