If you’re an overseas Pakistani sending money home, here’s something worth watching on June 10.
The government is actively reviewing a proposal to amend Section 111(4) of the Income Tax Ordinance — the law that currently gives FBR the right to question the source of your foreign remittances beyond a certain limit.
What the Current Law Says
Under Section 111(4), FBR cannot ask where your money came from — provided three conditions are met:
- The foreign exchange is sent through normal banking channels
- It is encashed into Pakistani rupees by a scheduled bank
- A certificate from that bank is produced
If all three conditions are met, you’re protected — but only up to Rs5 million per tax year. Send more than that, and FBR can question the source.
What’s Being Proposed
According to Express Tribune, the government is reviewing the option to remove the Rs5 million cap entirely. Under the proposed change, the limit would be lifted — meaning overseas Pakistanis could remit any amount through formal banking channels without FBR scrutiny on the source.
To address money laundering concerns, the State Bank of Pakistan would certify whether the sender and recipient are bona fide — shifting the verification responsibility from FBR to the central bank.
This is not confirmed law. It requires a formal amendment to Section 111(4) and will only be finalised in the Finance Bill 2026-27 on June 10.
What About the PTA Mobile Phone Tax?
This one is also “under review” — but the picture is less encouraging. The current tax burden on imported smartphones above $500 sits at approximately 25%, with the total import duty burden reaching 54% of device value. A reduction has been discussed in the National Assembly’s Standing Committee on Finance, but as of late May, multiple sources report that meaningful relief on high-end phones is unlikely to materialise in this budget.
Already in Your Favour — Property Transactions
One relief that is already law: if you hold a POC (Pakistan Origin Card) or NICOP and your stay in Pakistan is under 183 days in a financial year, you are automatically treated as a filer for property transactions under Sections 236C and 236K — even if you haven’t filed a Pakistani tax return. This has been in effect since the Finance Act 2023.
What Should Overseas Pakistanis Watch for on June 10?
When the Finance Bill 2026-27 is released, check specifically:
- Whether Section 111(4) has been amended — and what the new limit (or no limit) is
- Whether any PTA duty reduction notification has been issued
- Whether the Finance Act 2023 property provisions remain intact
Bottom Line
The remittance proposal is substantive and at an advanced stage of consideration. If it passes, it removes a long-standing friction point for overseas Pakistanis who send large amounts home. Watch June 10.
All proposals above are pre-budget. Nothing becomes law until the Finance Bill 2026-27 is officially tabled. Verify from the Finance Bill before taking any action.
Sir Usman is an FCCA and Registered Senior FBR Income Tax Practitioner with 15 years of C-level industry experience. ClearConcept Academy offers courses in FIA, ACCA and Pakistan Taxation. clearconcept.academy