Algorithmic Tax Settlement: The Offer, Ten-Day Steps and Limits

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An algorithmic settlement is an offer for identified issues, not a self-declared amnesty. A taxpayer cannot choose a discounted amount from a blog post and assume the proceedings have ended.

Income-tax steps

Section 134B allows FBR to establish the mechanism before specified assessment or amendment orders. If an offer is made, the taxpayer choosing it has ten days to accept on IRIS, deposit the settlement amount and revise the relevant return. The associated section 114 changes address revision without Commissioner approval and the specified penalty/default-surcharge treatment.

Sales-tax mechanism

Section 47AA provides a separate mechanism before orders under sections 11D or 11E. The registered person accepting an offer must accept it on IRIS and deposit the amount within ten days. Follow the correct tax-specific procedure rather than importing the income-tax return-revision step into every case.

What the settlement does not cover

The provisions preserve proceedings on issues or discrepancies outside the offer and on other periods. Record precisely which issue and year or period have been settled.

Before accepting

Reconcile the offered amount to the records, identify concessions being accepted and save the offer, acceptance, payment and any revised return. The Act authorizes the mechanism; operational availability and a particular taxpayer's offer must be verified in the official system.

Source and scope

Finance Act 2026, official FBR gazette, PDF pages 20-41. Text reviewed on 14 October 2026. This explains the enacted amendment; a notification-dependent procedure must be checked separately before use.