FBR AuditsFebruary 02, 2026• 6 min read
Section 111(4) Foreign Remittance Protection: Defending Against FBR Audit Notices
Statutory protection granted to foreign banking remittances under Section 111(4) against FBR unexplained income queries for Overseas Pakistanis.
Key Legal Takeaways
- Banking remittances received through formal channels are protected from FBR tax queries under Sec 111(4).
- Encashment certificates (PRCs) from commercial banks serve as mandatory legal proof.
- FBR notices seeking source explanation can be legally contested and quashed.
Under Section 111(4) of the Income Tax Ordinance 2001, foreign currency encashment certificates issued by scheduled banks protect foreign remittances received in Pakistan from being treated as unexplained income or assets.
FBR field officers frequently issue automated audit notices asking taxpayers to justify foreign inflows. Our senior advocates submit formal legal replies backed by Bank Encashment Certificates (PRCs) to immediately close audit proceedings.
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