Quick Answer
There is no general tax amnesty scheme in force in Pakistan in 2025. The government has publicly ruled out amnesties, and the Federal Board of Revenue (FBR) has denied that any amnesty for undeclared assets or smuggled vehicles is under consideration. What does exist is a narrower compliance mechanism introduced by the Finance Act, 2025: Section 114C of the Income Tax Ordinance, 2001, which distinguishes between “eligible” and “ineligible” persons and restricts certain high-value economic transactions by those who cannot demonstrate sufficient declared resources. This is not an amnesty in the traditional sense—it does not offer immunity for past non-disclosure or a fixed tax rate on hidden wealth. It is a gatekeeping provision designed to push taxpayers into documenting their financial capacity before they can buy a luxury vehicle, transfer high-value property, invest in securities, or withdraw large amounts of cash. The provision is on the statute book but, as at the date of writing, its commencement is subject to a notification by the Federal Government in the official Gazette.
What the Law Actually Says About Tax Amnesty in 2025
The raw article you may have encountered online claims that a “Pakistan Tax Amnesty Scheme 2025” exists under Sections 238A and 238B of the Income Tax Ordinance, 2001, introduced by a “Tax Laws (Amendment) Act, 2025.” That is incorrect. No such sections or Act exist. The Income Tax Ordinance, 2001 does contain a section 238, but it deals with the repeal of the Income Tax Ordinance, 1979—not with any amnesty scheme. There is no Section 238A or 238B creating an amnesty.
What happened instead is this: through the Finance Act, 2025, Parliament inserted Section 114C into the Income Tax Ordinance, 2001. The FBR subsequently issued Income Tax Circular No. 1 of 2025-26 to explain how the provision works (FBR, 2025). The circular acknowledges that while the FBR has avoided calling the measure an “amnesty,” it has the practical effect of allowing ineligible persons to regularise their position by declaring sufficient resources, without facing inquiries under Section 111 of the Ordinance, which deals with unexplained income and assets (FBR, 2025).
Separately, the Finance Minister and FBR Chairman have repeatedly and publicly stated that no new tax amnesty scheme will be introduced, citing commitments under the IMF programme (Dawn, 2025; Samaa, 2025). The FBR has also issued a formal denial of rumours concerning an amnesty for smuggled vehicles (FBR, 2025).
So the honest position is: there is no amnesty scheme offering immunity for undeclared assets in 2025. There is a new compliance framework under Section 114C that changes how non-compliant persons can transact—and that framework is the real subject anyone concerned about “undeclared assets” needs to understand.
Section 114C: The Real Legal Framework
Purpose and structure
Section 114C is titled “Restriction on economic transactions by certain persons.” It was introduced by the Finance Act, 2025 and operates by dividing taxpayers into two categories:
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Eligible persons — those who have declared sufficient financial resources in their wealth statement, financial statement, or a statement of source of investment and expenditure.
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Ineligible persons — those who have not made such a declaration and are therefore barred from certain high-value transactions.
The provision is supported by the Fifteenth Schedule to the Income Tax Ordinance, 2001, which sets out the monetary thresholds for each restricted transaction (Finance Act, 2025).
Who is an “eligible person”?
A person qualifies as eligible if they can demonstrate “sufficient resources” in one of three ways:
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Resources declared in the wealth statement filed for the latest tax year.
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Resources evident from the financial statement for the tax year immediately preceding the year of the transaction.
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A statement of source of investment and expenditure filed during the year of the transaction showing sufficient resources.
“Sufficient resources” means cash and cash-equivalent assets equal to at least 130% of the value of the intended transaction. Cash and cash equivalents include cash in local or foreign currency, the fair market value of gold, the net realisable value of stocks, bonds, and receivables, and any other prescribed cash-equivalent asset (FBR, 2025).
For individuals, the definition of “eligible person” extends to immediate family members—parents, spouse, and dependent children—provided they meet the resource test (FBR, 2025).
An economic transaction involving the exchange of already declared capital assets is treated as part of cash and cash-equivalent assets to the extent of the value stated in the transaction agreement (FBR, 2025).
Who is an “ineligible person”?
An ineligible person is one who cannot demonstrate the required resources. This will typically include non-filers, late filers, and persons whose declared wealth does not support the transaction they wish to undertake. The FBR’s circular makes clear that the restrictions do not apply to non-resident persons or public companies, except in respect of cash withdrawals (FBR, 2025).
