Almost everyone filing a return in Pakistan gets through the income section without much trouble, then hits the wealth statement and stops. IRIS refuses to accept the return, displays a reconciliation figure that will not come to zero, and gives no clue as to which number is wrong.
The wealth statement is not optional. Under section 116 of the Income Tax Ordinance, every resident individual filing a return must submit one, together with a wealth reconciliation statement. It is the single most common reason a return sits unfiled as the deadline approaches.
This guide explains exactly what a wealth statement must contain, the reconciliation formula IRIS is applying, why your figure will not balance, and how to find the missing amount. There is also a calculator below that shows you instantly whether your numbers reconcile.
Quick answer: A wealth statement is a declaration of everything you own and owe at the end of the tax year, plus your yearly expenses. Under section 116(2) of the Income Tax Ordinance 2001, every resident individual filing a return must submit one along with a wealth reconciliation statement. The reconciliation must satisfy a single equation: closing net assets minus opening net assets must equal your income minus your expenses. IRIS will not let you submit until this balances to zero. If it does not balance, the missing amount is almost always an understated expense, an asset valued differently from last year, or income left off the return.
Use the reconciliation calculator below, or let Filing.pk prepare and reconcile it for you.
A wealth statement is a snapshot of your financial position on the last day of the tax year, 30 June. It is not a tax calculation. It simply records what you own, what you owe, and what you spent, so that the FBR can see whether the growth in your wealth is explained by the income you declared.
Section 116(1) sets out what must be declared:
A point many people get wrong. The Finance Act 2024 added an explanation to section 116 clarifying that a spouse's assets are only included if the spouse is dependent. If your spouse files their own return and is not dependent on you, their assets belong in their statement, not yours.
| Who | Wealth statement required? |
|---|---|
| Resident individual filing a return | Yes — always, with the return |
| Member of an association of persons (AOP) | Yes, with the AOP's return |
| Salaried individual, any income level | Yes if resident and filing |
| Non-resident individual | Not required under 116(2), but a Commissioner may still issue a notice |
| Anyone served a notice by the Commissioner | Yes, within the time stated |
There is no minimum income threshold. The old rule limiting wealth statements to those earning a million rupees or more was removed by the Finance Act 2013. If you are a resident individual and you file a return, you file a wealth statement.
Everything hinges on one equation. IRIS checks whether the change in your net wealth over the year is fully explained by what came in and what went out:
In plain terms: if your wealth grew by Rs 2 million during the year, you must be able to show Rs 2 million of income after expenses that explains it. If your wealth grew by more than your declared income minus expenses can justify, the difference is unexplained — and that is precisely what the FBR is looking for.
Inflows include your salary, business income, rental income, profit on debt, dividends, capital gains, gifts received, inheritance, foreign remittances and loans taken. Outflows include household expenses, rent paid, utilities, education, travel, medical costs, taxes paid, gifts given, charity and loans repaid.
Enter your figures below. The calculator applies the same equation IRIS uses and tells you whether you balance — and if not, by exactly how much and in which direction.
This calculator checks the reconciliation equation only. It does not value assets or verify figures. Enter net assets after deducting liabilities.
| Category | What to declare |
|---|---|
| Immovable property | Houses, plots, shops, agricultural land — at cost, not market value |
| Vehicles | Cars, motorcycles, commercial vehicles at purchase cost, with registration numbers |
| Bank accounts | Closing balance on 30 June for every account, including foreign accounts |
| Cash in hand | Actual cash held — not a balancing figure (see the warning below) |
| Investments | Shares, mutual funds, prize bonds, National Savings certificates, business capital |
| Gold and valuables | Jewellery, precious metals, high-value household items at cost |
| Receivables | Loans you have given, advances, security deposits |
| Foreign assets | Property, accounts and investments held outside Pakistan — required since Finance Act 2024 |
Liabilities are deducted from all of this: bank loans, mortgages, credit card balances, personal borrowings and any amounts payable. The result is your net assets.
Do not use "cash in hand" to force a balance. The most common shortcut is to adjust the cash figure until the reconciliation hits zero. It works in IRIS, but it leaves a cash balance in your record that has no explanation, grows every year, and is one of the easiest things for the FBR to question. Find the real missing number instead.
