The wealth statement is one of the most important — and most misunderstood — parts of the FBR income tax return in Pakistan. A single error in your wealth statement can trigger an FBR Section 111 notice. This guide covers everything you need to declare, common mistakes, and how to reconcile your wealth correctly.
Kamboh Associates provides expert FBR tax compliance services in Pakistan. Income tax filing from Rs. 3,500, NTN registration from Rs. 2,000, company incorporation from Rs. 15,000. WhatsApp 0328-4675162.
What is a Wealth Statement in Pakistan?
The wealth statement (officially called Statement of Assets and Liabilities) is a mandatory schedule in your FBR IRIS income tax return. It lists all your assets and liabilities as at 30 June each year. FBR compares your closing wealth each year against your opening wealth plus declared income to check if all wealth is explained by lawful income sources.
The fundamental rule: Opening Wealth + Total Inflows = Total Expenditure + Closing Wealth. Any gap — where closing wealth exceeds opening wealth plus income — is an "unexplained increase" that triggers Section 111.
What Must Be Declared in the Wealth Statement
Assets to Include
| Asset Type | What to Declare | Valuation Basis |
|---|---|---|
| Immovable property (plots, houses, commercial) | Each property separately with location | FBR prescribed DC rate or cost price, whichever is higher |
| Vehicles | Every vehicle in your name — make, model, year | Registration/purchase cost |
| Cash in hand | Physical cash held at 30 June | Actual amount |
| Bank accounts | All accounts — savings, current, USD accounts | Balance at 30 June |
| Investments | Shares, mutual funds, prize bonds, NSCs, DSCs | Face value or market value |
| Business capital | Net investment in proprietorship or partnership | Book value |
| Loans receivable | Money you have lent to others | Outstanding amount |
| Gold and jewelry | Weight and value | Current market value |
| Foreign assets | All assets outside Pakistan | Market value in PKR equivalent |
Liabilities to Include
- Bank loans (personal, housing, vehicle, business)
- Credit card outstanding balances
- Loans from friends, family, or third parties
- Advance rent or security deposits received
- Tax payable as of year end
How Wealth Reconciliation Works
FBR checks your wealth statement using this formula:
| Component | Description |
|---|---|
| Opening Net Worth | Closing net worth from last year's return |
| Plus: Total Income Declared | All income from your return (salary, business, rent, etc.) |
| Plus: Gifts/Inheritance Received | Must be documented |
| Plus: Loans Received | Must be from documented sources |
| Minus: Total Expenditure | Household expenses, rent paid, education, travel |
| Minus: Loans Repaid | Bank EMIs, personal loan repayments |
| = Closing Net Worth | Must match assets minus liabilities at 30 June |
Any shortfall — where calculated closing wealth is more than you can explain — will be flagged by FBR's CREST system and may result in a FBR notice defense.
Most Common Wealth Statement Mistakes
- Forgetting spouse's assets: A wife's property or bank account not declared on the husband's return causes mismatch
- Not declaring property at FBR value: Use the higher of FBR DC value or actual purchase cost
- Ignoring minor children's assets: Property, accounts, or investments in children's names must be included
- Underestimating household expenses: Very low personal expenses invite scrutiny — be realistic
- Forgetting foreign accounts: Foreign bank accounts and overseas property must be declared. Failure is treated as tax evasion
- Not explaining large bank credits: Every significant bank credit must match either declared income, a documented loan, or a documented gift
- First-year filers not filing prior wealth: The opening balance for your first return should reflect your actual wealth at the start of that year — many first-time filers understate this, making later years impossible to reconcile
Frequently Asked Questions
Get Your Wealth Statement Filed Correctly
Kamboh Associates reviews and files wealth statements for individuals and businesses. A correctly filed wealth statement protects you from Section 111 notices.
WhatsApp Now — 0328-4675162Income Tax in Pakistan — Comprehensive 2026-27 Guide
Pakistan's income tax system is governed by the Income Tax Ordinance 2001 (amended through Finance Acts). The tax year runs from July 1 to June 30, and returns are due by September 30. Understanding how income is classified and taxed is essential for every salaried person, business owner, and investor.
