Resident individuals and AOP members required to submit wealth statement and reconciliation; incomplete returns may be treated as invalid
ISLAMABAD: The Federal Board of Revenue (FBR) has reminded taxpayers that every resident individual filing an income tax return for Tax Year (TY) 2026 must also submit a wealth statement along with a wealth reconciliation statement, warning that returns filed without the required reconciliation may be treated as invalid.
The requirement is prescribed under Section 116 of the Income Tax Ordinance, 2001, which governs the submission of wealth statements by individual taxpayers and members of Associations of Persons (AOPs).
Wealth Statement Mandatory for Resident Individuals
According to the FBR, every resident individual required to file an income tax return must furnish both a wealth statement and a wealth reconciliation statement together with the annual return.
The obligation also extends to every member of an Association of Persons (AOP), who must submit a wealth statement and wealth reconciliation statement alongside the association’s return of income.
The tax authority has emphasised that failure to provide the required reconciliation may result in the return being regarded as incomplete and, consequently, invalid under the law.
Information Required in the Wealth Statement
Section 116 requires taxpayers to disclose comprehensive details of their financial position, including:
• Total assets, including foreign assets.
• Total liabilities, including foreign liabilities.
• Assets owned by a dependent spouse, minor children and other dependants.
• Assets transferred to another person during the relevant period, along with the consideration received.
• Total expenditure incurred by the taxpayer, dependent spouse, minor children and other dependants.
• A wealth reconciliation statement explaining changes in net wealth during the tax year.
The FBR clarified that a spouse’s assets are required to be disclosed only where the spouse is financially dependent on the taxpayer.
Purpose of the Wealth Reconciliation Statement
The wealth reconciliation statement is intended to reconcile the movement in a taxpayer’s net wealth between the beginning and end of the tax year.
It must account for:
• Income earned during the year.
• Expenditure incurred.
• Acquisition and disposal of assets.
• Changes in liabilities.
• Other adjustments affecting net wealth.
According to the FBR, the reconciliation helps demonstrate that changes in a taxpayer’s financial position are supported by declared income and other legitimate sources.
Revision of Wealth Statement
The Income Tax Ordinance permits taxpayers to revise a wealth statement if they subsequently identify an omission or incorrect information.
However, a revised wealth statement must:
• Be accompanied by a revised wealth reconciliation statement.
• Clearly state the reasons for the revision.
• Be filed in the prescribed manner before the issuance of a notice under Section 122(9) for the relevant tax year.
The law further provides that if the Commissioner determines that the revision is not intended to rectify a genuine omission or error, the revised statement may be declared void after giving the taxpayer an opportunity to be heard.
In addition, a wealth statement cannot be revised after the expiry of five years from the due date for filing the relevant income tax return.
TY 2026 Return Filing Deadlines
The FBR has prescribed the following deadlines for filing income tax returns for Tax Year 2026:
• September 30, 2026: Salaried individuals, business individuals, Associations of Persons (AOPs), and companies with a special tax year.
• December 31, 2026: Companies following the normal financial year ending June 30.
The FBR has advised taxpayers to ensure that all mandatory annexures, including the wealth statement and wealth reconciliation statement, are completed accurately and submitted together with the income tax return to avoid delays in processing or the return being treated as invalid.