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.
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 Section 111 notice.
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.
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