How to Avoid FBR from Tracking Your Bank Transactions Hidden Rules Exposed

The FBR monitors our banking activities. What steps should we follow to adopt the right approach in tax matters? How many transactions are considered appropriate in banking? Is there any limit on banking transactions and how much money is appropriate to have in the account? These are the questions that often come to the minds of people. Today we will give you a complete guide.
we will tell you what to keep in mind and how to stay safe from the FBR’s radar.

Table of Contents

When does the bank report to the FBR?

The State Bank has set transaction limits for all bank account holders, which all banks are required to adhere to.
A total of Rs 10 million or more deposited during a month,
Cash withdrawals of more than Rs 1 million in a month.
Payment of Rs 200,000 of utility bills have been made in a month through the credit card.

How much money can be kept in a bank account?

As far as the question of how much money you can keep in your bank account is there is no limit.

It depends on the profile of the taxpayer. For example, if a salaried individual earns Rs 200,000 per month, then approximately the same amount should be deposited in his bank account every month, that is, approximately Rs 2,400,000 per year. This amount is declared as his income in the tax return.

The Balance in The Bank Account Depends on the Nature of the Business.

If a taxpayer is doing business, the amount coming into his bank should be in accordance with his sales turnover or business volume. If there is any unusual activity or disproportionate amount deposited in the account, the FBR can issue a notice.
Moreover, the monthly sales volume, banking activity and nature of transactions depend on the type of business. For example, in the steel industry or large retail malls, large sums of money are transacted on a daily basis.
However, large amounts of income or expenses will only be acceptable if they are consistent with the information disclosed on your tax return.

What FBR can do if discrepancy found.

If the credit/income reported in your filed tax return and the account statement do not match, the Federal Board of Revenue can assess it itself. This can be done through audit of the filed return or assessment orders, especially when the FBR has additional evidence.
Moreover, the Federal Board of Revenue has the power to include the amount transferred to your bank account as “other sources of income” under Section 111 of the Income Tax Ordinance and impose tax on the entire portion, which can be detrimental to the taxpayer.