Section 111 of Pakistan's Income Tax Ordinance lets the tax office treat money a person cannot explain as income. Section 111(4) keeps up to five million rupees a tax year of foreign remittances outside that rule, if they came through normal banking channels, were encashed in rupees by a scheduled bank, and a bank certificate is produced. Exchange companies and money transfer operators count.
What does section 111(4) say?
In the edition of the Ordinance amended up to 30 June 2026, published by the Federal Board of Revenue, section 111(4) says that subsection (1) does not apply to foreign exchange remitted from outside Pakistan through normal banking channels "not exceeding five million Rupees in a tax year" that is encashed into rupees by a scheduled bank, when a certificate from that bank is produced.
An explanation added in 2022 removes a common doubt: remittances through money service bureaus, exchange companies or money transfer operators are treated as coming through normal banking channels.
Five million rupees was about USD 18,078 at the mid market rate on 8 November 2026. The tax year is the twelve months ending on 30 June (section 74).
What does that protection mean in practice?
Section 111 is headed "Unexplained income or assets". Under subsection (1), when a person owns money or has made an investment and offers no explanation of its nature and source, or an explanation that is not satisfactory in the Commissioner's opinion, the amount can be added to that person's income chargeable to tax under the head "Income from Other Sources". Section 111(4) means remittances within the limit, with the bank's certificate, cannot be treated that way. Keep the certificate or statement your bank gives for each remittance.
Above five million rupees in a tax year, the protection of section 111(4) stops. That does not by itself make the rest taxable; it means the person may have to explain its source in the ordinary way.
Spread over twelve months, the limit is about PKR 416,667 a month. At the mid market rates of 8 November 2026 that is about USD 1,507, GBP 1,126, AED 5,533 or SAR 5,649 a month. The limit is per person and per tax year: someone who receives more than that every month will pass it before the year ends.
Only money that comes through the channels named is covered. Cash carried into the country, or money moved through hundi or hawala, is not sent through normal banking channels, so section 111(4) does not protect it.
Has the limit changed recently?
The limit was put in by the Finance Act 2018 at ten million rupees and cut to five million by the Finance Act 2019. The Finance Act 2021 rewrote the subsection, and the Finance Act 2022 added the explanation on exchange companies and money transfer operators.
Neither the Finance Act 2025 nor the Finance Act 2026 changes section 111: in both, the income tax amendments jump from the 100 series of sections straight past 111 (to section 113 in 2025 and to section 114 in 2026).
Is tax deducted when the money arrives?
This site did not find an official text that exempts home remittances from every withholding tax, so it does not say they are. Two points it did find. Older exemptions for remittance funded accounts from some withholding taxes on cash withdrawals and banking transactions were omitted by the Finance Act 2021. And the Finance Act 2026 added section 154B, which requires 5% to be withheld from revenue received from social media platforms, with inward remittances included in its definition of payment. That is about earnings from platforms, not money sent by family.
What does this page not cover?
Tax in the country you send from, tax on income the money later earns in Pakistan, gift and property rules, and the position of anyone filing a wealth statement. For any of those, or for amounts near the limit, ask a tax adviser registered in Pakistan or the Federal Board of Revenue.
Sources
- Income Tax Ordinance 2001, amended up to 30 June 2026 (FBR, PDF), checked 18 October 2026
- FBR, Income Tax Ordinance editions, checked 18 October 2026
- Finance Act 2025, Gazette of Pakistan (FBR, PDF), checked 18 October 2026
- Finance Act 2026, Gazette of Pakistan (FBR, PDF), checked 18 October 2026
Last checked 18 October 2026. Rates on this page are from 8 November 2026 and are refreshed daily. If a rule here has changed, the official source wins.