New Tax Rule: Banks Must Report Transactions of Rs100 Million or More to FBR

The federal government has introduced a major tax compliance measure under the Finance Act 2026, requiring banks and financial institutions to report high-value banking transactions to the Federal Board of Revenue (FBR). The new law came into effect on July 1, 2026, and aims to curb tax evasion, improve financial transparency, and strengthen Pakistan’s tax system.

In accordance with the newly inserted Section 165AB of the Income Tax Ordinance, 2001, all banking companies and financial institutions required to electronically provide information on specified financial transactions through a centralized electronic data hub.

Banks to Report Transactions of Rs100 Million or More

The new rules will mandate that banks report anyone who deposits and withdraws Rs. 100 million or more in one or more bank accounts over a six-month period or longer.

The reporting requirement applies to all major account types, including:

• Current accounts
• Savings accounts
• Fixed deposit accounts
• Term deposit accounts

The submitted information will include:

• Total deposits
• Total withdrawals
• Opening account balance
• Closing account balance
• Highest account balance (peak credit)
• Total amount credited during the reporting period

FBR Bank Reporting Schedule

The reporting process will be carried out twice every year.

Reports of financial data for the period 1 July to 31 December should submitted by 31 January, and 1 January to 30 June by 31 July to the central data hub.

Automated System to Protect Taxpayer Data

The government announce that the entire banking data will handled by a completely automated digital system to protect the confidentiality of information and to minimize the use of humans.

In the early deployment period, individual tax officers will not be able to directly access the submitted financial information. This measure intended to safeguard taxpayer privacy and reduce the risk of abuse or harassment of taxpayers.

FBR to Investigate Suspicious Financial Activity

If there any substantial disparity between the banking activities of an individual and his/her tax declaration, the case will automatically forwarded to the FBR’s National Faceless Centre for further investigation.

The government positions itself as a leader in implementing this technology-driven solution for better tax compliance and a more transparent and neutral audit process.

State Bank to Maintain Central Financial Database

State Bank of Pakistan (SBP) has empowered to create and operate a robust centralized virtual system of financial transaction records.

The new reporting framework will leave the FBR with the responsibility for maintaining confidentiality, security and protection of all financial information submitted.

Government Aims to Strengthen Tax Transparency

The new bank transaction reporting law falls under the government’s overall efforts to broaden the tax base, fight tax evasion, and improve transparency in the financial system in Pakistan. The automated data analysis process will help the authorities increase compliance without compromising the privacy of account holders.