If you are a resident taxpayer in Pakistan with overseas income or assets, filing a foreign income and assets statement is not optional—it is a legal obligation under the Income Tax Ordinance, 2001. Failure to comply can trigger enforcement action by the Federal Board of Revenue (FBR), especially from tax year 2026 onward.
Here’s an interactive, reader-friendly guide to help you quickly determine whether this requirement applies to you and what you must disclose.
✅ Do You Need to File a Foreign Income and Assets Statement?
Ask yourself these simple questions:
👉 Are you a resident individual of Pakistan?
👉 Did you earn foreign income of USD 10,000 or more during the tax year?
👉 Do you own foreign assets worth USD 100,000 or more at year-end?
✔ If the answer to any of these is “yes,” you are required to file a Foreign Income and Assets Statement under Section 116A.
📜 Legal Basis: Section 116A Explained
According to Section 116A of the Income Tax Ordinance, 2001, every resident individual meeting the prescribed threshold must file a separate statement in the prescribed form and manner, verified as required by law.
🧾 What Must Be Declared in the Statement?
1 Total Foreign Assets and Liabilities
You must disclose all foreign-held:
• Bank accounts
• Properties
• Investments
• Loans and liabilities
📅 These must be reported as of the last day of the tax year.
2 Foreign Assets Transferred During the Year
Declare:
• Any foreign asset transferred to another person
• The consideration received for that transfer
This applies to gifts, sales, or any other form of transfer.
3 Complete Details of Foreign Income and Expenses
You must report:
• Source-wise foreign income
• Expenditure incurred to earn that income
• Expenses wholly and necessarily related to deriving foreign income
🔍 Transparency is key—unexplained income or mismatched expenses may raise red flags.
⚠ What If You Don’t File?
Under Section 116A(2):
• The Commissioner Inland Revenue may issue a notice
• If the Commissioner believes (with recorded reasons) that you were required to file but failed to do so, you can be compelled to submit the statement by a specified date
🚨 From tax year 2026, FBR has indicated stricter monitoring and enforcement for undisclosed foreign income and assets.
🧠 Why This Matters
Pakistan is part of global information-sharing frameworks. Foreign bank accounts, investments, and income can be traced through international data exchange mechanisms. Non-disclosure can lead to:
• Tax notices
• Penalties
• Audit proceedings
✅ Final Takeaway
If you are a resident of Pakistan with foreign income of USD 10,000 or more or foreign assets valued at USD 100,000 or above, filing a foreign income and assets statement is mandatory. Timely and accurate disclosure is the safest way to remain compliant and avoid FBR action.
📌 Pro tip:
If you are unsure about valuation, residency status, or reporting requirements, consult a qualified tax advisor before filing your return.
Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Tax obligations may vary based on individual circumstances, residency status, and changes in law. Readers should consult a qualified tax advisor or legal professional to ensure compliance with FBR requirements and the Income Tax Ordinance, 2001.