You file your income tax return. You think you are done. Then you find out there is a second part — the wealth statement under Section 116 — that most people do not know exists until FBR asks about it. It is not optional. It is not a formality. And skipping it can turn a routine filing into a years-long problem.
The facts, in short
- What it is: A declaration of your assets, liabilities, and sources of income filed with your tax return.
- Who must file: Every person required to file an income tax return — individuals, AOPs, companies.
- When: Annually, with your tax return.
- Cost of skipping: Incomplete return treatment, notices, disallowed deductions, unexplained income assessments.
What the wealth statement actually is
The wealth statement is a snapshot of what you own, what you owe, and how you acquired your wealth. It is filed alongside your income tax return, not separately. FBR uses it to check whether your lifestyle matches your declared income — if you are driving a car and living in a house that your tax return cannot explain, they will want answers.
What you must declare
- Immovable property: Land, houses, apartments — whether in Pakistan or abroad.
- Movable property: Vehicles, jewelry, cash, bank balances, shares, business assets.
- Liabilities: Loans, mortgages, credit card balances, amounts owed to others.
- Sources of income: Salary, business income, rental income, agricultural income, dividends, and anything else you received during the year.
How to value your assets
Generally, assets are declared at cost for recently acquired items and at fair market value for older ones. Bank balances are declared at the year-end closing balance. The key principle is consistency — value the same way year to year so FBR can see changes clearly.
Do not understate. Do not overstate. Declare what you own at a defensible value and keep the supporting documents — purchase invoices, bank statements, property transfer records.
The most common mistakes
- Filing the return without the wealth statement. Your return is treated as incomplete.
- Leaving out assets. A vehicle bought in your spouse's name, a bank account you forgot, jewelry — declare everything.
- Inconsistent valuation. Valuing property at cost one year and market value the next creates unexplained jumps.
- Not declaring liabilities. Loans and credit card balances reduce your net wealth — declare them.
- Missing the deadline. The wealth statement is due with your return — late filing brings the same penalties as a late return.
What happens if you skip it
FBR can treat your return as incomplete, issue a notice, disallow deductions, or assess you on unexplained income. If your declared assets exceed your declared income, the difference is treated as income you never reported — and taxed accordingly, with penalties.
Stop guessing. Get your return complete.
We will prepare your wealth statement, value your assets correctly, and file it with your tax return — so FBR has no reason to ask questions.
Frequently asked questions
What is a wealth statement under Section 116?
A declaration of your assets, liabilities, and sources of income filed with your annual tax return. It shows what you own, what you owe, and how you acquired your wealth.
Who must file a wealth statement in Pakistan?
Every person required to file an income tax return — individuals, associations of persons, and companies. It is part of the return, not optional.
What assets must I declare?
Immovable property, vehicles, jewelry, cash, bank balances, business assets, investments — wherever located.
What happens if I skip the wealth statement?
Your return may be treated as incomplete. FBR can issue notices, disallow deductions, or assess you on unexplained income.