Pakistan Enforces New Bank Transaction Reporting Rules for Accounts Exceeding Rs100 Million
Islamabad:** The federal government has implemented a new legal framework requiring banks to report high-value financial transactions as part of efforts to strengthen tax compliance and curb tax evasion. The new rules came into effect on **July 1** under the **Finance Act 2026**.
Under the legislation, banks and financial institutions must electronically submit data on account holders whose cumulative deposits or withdrawals exceed **Rs100 million (10 crore)** over a **six-month** period for digital scrutiny.
The Finance Act 2026 introduces **Section 165AB** into the **Income Tax Ordinance, 2001**, titled **”Reporting of Financial Transaction Data by Banking Companies and Financial Institutions.”** The provision requires banks to upload specified financial transaction data to a **Central Data Hub**, where it will be digitally compared with taxpayers’ records using automated algorithms.
The information to be reported includes:
* Total deposits and withdrawals during the reporting period.
* Account opening and closing balances.
* Peak credit (the highest balance maintained during the period).
* Total credits received in the account.
The reporting requirement applies across **all types of bank accounts**, including current, savings, fixed deposit, and term deposit accounts.
Banks will submit data twice each financial year. Transactions from **July 1 to December 31** must be reported by **January 31**, while transactions from **January 1 to June 30** must be submitted by **July 31**.
According to the law, the data will be processed through a fully digital system, and tax officials will not have direct access to the information during the initial cross-matching stage. The government says this safeguard is intended to prevent misuse of financial data, including harassment or unauthorized disclosure.
If the automated system identifies a significant discrepancy between a taxpayer’s declared income and banking activity, the case will be referred through the **Compliance Risk Management System** to the **National Faceless Centre** for further legal action.
The law also authorizes the **State Bank of Pakistan** to establish a secure, centralized virtual database to safeguard financial transaction records maintained by scheduled banks. The **Federal Board of Revenue (FBR)** has been directed to ensure the confidentiality of all reported information and prevent its misuse or disclosure except as permitted under the law.
