FBR Labels Cash Deposits Over Rs200,000 as High-Risk, Imposes 20.79% Tax

In a significant policy shift under the Finance Act 2025, the Federal Board of Revenue (FBR) has categorized all cash deposits exceeding Rs200,000 as “high risk” and introduced stringent monitoring mechanisms to track such transactions. According to official sources, a substantial 20.79% tax will be automatically deducted on any cash deposit surpassing the Rs200,000 threshold, and the amount will not be credited into the ledger until verified. The FBR’s enhanced auto-tracing system will flag suspicious activity and ensure compliance with tax regulations. Banks will also be empowered to report suspect transactions directly to the FBR. Furthermore, individuals making such deposits may be required to provide documentation or a valid explanation to justify the source of funds. This move aims to strengthen financial transparency and curb tax evasion in Pakistan’s cash economy.