The clock is ticking for the 2025 return filing season, and thousands of taxpayers are rushing to get their paperwork in order. But here’s a question for you: Do you actually know what a wealth statement is, and why it can make or break your return filing?
If your answer is “sort of” or “not really,” you’re not alone. Many people focus on income details but forget that under Section 114 of the Income Tax Ordinance, 2001, submitting a wealth statement under Section 116 is a legal requirement for individuals. Skip it, and your return simply isn’t complete.
Let’s break it down in simple terms.
What Exactly is a Wealth Statement?
Think of it as a full financial selfie of your life at a certain date — not just your income, but your assets, liabilities, and expenditures. The Federal Board of Revenue (FBR) wants the big picture.
Under Section 116, your wealth statement must:
1. List all your assets (including foreign assets) and liabilities (including foreign liabilities) on the specified date.
2. Cover your family’s finances – including spouse, minor children, and other dependents (but only if they are financially dependent on you).
3. Disclose transfers – if you moved any asset to someone else during the specified period, you must state what it was and what you got in return.
4. Report all expenditures – yours, your spouse’s, and your dependents’, along with details.
5. Include a reconciliation – basically, explain the changes in your wealth from last year to this year.
Do You Need to File One Every Year?
Yes, if you are a resident taxpayer filing an income tax return, you must also submit your wealth statement and a wealth reconciliation statement. The same rule applies to members of an Association of Persons (AOP) — you file it along with the AOP’s return.
Can You Revise It Later?
Yes — but there are rules. If you realize you’ve made an omission or error, you can submit a revised wealth statement before the FBR issues a notice under Section 122(9) for that year. You must also provide reasons for the revision. However, you can’t revise it after five years from the original due date. And if the Commissioner thinks your revision is not genuine, they can declare it void after giving you a chance to explain.
Foreign Income and Assets? There’s a Separate Statement for That
If you have foreign income of at least USD 10,000 or foreign assets worth USD 100,000 or more, you must file a Foreign Income and Assets Statement (Section 116A). This includes:
• All foreign assets and liabilities on the last day of the tax year.
• Any transfers of foreign assets and the consideration received.
• Complete details of foreign income and related expenditures.
The Commissioner can also send you a notice to file it if you fail to do so voluntarily.
Why Ignoring This Could Be Risky
Skipping or misreporting your wealth statement can lead to penalties, legal action, and potential audits. FBR systems are increasingly data-driven, meaning discrepancies between your declared income and your asset growth can trigger red flags.
Action Plan for 2025 Filers
• Start early – don’t leave this until the last week.
• Gather documents – property records, bank statements, loan details, investment statements.
• Check accuracy – especially H.S. codes for any trade-linked transactions or asset details.
• Consult a tax adviser if your finances are complex or involve overseas assets.
Your return is not just about reporting what you earned — it’s about showing where your money is, where it came from, and how it’s growing. This year, make sure your wealth statement is complete, correct, and on time.
Disclaimer: This article is for general informational purposes only and does not constitute legal or tax advice. Readers should consult a qualified tax professional or the Federal Board of Revenue (FBR) for guidance specific to their individual circumstances. The author and publisher are not responsible for any actions taken based on the information provided herein.