Restricted Transactions and Thresholds
An ineligible person is barred from four categories of economic transaction. The thresholds are set out in the Fifteenth Schedule:
| Transaction | Threshold (ineligible persons are barred above this) |
|---|---|
| Booking, purchase, or registration of a motor vehicle | Invoice value exceeding Rs 7 million for locally manufactured vehicles, or import value as assessed by Customs inclusive of all applicable taxes, duties, levies, and charges |
| Registering, recording, or attesting transfer of immovable property | Fair Market Value exceeding Rs 100 million |
| Investment in securities, debt securities, units of mutual funds, or money market instruments | Acquisition cost exceeding Rs 50 million, subject to the condition that investment up to Rs 50 million must be a new investment in the financial year, excluding reinvestment from liquidation of similar securities or returns on already-held securities |
| Annual cash withdrawal from bank accounts | Exceeding Rs 100 million in aggregate across all bank accounts held by an individual |
(Finance Act, 2025, Fifteenth Schedule; FBR, 2025)
How This Differs From a Traditional Amnesty
A traditional tax amnesty typically offers:
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A fixed tax rate on previously undisclosed assets.
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Immunity from penalties and prosecution for the act of non-disclosure.
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A defined window during which declarations can be made.
Section 114C offers none of these. It does not impose a fixed tax on hidden wealth. It does not grant immunity from prosecution for past evasion. It does not create a declaration window. What it does is create a procedural pathway: a person who wants to make a restricted transaction can file a statement of source of investment and expenditure showing sufficient resources, and those declared resources will not be treated as unexplained income under Section 111. That is a form of protective documentation, not an amnesty.
The distinction matters practically. If you have undeclared assets and you simply file a source-of-expenditure statement to unlock a transaction, you are documenting the resources you are using—you are not getting a clean slate for everything else you may own. And the protection is limited: the declared resources “shall not constitute as nature or sources of income for the purposes of section 111” (FBR, 2025), but the provision does not purport to immunise the underlying acquisition of those resources from scrutiny under other provisions.
Current Status: Not Yet in Force
Section 114C(7) provides that the restrictions “shall come into force on such date as the Federal Government may, by notification in the official Gazette, specify.” At the time of writing, no such commencement notification has been traced. The law is on the statute book, the thresholds are fixed, but the enforcement mechanism has not been activated by notification.
This has practical implications:
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The provision is not yet being enforced by banks, vehicle registration authorities, or property registrars.
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The FBR has reportedly not yet completed the technological changes needed to enforce Section 114C (Profit, 2025).
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Anyone planning a transaction above the thresholds should treat compliance as a precaution rather than an immediate operational requirement—but should monitor the Gazette for the commencement notification.
The precise date of commencement should be confirmed with the FBR at the time of any planned transaction, as this is subject to change.
Practical Steps for Taxpayers
If you are planning a high-value transaction in Pakistan in the near future, the following steps will put you in a defensible position:
1. File your income tax return and wealth statement. The starting point for eligibility is a filed return with a wealth statement showing your declared assets. If you have not filed, do so before the transaction.
2. Calculate your resource coverage. Your declared cash and cash-equivalent assets must equal at least 130% of the transaction value. If you are buying a Rs 10 million vehicle, you need at least Rs 13 million in declared cash and cash equivalents.
3. Prepare a statement of source of investment and expenditure if needed. If your prior-year wealth statement does not show sufficient resources, you can file a statement during the year of the transaction. This statement must demonstrate sufficient resources.
4. Be careful about what you declare. The resources declared in a source-of-expenditure statement will not be treated as unexplained income under Section 111, but that does not mean the declaration has no consequences elsewhere. Take advice on how the declaration interacts with your overall tax position.
5. Confirm the commencement position. Before committing funds, confirm with the FBR whether Section 114C has been notified and is being enforced. The position can change by Gazette notification.
Common Mistakes to Avoid
Relying on internet articles that cite non-existent sections. The claim that Sections 238A and 238B create an amnesty scheme is false. Always check the actual text of the Income Tax Ordinance, 2001 and the Finance Act, 2025.
Assuming an amnesty window is open. No amnesty window is open. If someone offers to “register” your undeclared assets under a 2025 amnesty, verify the legal basis independently.
Ignoring the 130% rule. The resource test is not 100% of the transaction value—it is 130%. A person who has declared exactly the transaction value in cash equivalents will still be ineligible.
Confusing Section 114C with immunity. The provision protects declared resources from being treated as unexplained income under Section 111. It does not grant immunity for the underlying non-disclosure or for other tax offences.
Frequently Asked Questions
Is there a tax amnesty scheme in Pakistan in 2025?
