How do I show freelance earnings and Payoneer, Wise or foreign account balances in my wealth statement?

Freelancers often hold money in three places at once: a Pakistani bank account, a balance with a foreign payment platform, and sometimes a bank account abroad. The Ordinance does not mention any platform by name. It uses two broad requirements: a wealth statement under section 116 that covers foreign assets, and a separate foreign income and assets statement under section 116A once thresholds are crossed.

What does section 116 require?

Section 116(2) says every resident taxpayer being an individual who files a return of income “shall furnish a wealth statement” and a wealth reconciliation statement for that year along with the return.

Section 116(1) lists what the statement contains:

• (a) your total “assets including foreign assets and liabilities including foreign liabilities” on the specified date;
• (b) the same for your spouse, minor children and other dependants, with an Explanation that a spouse’s assets are included only if the spouse is dependent;
• (c) assets including foreign assets transferred to others, and the consideration;
• (d) total expenditure by you and your family;
• (e) the reconciliation statement of wealth.

The words “including foreign assets” and “including foreign liabilities” were inserted by the Finance Act, 2024, according to the footnotes.

Section 116(3) allows a revised wealth statement, with a revised reconciliation and reasons, before the receipt of the amendment notice that section 116(3) refers to for that year, and not after five years from the due date of the return.

When is a separate section 116A statement needed?

Section 116A(1) requires a resident individual “having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars” to file a foreign income and assets statement. It shows:

• (a) total foreign assets and liabilities on the last day of the tax year;
• (b) foreign assets transferred to others during the year, and the consideration;
• (c) particulars of foreign income and the expenditure incurred wholly and necessarily to derive it.

Section 114 says the return is to be accompanied by this statement “as required under section 116A”. Under section 116A(2), the Commissioner can issue a notice to someone who should have filed it and did not.

Is freelance income “foreign income”? Section 116A does not define the term. Section 101(2) says business income of a resident is Pakistan-source income to the extent it is derived from a business carried on in Pakistan, and section 101(16) says an amount is foreign-source income only to the extent it is not Pakistan-source. The Ordinance does not say directly whether receipts for work done from Pakistan for foreign clients count toward the USD 10,000 foreign income test. This page does not resolve that. The foreign assets test, based on value held abroad, is the clearer trigger for freelancers with large balances. Section 116A also does not state an exchange rate for converting rupee values to dollars.

How is it filed and when?

Section 118(1) says the return, the wealth statement and, if applicable, the foreign income and assets statement are furnished in the prescribed manner. Section 118(4) makes the wealth statement due by the due date for the return where section 116(2) applies. Section 118(3)(b) sets 30 September following the end of the tax year for a person other than a company.

Worked example (illustrative figures)

Bilal, a video editor in Karachi, prepares his tax year 2027 wealth statement. He is not PSEB-registered, so the Division IVA rate is 1%.

Flows during the year

1. Opening net assets on 30 June 2026: Rs. 1,500,000
2. Freelance receipts earned: Rs. 4,000,000, of which Rs. 3,600,000 was withdrawn to his Pakistani bank and Rs. 400,000 is still held with a foreign payment platform
3. Section 154A tax on the Rs. 3,600,000 realised: Rs. 3,600,000 x 1% = Rs. 36,000
4. Personal and household expenditure: Rs. 1,800,000
5. Closing net assets: Rs. 1,500,000 + Rs. 4,000,000 - Rs. 36,000 - Rs. 1,800,000 = Rs. 3,664,000

Closing assets on 30 June 2027

Asset	Amount
Pakistani bank account	Rs. 2,914,000
Balance with foreign payment platform (foreign asset)	Rs. 400,000
Laptop bought during the year	Rs. 350,000
Total	Rs. 3,664,000

The closing assets match the reconciliation. Section 154A deducts tax when a bank realises proceeds, so the Rs. 400,000 still held abroad has not yet been taxed at source. How receipts held abroad at the year end are treated in that year’s return is not spelled out in section 154A.

Common mistakes

• Leaving out balances held abroad. Section 116(1)(a) covers assets including foreign assets.
• Assuming a final-tax filer needs no wealth statement. Section 116(2) applies to every resident individual filing a return.
• Using gross receipts to explain every purchase. Where income is final tax, the unexplained-income rules limit how much of it can explain assets. See the related page on explaining assets with final-taxed income.

What to check in the official text

Read sections 116, 116A, 118 and 114(2) in full with their footnotes, and section 101(2) and (16) on source of income. The prescribed forms for the wealth statement and the foreign income and assets statement, and IRIS portal steps, are not held in this corpus.