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Qanoon Digest

dated 27.07.2026, regarding Special Procedure for Small Shopkeepers

SRO 1166(1)/2026Special procedures and schemes

SRO 1166(1)/2026 is an Income Tax SRO dated 27 July 2026, listed by FBR as "dated 27.07.2026, regarding Special Procedure for Small Shopkeepers".

FBR publishes this SRO as scanned images, so the text below was transcribed by Qanoon Digest from the page images, with tables set out as tables. Check the official PDF before relying on any wording or figure.

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Government of Pakistan
Revenue Division
Federal Board of Revenue

Islamabad, the 27th July, 2026.

NOTIFICATION
(Income Tax)

S.R.O. 1166(I)/2026. - In exercise of the powers conferred by section 99B read with sub-section (1) of section 237 of the Income Tax Ordinance, 2001 (XLIX of 2001), the Federal Board of Revenue is pleased to make the following Special Procedure for Small Shopkeepers, the same having been previously published vide Notification No. S.R.O. 1109(I)/2026 dated 14th July, 2026, as required by sub-section (3) of section 237 of the said Ordinance, namely: -

"Special Procedure for Small Shopkeepers

  1. Applicability. - This special procedure shall apply to Individuals earning income mainly through retail shops with annual turnover up to PKR 200 million. This special procedure shall apply for tax year 2026.

  2. Exclusions. - This procedure shall not apply to -

(i) Individuals whose turnover exceeded PKR 200 million in any one of the preceding 3 years; those owning more than one shop; Tier-1 retailers; sellers of jewellery; and providers of professional services (e.g. doctors, engineers, lawyers); and

(ii) This procedure applies only to shop income - other sources of income are excluded. Retailers who filed a return for tax year 2025 may also file a return under this Special Procedure for small shopkeepers, provided their payable tax is not lower than in 2025, and they have not split up or renamed their business to avail this special procedure.

  1. Registration. - Shopkeepers may register with FBR through the IRIS web portal, shopkeepers' mobile application, or by visiting the nearest tax office for assistance in registration.

  2. Voluntary Nature. - The procedure shall remain optional and a shopkeeper may either pay tax under this procedure or can file a regular income tax return.

  3. Tax Rate. - Tax shall be charged at the rate of 1% of gross turnover. Shopkeepers may deduct withheld income tax from their payable amount. However, if withholding tax collected exceeds the minimum tax payable under this procedure, no refund shall be issued.

  4. Minimum Tax under this Special Procedure. - To avail this special procedure, the shopkeepers must pay a minimum of PKR 25,000 in cash along with return of income regardless of any tax deduction or collection at source under the Ordinance. Tax payable (less withholding) or PKR 25,000 whichever is higher shall be the tax payable.

  5. Audit. - Shopkeepers opting for this special procedure shall generally not be subject to audit. Departmental proceedings may be initiated only in consultation with representatives of trade associations - in case of third party information received by FBR about:-

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(a) Significant or unusual economic transactions;
(b) Acquisition or ownership of expensive assets; and
(c) Gross misuse of this special procedure to avoid taxes.

  1. Return Filing. - Shopkeepers shall file a simplified prescribed return (Annex-I) on IRIS web portal or through shopkeepers' mobile application, declaring total sales, total purchases, other expenses, and net profit. The same simplified form also provides an easy mechanism for shopkeepers to declare their legitimate assets. This form shall be available in Urdu and regional languages.

  2. Withholding & Other Provisions. - Shopkeepers under this special procedure shall not be required to withhold tax on purchases of goods or services under section 153 of the Income Tax Ordinance. The provisions of minimum tax under section 113 of the Ordinance and tax at the rate of 1.25% shall also not apply.

  3. Default Surcharge. - If a shopkeeper neither files a regular income tax return nor opts for this special procedure by the due date, penalties of PKR 10,000 on the first default, PKR 25,000 on second default, and PKR 50,000 on third default shall be imposed. There shall be a gap of at least one month between each default proceedings.

  4. POS or Digital Invoicing Exemption. - Eligible bona fide shopkeepers under this special procedure are not required to install a sales tax POS system or digital invoicing infrastructure.

  5. Imputable Income. - Shopkeepers opting for this special procedure shall be entitled to take credit of imputable income based on payment of tax in order to support their personal expenses and accretion of assets.

  6. Compliant Shopkeeper Plate. - Every bona fide shopkeeper qualifying and opting for this special procedure shall be issued a compliant shopkeeper plate ("Green Plate") containing an FBR specified QR-Code, the shopkeepers' name and NTN, and the address of the shopkeeper, which shall be prominently placed outside the shop. This QR-code, shall contain information about location of shop and particulars of ownership. No officer or official of FBR shall enter the shop in presence of this plate in respect of tax matters of a bona fide shopkeeper.

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Annex-I

Easy Tax Return for Small Retailers (Tax Year 2026)

Field Field
Name: ID Card Number:
Business Name: Business Address:
Nature of Business (type of goods bought and sold):

Income & Tax Details

Item Amount
Annual Sales of Goods:
Annual Purchase of Goods:
Business Expenses:
Net Profit:
Other Sources of Income (if any):
Total Tax: To be calculated by system
Imputed Income: To be calculated by system
Tax Already Paid (Withholding):
Tax Paid with Return:

Assets (Balance Sheet)

Item Amount
Business Capital:
Non-Movable Property:
Cash in Bank:
Cash in Hand:
Other Assets:
Total Assets:

I certify/declare that the above statements are true to the best of my knowledge.

Signature: ____________________ Date: ____________________

[F No. 1(17)R&S/2026]

(Muhammad Amin Qureshi)
Secretary (Rules & SRO)

Related Income Tax SROs on special procedures and schemes

  • SRO 1640(I)/202623 September 2026Specify sector for Prescribing the Special Procedure in terms of section 99C of the Income Tax ordinance, 2001 (XLIX of 2001)
  • SRO 1641(I)/202623 September 2026Chapter IIA Special Procedure for Taxation of Persons Earning Income from Remunerative Social Media Content
  • SRO 1642(I)/202623 September 2026Chapter-VA Special Procedure for Taxation of Persons Earning Income from Remunerative Social Media Content
  • SRO 1109(I)/202614 July 2026dated 14.07.2026, regarding draft SRO Special Procedure for Small Shopkeepersdraft
  • SRO 546(1)/20261 April 2026Insertion of new chapter-IIA, in respect of Special Procedure for Taxation of Persons Earning Income from Remunerative Social Media Content.
  • SRO 545(1)/20261 April 2026Insertion of new chapter-VA, in respect of Special Procedure for Taxation of Persons Earning Income from Remunerative Social Media Content

All SROs on special procedures and schemes

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