ISLAMABAD: The government has enacted a law to report bank transaction data worth Rs 100 million, which will be applicable from July 1 (Today).
According to the details, the federal government has introduced strict and latest legal procedures to prevent tax evasion in the country.
Under the Finance Act 2026, from July 1, the data of all bank account holders whose bank deposits or withdrawals during a 6-month period exceed Rs 100 million (100 million) will be provided for digital scrutiny.
According to the Finance Act 2026 issued yesterday, a new clause “Section 165AB” has been added to the Income Tax Ordinance 2001, titled “Reporting of financial transaction data by banking companies and financial institutions”.
Under the new law, all banking companies will be required to electronically upload certain financial transaction data to a “central data hub” regardless of other banking or financial laws, so that banking and tax information can be compared through computer algorithms.
What information will be shared?
Banks will share data on account holders who have transactions of Rs 100 million or more in any or all of their bank accounts in a cumulative period of 6 months.
The data to be shared includes details of deposits and withdrawals, opening and closing balances of the account, peak credit (the highest amount available in the account during the reporting period) and total credit.
This reporting will be done in two parts of the financial year, the data for the first period (July 1 to December 31) will be required to be provided by January 31, while the data for the second period (January 1 to June 30) will be required to be provided by July 31. This law covers all types of accounts including current, savings, fixed and term deposits.
According to the law, the information shared by the banks will be processed in a completely digitalized manner and during the cross-matching stage, this data will remain out of the reach of the income tax authorities, so that there is no element of blackmail or harassment.
If the system finds a major discrepancy between the tax records and bank balance of an account holder, the FBR’s automated digital system will forward the case to the “National Faceless Center” for further legal action through the ‘Compliance Risk Management’ system.
Under this law, the State Bank of Pakistan may also establish a secure, centralized and virtual database to store financial transactions and records of individuals held with scheduled banks.
The Federal Board of Revenue has been mandated to ensure strict confidentiality of this information received from banks and to prevent any misuse or disclosure of this data except in accordance with the law.