If the calculator above shows a gap, the cause is nearly always one of these:
| Problem | How to fix it |
|---|---|
| Understated expenses | The single most common cause. Add up rent, groceries, utilities, school fees, medical costs, travel, fuel and domestic staff honestly. Most people declare far less than they actually spend. |
| Opening figure does not match | Your opening net assets must equal last year's closing figure exactly. Pull up last year's statement in IRIS and copy it across. |
| Asset revalued instead of held at cost | Property must stay at its original cost year after year. If you updated a plot to today's market price, the increase looks like unexplained wealth. |
| Income missing from the return | Rental income, bank profit, dividends and capital gains are often forgotten. Check your withholding tax certificates — every deduction implies income. |
| Gifts, inheritance or loans not recorded | These are inflows even though they are not taxable income. Declare them, and keep evidence of the source. |
| Tax paid left out of outflows | Income tax and withholding tax deducted during the year are outflows. They reduce your net assets and belong in the reconciliation. |
| Dependents' assets mixed in | Include a spouse's assets only if the spouse is dependent. An independently filing spouse declares their own. |
Section 182 imposes a penalty of 0.1% of the tax payable for each day of default, up to a maximum of 50% of the tax payable. Where that calculation produces less than the floor, or no tax is payable, a minimum penalty applies:
| Situation | Minimum penalty |
|---|---|
| General default | Rs 40,000 |
| 75% or more of income is salary, and salary is under Rs 5 million | Rs 5,000 |
| Taxable income up to Rs 800,000 | Rs 5,000 |
There is relief for filing late rather than not at all. The penalty is reduced by 75%, 50% and 25% if the return is filed within one, two or three months of the due date respectively. Beyond that, no reduction applies. Our guide to the late filing surcharge covers the separate ATL restoration fee.
Yes. Section 116(3) allows you to file a revised wealth statement if you discover an omission or an incorrect figure. You must file it with a revised reconciliation and state your reasons, under intimation to the Commissioner in the prescribed form.
The important limit is timing: you can only revise before you receive a notice under section 122(9). Once the FBR has opened an amendment proceeding, the opportunity to correct it yourself has passed. If you know a past statement is wrong, revising it voluntarily is far better than waiting.
Suppose your net assets were Rs 8,000,000 last 30 June and Rs 9,500,000 this year, so your wealth grew by Rs 1,500,000. Your declared inflows were Rs 3,600,000 of salary. For the reconciliation to balance, your outflows must be Rs 2,100,000:
If you only declare Rs 900,000 of expenses, IRIS shows a gap of Rs 1,200,000 and refuses the return. The answer is not to invent cash — it is to recognise that Rs 75,000 a month is what you actually spend.
Reconciliation is where most self-filed returns stall, and where errors quietly accumulate year after year. Filing.pk prepares your wealth statement, reconciles it against your return, and files both correctly — entirely online, at prices up to 30% below other portals.
Yes. Under section 116(2) of the Income Tax Ordinance 2001, every resident individual filing an income tax return must furnish a wealth statement and a wealth reconciliation statement along with that return. There is no minimum income threshold.
Closing net assets minus opening net assets must equal total inflows minus total outflows. In other words, the growth in your wealth must be fully explained by your income after expenses. IRIS will not accept the return until this difference is zero.
The most common cause is understated personal expenses. Other frequent causes are an opening balance that does not match last year's closing figure, an asset revalued to market price instead of held at cost, income such as rent or bank profit omitted from the return, or a gift, inheritance or loan not recorded as an inflow.
At cost. Immovable property is declared at the price you paid and carried at that same figure in every subsequent year. Revaluing it to current market price creates an apparent increase in wealth that your income cannot explain.
Only if your spouse is dependent on you. The Finance Act 2024 added an explanation to section 116 confirming this. A spouse who files their own return and is not dependent declares their own assets separately.
Under section 182, 0.1% of the tax payable per day of default, capped at 50% of the tax payable, with a minimum of Rs 40,000. The minimum falls to Rs 5,000 where taxable income is up to Rs 800,000, or where at least 75% of income is salary and salary is below Rs 5 million.
Yes, under section 116(3), by filing a revised wealth statement with a revised reconciliation and your reasons, under intimation to the Commissioner. It must be done before you receive a notice under section 122(9).
Yes. Section 116 requires disclosure of total assets including foreign assets and liabilities including foreign liabilities, wording confirmed by the Finance Act 2024. Overseas bank accounts, property and investments must all be declared.
Based on sections 116 and 182 of the Income Tax Ordinance 2001 as amended. This is general information, not tax advice. Requirements and penalties can change with each Finance Act, so please verify on fbr.gov.pk or contact us about your own situation.