The National Board of Revenue (NBR) has issued new guidelines for verifying taxpayers’ Proof of Submission of Return (PSR) and system-generated certificates containing Taxpayer Identification Numbers (TINs). The move aims to strengthen tax-zone-based monitoring and ensure proper verification of these documents before government and private service providers deliver various services.

The NBR issued the directive on August 6. Under the new instructions, each tax zone must form a withholding tax monitoring team and assign specific officials to verify PSRs and TIN certificates.

According to the directive, the officer of Inspection Range-1 in each tax zone will serve as the convener, while officers from Inspection Ranges-2, 3 and 4 will act as joint conveners. A Deputy Commissioner of Taxes, Assistant Commissioner of Taxes or Additional Assistant Commissioner of Taxes will serve as team leader, with tax inspectors serving as members.

If the same authority is responsible for withholding tax deduction as well as enforcing the legal requirement to submit a PSR or TIN certificate, the team responsible for withholding tax monitoring will also conduct the verification.

PSR Must Be Verified Before Providing Services

One of the key instructions is that a taxpayer’s PSR for the latest tax year must be verified before any service is provided.

For this purpose, each PSR must be checked through the PSR verification system of the NBR’s e-Tax system.

Similarly, the authenticity of system-generated certificates containing TINs must be confirmed. The NBR has instructed authorities to verify such certificates through the designated income tax website or by using a barcode scanner.

In other words, authorities cannot simply accept a taxpayer’s PSR or TIN certificate after checking the physical document. They must verify the information online and confirm its authenticity before providing the service.

Authorities to Be Informed About Legal Requirements

The directive requires service-providing authorities to be informed at the beginning of the financial year about the relevant laws and regulations, including Section 264 of the Income Tax Act, 2023, and the Finance Act.

Authorities must also be informed that failure to cooperate with the NBR may result in penalties under Section 318 of the Income Tax Act, 2023, while failure to comply with the relevant instructions may attract fines under Section 264.

The NBR has also called for necessary awareness and publicity regarding the applicable laws and instructions.

Monthly Reports Required

The NBR has instructed that PSR and TIN certificate verification activities must be brought under regular monitoring rather than being limited to paperwork.

For this purpose, signed information on PSR and TIN certificate verification must be collected from implementing authorities every month in a prescribed format.

The information will then be reviewed as part of the monitoring activities of the respective tax zones.

In addition, reports in the prescribed format must be submitted to the NBR’s Tax Survey and Inspection Branch within the first three working days of every month.

Companies and Firms Also Covered

Under Section 147 of the Income Tax Act, 2023, PSRs and TIN certificates must also be examined while verifying withholding tax deductions or collections involving companies, firms, associations of persons and trusts.

As a result, stricter verification will apply not only to individual taxpayers but also to businesses and various institutional service recipients when they submit proof of tax return filing and TIN-related documents.

50% Additional Tax if PSR Is Not Submitted

The directive also refers to the provisions of Section 142 of the Income Tax Act, 2023.

Under the provision, if an individual or organization fails to submit the required PSR while receiving a service, tax must be collected at a rate 50 percent higher than the applicable withholding tax rate.

Therefore, submitting a PSR and ensuring its authenticity before receiving services have become important requirements for both taxpayers and service providers.

No Monitoring Beyond Jurisdiction

The NBR has made it clear that officials must conduct monitoring activities strictly within their respective jurisdictions and powers granted by the Board. No monitoring activity may be carried out beyond the authorized jurisdiction.

Officials must also ensure that information is submitted to the NBR according to the prescribed procedures. Relevant tax officials have been instructed to strictly fulfill their responsibilities to ensure proper implementation of the directive.

The new NBR guidelines are expected to make the verification of PSRs and TIN certificates more structured and technology-based. The measures are aimed at reducing the use of fake or inaccurate documents to obtain government and private services while strengthening oversight of taxpayers’ compliance with return-filing requirements.