Islamabad, November 28, 2025 – If you are planning to buy property with cash payment or outside banking channels, the Federal Board of Revenue (FBR) has issued strict tax rules and penalties to ensure compliance. For the tax year 2026, property transactions conducted without proper banking or digital channels will remain illegal and subject to heavy fines.
According to the FBR, any individual purchasing immovable property with a fair market value over PKR 5 million using cash or bearer cheque will face a penalty of 5% of the property value. The value will be determined either by the FBR under Section 68 of the Income Tax Ordinance, 2001, or by the provincial authority for stamp duty purposes—whichever is higher.
Banking Channel Requirements
Under Section 75A of the Income Tax Ordinance, 2001, all high-value purchases must be made through:
• Crossed cheques drawn from a bank
• Crossed demand drafts or pay orders
• Other approved banking instruments
• Digital transactions showing transfer between bank accounts
These rules apply not only to immovable property worth more than PKR 5 million but also to other assets valued over PKR 1 million.
Consequences of Non-Compliance
If a transaction is made outside the approved banking or digital channels:
• The asset will not qualify for any tax allowances under Sections 22-25 of the Income Tax Ordinance.
• The purchase amount will not be considered as the cost for computing gains upon resale under Section 76.
Takeaways for Buyers
• Check your transaction method: Ensure all high-value property purchases are through banking or digital means.
• Calculate potential penalties: A 5% fine can significantly increase costs if the rules are ignored.
• Plan ahead: Consult your bank or tax advisor before completing property deals to stay compliant.
The FBR emphasizes that adherence to these rules will help improve transparency in real estate transactions and curb tax evasion in Pakistan.
Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice. Readers are advised to consult the Federal Board of Revenue (FBR), their bank, or a certified tax advisor before making any property transactions or financial decisions. The publisher is not responsible for any losses or penalties incurred due to reliance on this information.