Filing an accurate wealth statement is not just a formality—it is a legal requirement that can protect you from scrutiny, penalties, and enforcement action by the Federal Board of Revenue (FBR). Under the Income Tax Ordinance, 2001, the FBR has clearly defined what a valid wealth statement must include for each tax year.
If you are an individual taxpayer in Pakistan, here is a complete, easy-to-follow guide to what your wealth statement must contain and why it matters.
📌 What Is a Wealth Statement and Why Is It Important?
A wealth statement explains how your assets match your declared income. Even if your income is low, unexplained assets or expenses can trigger an FBR notice. That’s why the wealth statement and its reconciliation are critical parts of your annual income tax return.
According to Section 116 of the Income Tax Ordinance, 2001, every resident individual filing a return must submit a wealth statement and reconciliation.
🧾 Mandatory Components of a Valid Wealth Statement
1 Your Total Assets and Liabilities
You must declare all assets and liabilities, both local and foreign, held on the specified date. This includes:
• Bank balances
• Property and plots
• Vehicles
• Investments (shares, mutual funds, bonds)
• Cash in hand
• Loans payable or receivable
👉 Foreign assets and foreign liabilities must also be disclosed.
2 Assets of Spouse, Children, and Dependents
You are required to report:
• Assets and liabilities of your dependent spouse
• Assets of minor children
• Assets of other financial dependents
🔍 Important clarification:
Assets of a spouse are included only if the spouse is dependent on you.
3 Assets Transferred During the Year
You must disclose:
• Any asset (local or foreign) transferred to another person
• The consideration received against that transfer
This helps FBR track gifting, sales, and possible tax avoidance.
4 Total Expenditures for the Year
Declare all major expenses incurred by:
• Yourself
• Your spouse
• Minor children
• Other dependents
Examples include:
• Household expenses
• Education and medical costs
• Travel and foreign trips
• Utility bills
• Major purchases
📊 These expenses must logically match your income and savings.
5 Wealth Reconciliation Statement
This is one of the most critical sections.
It explains:
• Opening wealth
• Income earned during the year
• Expenses incurred
• Closing wealth
Any unexplained increase in wealth can lead to an FBR audit or notice.
📝 Who Is Required to File a Wealth Statement?
• Every resident individual taxpayer
• Members of an Association of Persons (AOP) must also file their personal wealth statement along with the AOP return
🔄 Can You Revise a Wealth Statement?
Yes. If you discover:
• An omission
• A wrong statement
You may file a revised wealth statement, along with:
• Revised reconciliation
• Reasons for revision
• Intimation to the Commissioner
⏳ Time limit:
A wealth statement cannot be revised after five years from the due date of the return.
⚠ If the FBR believes the revision is not bona fide, it can be declared void after giving you a chance to be heard.
✅ Key Takeaway
A complete, accurate, and well-reconciled wealth statement is your best defense against FBR action. Missing assets, unexplained expenses, or incorrect reconciliation can result in notices, penalties, or audits.
📌 Pro tip:
Before filing, cross-check your income, expenses, and asset growth carefully—or consult a tax professional to stay compliant and stress-free.
Disclaimer: This article is for general information purposes only and does not constitute legal, tax, or financial advice. Tax laws and FBR regulations may change, and their application can vary based on individual circumstances. Readers are advised to consult a qualified tax professional or legal advisor before filing their income tax return or wealth statement.