The government has introduced a new legal framework under which details of bank account holders with deposits or withdrawals exceeding Rs. 100 million within six months will be reported for digital cross-matching with tax records from July 1.
The procedure has been laid down in the Finance Act 2026 issued on Monday as part of efforts to detect under-reporting of sales, overstatement of expenses and non-reporting of taxable information.
Under the new arrangement, Section 165AB, titled Reporting of Financial Transaction Data by Banking Companies and Financial Institutions, has been inserted into the Income Tax Ordinance, 2001.
The law requires every banking company and Electronic Money Institution to electronically upload specified financial transaction data to a Central Data Hub for algorithmic cross-matching of tax and banking information, regardless of the provisions of other banking and financial laws.
According to the framework, the information to be shared will include details of account holders whose deposits or withdrawals exceed Rs. 100 million during a reporting period in any or all of their bank accounts. The data will include particulars of deposits and withdrawals, opening and closing balances, peak credits and total credits.
The reporting period will cover two halves of a financial year, from July 1 to December 31 and from January 1 to June 30. The reporting dates have been set as January 31 and July 31, respectively.
The law states that the shared information will be digitally processed and will not be accessible to income tax authorities during the cross-matching stage. However, if a significant mismatch is identified, the Board’s digital system will transfer the case to the Compliance Risk Management system for further proceedings through the National Faceless Centre.
The State Bank of Pakistan may also establish, operate and maintain a secure centralised virtual repository of banking data containing such information, records and financial transactions of persons maintained by scheduled banks on the basis of unique identifiers, as prescribed by the Board.
The Federal Board of Revenue has been tasked with ensuring strict confidentiality of information received from banks and preventing any disclosure or misuse except as permitted under the law.
Under the new law, the term “accounts” includes current, call, savings, fixed, term deposits and other forms of bank deposits, while “peak credits” refers to the highest credit balance across all accounts of an account holder during the reporting period.
The Central Data Hub will be maintained by the Board through PRAL, while the Compliance Risk Management system will be used to identify and communicate compliance risks related to concealed sales, inflated expenses and unreported transactions.
