Filing & Compliance · Section 171 · Tax Year 2026-2027
Refund Compensation Calculator
Calculate the compensation due on a delayed FBR tax refund, based on the refund amount, days of delay, and the applicable annual rate.
Step by step
How refund compensation is worked out
Enter your refund amount
The tax refund FBR owes you.
Set both dates
When the refund became due, and when it was (or will be) actually paid.
Confirm the rate
Typically pegged to KIBOR plus a margin.
See your compensation
Calculated daily on the refund amount for the delay period.
Reading the result
Compensation is owed, but rarely volunteered
Section 171 entitles you to compensation when a refund is not paid within the period allowed. In practice it is seldom added automatically, and a refund often arrives as the bare principal with nothing for the delay.
Knowing the figure is what makes it claimable. A specific amount, with the days counted and the rate applied, is something the department can process; a general complaint about slowness is not.
Two different delays
The delay that counts is the one after your refund became due — not the years you may have taken to claim it. Compensation compensates the department's delay, not your own. Establishing the date the refund fell due is therefore the part that decides the number.
The refund has to exist first
Compensation runs on a determined refund. If the refund is still contested, or the return has not been processed, the compensation calculation has nothing to attach to yet. The sequence is: file, get the refund determined, then count the delay from there.
If you are not yet sure a refund is due, start with the tax refund estimator.
Where this stops
The rate is entered rather than assumed because it is set by statute and has been revised. This computes one period at one rate; it does not decide the date your refund became due, which is the contested part in most cases.
FAQs
Refund compensation FAQs
What is Section 171 compensation?
When FBR delays paying a due tax refund, Section 171 entitles you to compensation calculated on the refund amount, for the period of delay, at a notified annual rate.
What rate applies?
The rate is periodically notified and tied to KIBOR plus a margin (commonly cited around 12%, i.e. KIBOR + 0.5%). Confirm the current notified rate for your specific period.
From when are days counted?
Typically from the date the refund became due (e.g. after the statutory processing period) to the date it is actually paid — enter both dates to see the days of delay.
Do I need to claim this separately?
Compensation for delayed refunds is often adjusted automatically with the refund payment, but tracking and following up with FBR is recommended if it doesn't appear.
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