Businesses must maintain records of income, expenses, sales, purchases, assets and liabilities, with FBR requiring documents to be retained for at least six years.
ISLAMABAD: The Federal Board of Revenue (FBR) has prescribed mandatory record-keeping requirements for businesses for Tax Year 2027, outlining the books of account, documents and financial records taxpayers must maintain.
The FBR issued the Income Tax Rules, 2002, updated up to September 15, 2026, for Tax Year 2027, covering the period from July 1, 2026, to June 30, 2027.
Under Rule 29, every taxpayer deriving income chargeable under the head of “Income from Business” must maintain proper books of account, documents and records covering all business transactions.
The requirements include records of:
• All money received and expenditure incurred, including the relevant details.
• Sales and purchases of goods, as well as services provided and obtained.
• All business assets and liabilities.
• Costs relating to materials, labour and other inputs for assembly, production, processing, manufacturing, mining and similar activities.
The rules also allow taxpayers using fiscal electronic cash registers or computerised accounting software to issue cash memos, invoices and receipts generated through these systems.
Taxpayers must retain duplicate copies and electronic or computerised records of cash memos, invoices, receipts and patient slips issued under the rules.
Under Rule 29(4), businesses are required to preserve their books of account, documents and records for six years after the end of the relevant tax year.
However, this retention period does not end where proceedings under the Income Tax Ordinance, 2001, remain pending before an authority or court. In such cases, taxpayers must preserve the relevant records until a final decision is issued.