The Federal Board of Revenue (FBR) has introduced a comprehensive procedure for the electronic scrutiny of millions of income tax returns filed across the country, allowing taxpayers to address discrepancies identified by an automated system before any legal or penal action is initiated.

According to Statutory Regulatory Order (SRO) 2098(1)/2026, the FBR has formally inserted rule 38B to put in place the procedure for electronic scrutiny and intimation of issues detected by the advanced automated system. This automated system would be called Centralised Risk Management (CRM) and it would process taxpayers' income tax returns under Section 120(2A) of the Income Tax Ordinance, 2001.

The newly established mechanism would issue online advice or advance intimation through the Integrated Revenue Information System (IRIS), carefully identifying factual or legal errors and discrepancies present in tax returns. This digital intervention will enable taxpayers to clarify the highlighted issues, rectify reporting errors or take other corrective action before any formal legal or penal proceedings are initiated against them.

Furthermore, this system-generated advance intimation of discrepancies may also be officially issued by an authorized Inland Revenue officer to ensure complete transparency and compliance. The notification would specify a response period of at least 7 days, during which the taxpayer would need to clarify the discrepancies, rectify errors or take corrective actions to remove them.

If no response is received from the taxpayer within the stipulated period, a formal reminder would be sent, allowing the taxpayer a further period of at least 7 days to comply. The complete record of detected issues or discrepancies, the intimation sent to the taxpayer, and any response received would be communicated directly to the relevant Inland Revenue officer.

The officer will examine the taxpayer's response, or the absence of one, and take appropriate action, where necessary, under the relevant provisions of the Income Tax Ordinance, 2001. Any subsequent action taken by the officer would also be systematically recorded on the dashboard.

The procedure for automated scrutiny, analysis and crossmatching of other available data, identification of issues by the system and electronic communication of these issues to taxpayers will be implemented through a Change Request Form.