The Federal Board of Revenue (FBR) has the authority to require individuals to submit detailed 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, which allows the Commissioner to issue a written notice requiring an individual to furnish a wealth statement in the prescribed form and manner by a specified date. The provision gives the tax authority a mechanism to obtain detailed information about an individual’s financial position as part of the wealth declaration and reconciliation process.
Under Section 116, a wealth statement can include information about a taxpayer’s total assets and liabilities as of the dates specified in the notice. The information may cover both assets and liabilities located within Pakistan and those held outside the country. This means that where a notice is issued under the relevant provision, taxpayers can be required to provide details of their foreign assets and liabilities alongside their domestic financial holdings. The information requested is intended to provide a broader picture of the taxpayer’s financial position for the relevant period.
The scope of information that can be sought may also extend to certain family members and dependants. A wealth statement can include details concerning the assets and liabilities of the taxpayer’s spouse, minor children and other dependants. However, the law provides a specific condition concerning a spouse’s assets, requiring them to be included only where the spouse is dependent on the taxpayer. This distinction determines when information relating to a spouse’s financial position falls within the wealth statement requirements.
The FBR may also seek information regarding assets that were transferred to another person during the period specified in the notice. This can include foreign assets transferred during the relevant period, along with details of the consideration received in connection with such transfers. The provision enables the tax authority to obtain information beyond assets held by a taxpayer at a particular point in time and can cover transactions involving the transfer of assets during the period under review.
Taxpayers may additionally be required to provide details of expenditures incurred by themselves, their spouse, minor children and dependants. Expenditure information forms part of the wider wealth reconciliation process because changes in wealth need to be considered alongside income and spending during a tax period. The requirement allows the information contained in a wealth statement to provide a more detailed account of the taxpayer’s financial position and changes during the relevant tax year.
Section 116 also establishes a filing requirement for resident individual taxpayers who submit an income tax return. Such taxpayers are required to furnish a wealth statement and a wealth reconciliation statement along with their income tax return. Members of an association of persons are similarly required to submit the relevant statements along with the association’s income tax return. These requirements form part of the broader framework through which taxpayers declare their financial position and reconcile changes in wealth with reported income and expenditure.
The law also provides taxpayers with an opportunity to correct an omission or incorrect statement in a previously submitted wealth declaration. Where a taxpayer identifies an error or omission, a revised wealth statement and wealth reconciliation statement can be submitted along with the reasons for making the revision. This revision can be made before the taxpayer receives a notice under Section 122(9). The mechanism allows taxpayers to correct genuine inaccuracies in their declarations before the relevant notice is issued.
The Commissioner has the authority to declare a revision void if it is determined that the amendment does not correct a genuine omission or error. However, the taxpayer must first be provided an opportunity to be heard before such a revision is declared void. The provision establishes a process through which the tax authority can examine revisions while allowing taxpayers an opportunity to explain the reasons behind the changes made to their wealth statements.
There is also a time limit on revisions to wealth statements. Under the relevant provisions, a wealth statement cannot be revised after five years from the due date for filing the income tax return for the relevant tax year. This limitation establishes a defined period within which taxpayers can revise their wealth declarations under the applicable rules.
For Tax Year 2027, the provisions give the FBR a legal mechanism to seek detailed information concerning taxpayers’ domestic and foreign assets, liabilities, asset transfers and expenditures. The requirements form part of the wealth declaration and reconciliation framework under the Income Tax Ordinance, 2001, allowing the tax authority to examine declared wealth alongside income and expenditure information.
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