Islamabad: Pakistan’s Finance Act 2026 has introduced a new banking-data reporting system under Section 165AB of the Income Tax Ordinance, 2001. Banks and Electronic Money Institutions (EMIs) are required to electronically upload specified information to a Central Data Hub where banking and tax records will be algorithmically cross-matched. Importantly, the legal threshold is not Rs10 million (Rs1 crore) as claimed in the shared graphic. The law applies where an account holder’s deposits or withdrawals exceed Rs100 million — Rs10 crore — during a six-month reporting period across one or more accounts. The information can include opening and closing balances, deposits and withdrawals, peak credits and total credits. During the initial automated matching stage, the law says the information will not be visible to income-tax authorities.
Where the system detects a gross mismatch between financial activity and available tax information, the case may be fed into FBR’s Compliance Risk Management system, with further proceedings handled through the National Faceless Centre. The framework took effect from July 1, 2026.