No. The government has ruled out a general amnesty, and the FBR has denied that any amnesty for undeclared assets is under consideration. Section 114C of the Income Tax Ordinance, 2001, introduced by the Finance Act, 2025, is a compliance mechanism, not an amnesty scheme.
What is Section 114C of the Income Tax Ordinance, 2001?
It is a provision that restricts certain high-value economic transactions by “ineligible persons”—those who cannot demonstrate sufficient declared resources. It was inserted by the Finance Act, 2025 and is supported by the Fifteenth Schedule, which sets the monetary thresholds.
Who is an ineligible person under Section 114C?
An ineligible person is one who has not declared sufficient resources in their wealth statement, financial statement, or a statement of source of investment and expenditure. Typically this includes non-filers and persons whose declared wealth does not support the transaction.
What transactions are restricted?
Booking, purchase, or registration of a motor vehicle above Rs 7 million; transfer of immovable property above Rs 100 million; investment in securities or mutual funds above Rs 50 million; and annual cash withdrawals exceeding Rs 100 million.
What does “sufficient resources” mean?
It means cash and cash-equivalent assets equal to at least 130% of the transaction value. Cash equivalents include local and foreign currency, gold, stocks, bonds, receivables, and other prescribed assets.
Is Section 114C currently being enforced?
Not yet. The provision comes into force on a date to be notified by the Federal Government in the official Gazette. No commencement notification has been traced at the time of writing. Confirm the current position with the FBR before transacting.
Does Section 114C give immunity for undeclared assets?
No. It provides that resources declared in a source-of-expenditure statement will not be treated as unexplained income under Section 111. It does not grant immunity for past non-disclosure or for other tax offences.
Does Section 114C apply to non-residents and companies?
The restrictions do not apply to non-resident persons or public companies, except in respect of cash withdrawals.
Can I still buy a car or property if I am a non-filer?
If Section 114C is in force and you are ineligible, you cannot complete the restricted transaction. You would need to become eligible by declaring sufficient resources. Until the provision is notified, the restrictions are not being enforced.
What is the Fifteenth Schedule?
It is a schedule inserted into the Income Tax Ordinance, 2001 by the Finance Act, 2025, setting out the monetary thresholds for the transactions restricted under Section 114C.
Final Takeaway
The “Pakistan Tax Amnesty Scheme 2025” described in some online articles does not exist in the form claimed. There is no amnesty offering immunity for undeclared assets. What exists is Section 114C—a compliance gate that requires taxpayers to demonstrate declared resources before making high-value transactions. The provision is on the statute book but not yet notified for enforcement. If you are planning a significant transaction, the prudent course is to file your return, ensure your wealth statement supports the transaction at the 130% level, and take professional advice on the source-of-expenditure statement. Do not rely on unverified claims of an amnesty.
Pak Legal Desk
If you need assistance understanding how Section 114C affects your transaction, preparing a wealth statement or source-of-expenditure statement, or responding to an FBR notice, Pak Legal Desk can help. Our team provides corporate legal guidance, compliance support, and document preparation for individuals and businesses navigating Pakistan’s tax and regulatory framework.
References
Dawn. (2025, June 21). Tax tussles. https://www.dawn.com/news/1918223/tax-tussles
Federal Board of Revenue. (2025). Income Tax Circular No. 1 of 2025-26: Amendments in Income Tax Ordinance, 2001 through Finance Act, 2025. https://download1.fbr.gov.pk/Docs/2025629106147620FInanceAct2025.pdf
Federal Board of Revenue. (2025). FBR denies rumors of any upcoming amnesty scheme for smuggled vehicles. https://fbr.gov.pk/fbr-denies-rumors-of-any-upcoming-amnesty-scheme-for-smuggled-vehicles/174124
Finance Act, 2025 (Pak.). https://download1.fbr.gov.pk/Docs/2025629106147620FInanceAct2025.pdf
Income Tax Ordinance, 2001 (Pak.). https://www.pakistancode.gov.pk/english/LGuides/SearchDetails.php?id=Income+Tax+Ordinance%2C+2001
Samaa. (2025, May 21). FBR rejects any tax amnesty in budget 2025-26. https://www.samaa.tv/2087333804-fbr-rejects-any-tax-amnesty-in-budget-2025-26
Legal Information Disclaimer
This article is for general information only and does not constitute legal advice on any specific facts or circumstances. Laws, regulations, circulars, and fee schedules may change. The current position of Section 114C, including whether it has been notified for commencement, should be verified with the Federal Board of Revenue or a qualified legal professional before any transaction is undertaken. No advocate–client relationship is created by the publication of this article.