Pakistan’s tax landscape is rapidly evolving, and NADRA is no longer limited to issuing CNICs. Under the Income Tax Ordinance, 2001, NADRA has been empowered to share data, analyze wealth patterns, and even compute indicative tax liability, making it a powerful partner of the Federal Board of Revenue (FBR).
This development has major implications for taxpayers, non-filers, and those outside the tax net.
🔍 What Is Section 175B of the Income Tax Ordinance?
Section 175B authorizes the National Database and Registration Authority (NADRA) to assist FBR in broadening the tax base and enforcing tax laws by sharing records and advanced data analysis.
📊 What Information Can NADRA Share with FBR?
Under subsection (1), NADRA may share any records or information it holds with FBR, either on its own initiative or upon request. This includes:
• Identity and demographic data
• Assets and properties
• Financial transactions and expenditures
• Liabilities and declared wealth
🧠 NADRA’s Expanded Role: Beyond Data Sharing
Section 175B(2) allows NADRA to actively assist FBR by:
✅ Identifying Tax Gaps
NADRA may identify persons (taxpayers or non-taxpayers) who have:
• Undeclared or under-declared income
• Assets or properties escaping assessment
• Excessive refunds or relief
• Misclassification of income
💰 Valuation of Assets
If asset values declared by a person differ from:
• Values notified by FBR, or
• District/market values
NADRA can flag such discrepancies.
🤖 AI-Based Tax Liability Computation
One of the most significant changes is in Section 175B(4):
👉 NADRA can compute indicative income and tax liability using:
• Artificial Intelligence
• Statistical and mathematical models
• Modern data analytics tools
This applies to both filers and non-filers.
📩 What Happens After NADRA Computes Tax?
Step 1: Notification
FBR will notify the person of the indicative tax liability computed by NADRA.
Step 2: Payment Option
The person may:
• Accept and pay the liability
• Avail installments
• Receive discounts or relief from penalties and default surcharge (as prescribed)
Step 3: Consequences of Non-Payment
If the liability is not paid within the prescribed time:
• FBR may initiate enforcement action
• Proceedings will be based on NADRA’s computed liability
🧾 Legal Status of Payment
If the person pays the computed liability, it will be treated as:
• An amended assessment under Section 120, 122, or 122(4)
This means the tax matter becomes legally settled.
⚠ Why This Matters for Tax Year 2026
• Non-filers are now easily traceable
• Asset-based taxation is becoming data-driven
• Digital footprints matter more than declarations
• Voluntary compliance is strongly encouraged
✅ Key Takeaway
Section 175B marks a paradigm shift in Pakistan’s tax enforcement. NADRA is no longer a passive data holder—it is now an active tax intelligence authority. Taxpayers should ensure their income, assets, and lifestyle align with their tax declarations to avoid automated tax exposure in tax year 2026.
📌 Disclaimer: This article is for general information and educational purposes only and does not constitute legal, tax, or professional advice. Tax laws, interpretations, and enforcement practices may change or vary based on individual circumstances. Readers are advised to consult a qualified tax professional or refer to the Income Tax Ordinance, 2001 and official FBR notifications before making any tax-related decisions.