Section 116 of the Income Tax Ordinance allows the FBR to seek detailed information on taxpayers’ assets, liabilities, expenditure and wealth reconciliation for Tax Year 2027.
ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered to require individuals to submit wealth statements for Tax Year 2027, covering the period from July 1, 2026, to June 30, 2027.
The authority is provided under Section 116 of the Income Tax Ordinance, 2001, updated up to June 30, 2026, for Tax Year 2027.
Under the provision, the Commissioner may issue a written notice requiring an individual to furnish a wealth statement in the prescribed form and manner by a specified date.
The statement may include details of a taxpayer’s total assets and liabilities, including foreign assets and liabilities, as of the dates specified in the notice. It may also cover the assets and liabilities of the taxpayer’s spouse, minor children and other dependants.
However, the Ordinance clarifies that a spouse’s assets are required to be included only where the spouse is dependent on the taxpayer.
The FBR may also require taxpayers to provide details of assets, including foreign assets, transferred to another person during the specified period, along with the consideration received.
Details of expenditure incurred by the taxpayer, spouse, minor children and dependants may also be required under the provision.
Wealth reconciliation statement
A wealth reconciliation statement is also a mandatory component of the filing requirements.
Section 116 further provides that every resident individual taxpayer who files an income tax return must submit a wealth statement and wealth reconciliation statement alongside the return.
Members of an association of persons are similarly required to furnish these statements with the association’s income tax return.
Taxpayers who identify an omission or incorrect statement may submit a revised wealth statement and wealth reconciliation statement, along with the reasons for the revision, before receiving a notice under Section 122(9).
However, the Commissioner may declare a revision void if it is determined that the amendment does not correct a genuine omission or error. The taxpayer must be given an opportunity to be heard before such a decision is made.
The law also sets a limit on revisions, stating that a wealth statement cannot be revised after five years from the due date for filing the income tax return for the relevant tax year.
The provisions give the FBR a mechanism to seek detailed information on taxpayers’ domestic and foreign assets, liabilities and expenditure as part of the wealth declaration and reconciliation process for Tax Year 2027.