Islamabad, October 2, 2025 – The Federal Board of Revenue (FBR) is preparing to invoke strict economic restrictions on individuals who fail to file their income tax returns for the year 2025.
This step comes under the newly introduced Section 114C of the Income Tax Ordinance, 2001, which was added through the Finance Act 2025. Although the clause has been legislated, its enforcement has been delayed pending a formal notification from the government.
FBR sources revealed that once the extended deadline of October 15, 2025, for filing income tax returns expires, the federal government is expected to issue the required notification. This will empower the FBR to enforce restrictions designed to bring more individuals into the tax net and strengthen the economic system of documentation.
What Section 114C Enforces
Section 114C essentially restricts certain high-value economic activities for individuals who are classified as “ineligible persons” due to their failure to file tax returns. Some of the key restrictions include:
• Non-filers will be barred from booking, purchasing, or registering motor vehicles above a specified threshold.
• Applications for buying or transferring immovable property above a certain value will not be processed.
• Investment accounts for securities, mutual funds, or similar instruments will not be opened or maintained if they exceed the prescribed threshold.
• Banks will restrict cash withdrawals from non-filers’ accounts beyond the specified limit.
These restrictions will not apply to non-resident individuals or public companies, except in cases related to high-value cash withdrawals. Moreover, individuals who file wealth statements or sources of investment and expenditure statements with sufficient declared resources will be treated as eligible.
Impact on Economic System
The enforcement of Section 114C is considered a major policy step aimed at discouraging tax evasion and broadening the tax base. By linking high-value transactions with tax compliance, the government hopes to curb the informal economy and promote financial transparency. Analysts believe that such measures will not only ensure fairness in the tax system but also contribute to stronger economic governance.
The move is expected to increase compliance, especially from individuals engaging in high-value purchases such as cars, property, and financial investments. By introducing such targeted economic restrictions, the government aims to balance revenue generation with fiscal discipline.
As the notification is likely to be issued after October 15, all eyes are on how effectively the FBR implements these provisions and whether it can translate into higher tax revenues without disrupting legitimate economic activities.