Tax Slabs 2026-27 — Salaried Individuals
| Annual Taxable Income | Tax Rate |
|---|---|
| Up to Rs.600,000 | 0% |
| Rs.600,001 to Rs.1,200,000 | 2.5% of amount exceeding Rs.600,000 |
| Rs.1,200,001 to Rs.2,200,000 | Rs.15,000 plus 12.5% exceeding Rs.1,200,000 |
| Rs.2,200,001 to Rs.3,200,000 | Rs.140,000 plus 20% exceeding Rs.2,200,000 |
| Rs.3,200,001 to Rs.4,100,000 | Rs.340,000 plus 25% exceeding Rs.3,200,000 |
| Rs.4,100,001 to Rs.6,000,000 | Rs.565,000 plus 32.5% exceeding Rs.4,100,000 |
| Above Rs.6,000,000 | Rs.1,182,500 plus 35% exceeding Rs.6,000,000 |
Tax Exemptions and Deductions Available
- Zakat paid through official channels — fully deductible
- Donations to approved NPOs/NGOs — up to 30% of taxable income
- Medical allowance — exempt up to 10% of basic salary (if not on medical scheme)
- Life insurance premium — 100% deductible (if eligible plan)
- Pension contributions — deductible under Section 60
Tax Credits That Reduce Your Tax Bill
Unlike deductions (which reduce income), tax credits reduce the tax itself:
- Section 62 — Investment in shares/equity mutual funds: credit up to Rs.150,000
- Section 63 — Contribution to approved pension fund: up to 20% of income for under-40s
- Section 64 — Premium on life insurance / health insurance: deductible
How to File Your Income Tax Return
- Login to IRIS (iris.fbr.gov.pk) with your NTN and password
- Select the relevant tax year from the Returns menu
- Enter income details across all categories (salary, business, property, capital gains)
- Complete wealth statement (assets and liabilities as of June 30)
- Review tax computation and pay any balance due via CPR challan
- Submit and save your acknowledgment receipt
Kamboh Associates provides end-to-end income income tax return filing. Call 0328-4675162 for same-day filing service.
Frequently Asked Questions — Income Tax Pakistan 2026
Who is required to file an income tax return in Pakistan?
Under Section 114 of the Income Tax Ordinance, you must file a return if: your income exceeds Rs.600,000 in a year; you own immovable property with an area of 500 square yards or more; you own a motor vehicle with engine capacity of 1000cc or above; you have obtained a commercial or industrial electricity connection; you are registered for sales tax; or you have received a prize bond prize above Rs.10,000. Even if none of these apply, filing a return helps you get on the ATL and reduces withholding taxes.
What is the deadline to file income tax return in Pakistan for 2026?
For individuals (salaried and business), the deadline to file the income tax return for tax year 2026 (July 2025 – June 2026) is September 30, 2026. For companies (AOPs, private limited), the deadline is December 31, 2026. These deadlines can be extended by FBR notification. Late filing after the deadline attracts a penalty of Rs.1,000 per month (individual) or Rs.10,000 per month (company) plus 0.1% of tax per day.
Can I file my own income tax return on IRIS without a consultant?
Yes. FBR's IRIS portal allows individuals to file returns themselves. The process involves: creating an account at iris.fbr.gov.pk using your CNIC, completing the income return form (declaring all income sources), filling in the wealth statement (all assets and liabilities), computing tax, paying via 1-Bill or bank challan if any tax is due, and submitting. However, if you have multiple income sources, foreign assets, business income, or have received notices, professional help is strongly recommended to avoid errors.
What is the wealth statement and who must file it?
The wealth statement (filed under wealth statement preparation) is a declaration of all your assets and liabilities as of June 30 of the tax year. Everyone who files a return must also file the wealth statement. It includes: property (residential, commercial, agricultural), vehicles, bank balances, investments, business capital, cash in hand, jewelry, and all liabilities (loans, mortgages). The difference between opening and closing wealth should be explainable by your declared income minus living expenses. Unexplained increases trigger notices under Section 111.
How can I reduce my income tax legally in Pakistan?
Legal tax reduction strategies include: investing in approved pension funds (up to 20% of income deductible under Section 63); investing in equity mutual funds or shares listed on PSX (tax credit up to Rs.150,000 under Section 62); paying health/life insurance premiums (deductible under Section 62); making charitable donations to FBR-approved organizations (up to 30% deductible); paying Zakat through official channels (directly deductible from tax); and claiming all legitimate business expenses if self-employed. These strategies can legally reduce your tax bill by Rs.50,000-Rs.300,000 depending on income level.
File Your Income Tax Return — Same Day Service
Kamboh Associates files income tax returns for salaried individuals, freelancers, business owners, and companies. Professional filing starts at Rs.3,000.
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