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Pakistan’s Tax Laws (Amendment) Ordinance, 2025 added provisions addressing when tax becomes payable and recoverable after a High Court or Supreme Court decision on the issue giving rise to the tax. The ordinance was published on May 2, 2025, and said it would take effect immediately. Its status after promulgation has not been established here, so these provisions should not be treated as verified current law in October 2026.
What changed in the Income Tax Ordinance
The Tax Laws (Amendment) Ordinance, 2025, Ordinance No. IV of 2025, inserted subsection 138(3A) and subsection 140(6A) into Pakistan’s Income Tax Ordinance, 2001. The provisions address two related but distinct stages: when tax becomes payable and when tax under an assessment order becomes recoverable. The ordinance was published in the Gazette of Pakistan, Extraordinary, on May 2, 2025; its text states that it “shall come into force at once.” Read the Gazette text.
Section 138(3A): when tax becomes payable
Section 138(3A) says tax payable under a provision of the Income Tax Ordinance or an assessment order becomes immediately payable, or payable within the time specified in a notice from an income tax authority, when the issue giving rise to that tax is decided by a High Court or the Supreme Court of Pakistan. It says this applies irrespective of time provided under another provision or a court, forum, or authority decision or judgment.
“(3A) Notwithstanding anything contained in this Ordinance or any other law or any rule, any decision or judgment of any court, forum or authority, the tax payable under any provision of this Ordinance or any assessment order shall become immediately payable or within the time specified in the notice issued by the income tax authority under this sub-section, irrespective of the time provided under any other provision or the said decision or judgment, in case the issue giving rise to the tax payable is decided by a High Court or Supreme Court of Pakistan.”
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This is the enacted wording of subsection 138(3A) in the May 2, 2025 Gazette publication. Its wording makes the relevant trigger a High Court or Supreme Court decision on the issue giving rise to tax; it does not describe every court ruling or every tax dispute as automatically triggering payment.
Section 140(6A): recovery under an assessment order
Section 140(6A) separately addresses recovery. Under the ordinance, tax payable under an assessment order becomes immediately recoverable, or recoverable within the time specified in an income tax authority notice, when the issue giving rise to the tax is decided by a High Court or the Supreme Court of Pakistan. It also contains language addressing time set under other provisions and court, forum, or authority decisions or judgments. The Gazette is the controlling source for the complete subsection wording.
How the payment and recovery provisions differ
The sections deal with connected but distinct consequences. Section 138(3A) addresses when tax is payable; section 140(6A) addresses when tax under an assessment order is recoverable. Neither should be confused with a separate provision in the same ordinance concerning officers posted at business premises.
| Provision | Subject | Trigger described in ordinance |
|---|---|---|
| Section 138(3A) | When tax becomes payable | The issue giving rise to the tax is decided by a High Court or the Supreme Court of Pakistan. |
| Section 140(6A) | When tax under an assessment order becomes recoverable | The issue giving rise to the tax is decided by a High Court or the Supreme Court of Pakistan. |
Section 175C is a separate measure
The ordinance also inserted section 175C, titled “Posting of Officer of Inland Revenue.” The Associated Press of Pakistan described it as relating to posting FBR officers at business premises in its May 5, 2025 report, “Tax Law (Amendment) Ordinance aims to address urgent legal, administrative gaps”. That provision concerns officer posting; it is not the source of the payment and recovery rules in sections 138 and 140. Consult the Gazette text for the provision’s conditions and scope rather than inferring them from its title.
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The publication of an ordinance and its stated commencement date establish what the instrument provided when promulgated, not whether it remains operative at a later date. FBR’s Acts/Ordinance/Rules index lists the instrument, but that listing alone does not establish its status in October 2026. The available evidence does not establish whether it was later extended, enacted by Parliament, allowed to expire, repealed, or amended. Anyone dealing with a tax demand or recovery notice should verify the current consolidated Income Tax Ordinance and subsequent official legislation, and obtain qualified Pakistani tax advice where needed.
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