Section 165AB requires banks and electronic money institutions to upload financial data for accounts exceeding Rs100 million in deposits or withdrawals for automated tax compliance checks.
The Federal Board of Revenue (FBR) has established rules requiring banks and electronic money institutions (EMIs) to report account information where deposits or withdrawals exceed Rs100 million during a reporting period in Tax Year 2027.
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According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, Section 165AB requires financial institutions to electronically upload the specified information to the FBR’s Central Data Hub for automated cross-matching of tax and banking records.
The provision applies to the tax year running from July 1, 2026, to June 30, 2027. The reporting threshold covers deposits or withdrawals exceeding Rs100 million across any or all bank accounts maintained by an account holder.
The information must include details of deposits and withdrawals, opening and closing balances, peak credits and total credits during the relevant reporting period.
Under Section 165AB, the information is digitally processed and remains inaccessible to Income Tax authorities during the cross-matching process. Where a significant mismatch is identified, the system may transfer the relevant information to the FBR’s Compliance Risk Management (CRM) system for further proceedings through the National Faceless Centre.
The law also requires the FBR to maintain strict confidentiality of the information received from banks and prohibits its disclosure or misuse, subject to the provisions of the section.
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The reporting period is divided into two six-month periods: July 1 to December 31 and January 1 to June 30. The specified reporting dates are January 31 for the period ending December 31 and July 31 for the period ending June 30.
The provision defines accounts broadly to include current, call, savings, fixed and term deposits, as well as other forms of deposits.
Peak credits refer to the highest credit balance across an account holder’s bank accounts on any given date during the reporting period.
The framework is intended to help identify potential tax compliance risks, including under-reported income, undeclared assets, understated sales and overstated expenses.