The Federal Board of Revenue has issued detailed rules on FBR economic transaction limits for individuals who fail to declare their income sources or investments under the Finance Act 2025.
Through an income tax circular (1 of 2025), the FBR has outlined the framework for implementing FBR economic transaction limits. Introduced via section 114C of the Finance Act 2025, this new provision defines who qualifies as an eligible or ineligible person based on declared financial resources in wealth statements or investment source documents.
To conduct specified economic transactions, a person must have sufficient resources declared in their latest wealth statement or source of investment and expenditure statement. The FBR defines sufficient resources as 130 percent of cash and cash equivalent assets, which include local or foreign currency, gold’s fair market value, stocks, bonds, receivables, and other prescribed cash-equivalent assets.
High-Value Economic Transactions Restricted
Economic transactions, such as buying vehicles worth over Rs7 million, purchasing property valued above Rs100 million, and investments exceeding Rs50 million in securities or mutual funds, will be restricted under these rules. However, investments up to Rs50 million must be new and not sourced from existing liquidated assets or profits.
The FBR economic transaction limits also restrict cash withdrawals exceeding Rs100 million from bank accounts. Additionally, transactions involving declared capital assets will count towards cash-equivalent assets to assess eligibility.
Immediate family members, including parents, spouse, and dependent children, will also be considered eligible if the individual meets the financial capacity requirements. These restrictions will not apply to non-resident individuals or public companies, except for cash withdrawals.
The FBR clarified that these new provisions will take effect from a date to be officially notified by the federal government through the Gazette.