Can a non-filer still buy a car, and what is the Rs. 7 million limit for 'ineligible persons'?

Section 114C was inserted into the Income Tax Ordinance, 2001 by the Finance Act, 2025. It does not add a tax. It restricts certain transactions, including booking, buying or registering a car, by a person the section calls “ineligible”. This page uses the Ordinance as amended to 30 June 2026.

What does the law say?

Section 114C(1)(a) says that an application by an ineligible person for booking, purchase or registration of a motor vehicle of a value exceeding the threshold in the Fifteenth Schedule shall not be accepted or processed by any manufacturer of a motor vehicle or by the vehicle registering authority of the Excise and Taxation Department.

Serial number 1 of the Fifteenth Schedule sets that threshold at “exceeding seven million rupees”. It also says how the value is measured:

Vehicle	Value used for the threshold
Locally manufactured	The invoice value
Imported	The import value as assessed by the Customs Authority, inclusive of all applicable taxes, duties, levies and charges

A car at or below Rs. 7,000,000 on that measure is outside the restriction. So is any transaction by a non-resident person or a public company, which section 114C(2) excludes from clause (a).

Who is an “eligible person”?

Section 114C(4)(a) gives two routes:

1. Return route. The person filed a return of income for the tax year immediately before the year of the transaction and has sufficient resources for the transaction in the wealth statement (for an individual) or the financial statements (for a company or association of persons).
2. Statement route. The person filed a “sources of investment and expenditure statement” declaring sufficient resources and explaining them for that particular purchase. Section 114C(4)(d) describes this statement as a declaration filed on the Board’s web portal specifying the sources of funds for the transaction.

An individual’s eligibility also covers his immediate family members, defined as parents, spouse and dependent children. Anyone who is not an eligible person is an “ineligible person” under section 114C(4)(c).

What are “sufficient resources”?

Section 114C(4)(e) defines sufficient resources as one hundred and thirty percent of cash and equivalent assets declared in the sources of investment and expenditure statement or the wealth statement for the latest tax year. Cash and equivalent assets include cash in Pakistani or foreign currency, the fair market value of gold, the net realizable value of stocks, bonds and receivables, and other cash equivalents that may be prescribed. For a company or association of persons, it is the cash and equivalent assets in the financial statements attached to the latest return.

A proviso adds that where the car is bought by exchanging a capital asset already declared, the disposal of that asset is treated as a cash equivalent asset to the extent of the value in the agreement.

Worked example (illustrative figures)

Sana in Multan wants to book a locally manufactured SUV invoiced at Rs. 9,000,000. The invoice value exceeds Rs. 7,000,000, so section 114C(1)(a) is engaged once the restriction is notified. She did not file a return last year.

1. She files a sources of investment and expenditure statement declaring Rs. 7,200,000 in bank balances and gold at fair market value.
2. Reading section 114C(4)(e) literally, sufficient resources are 130% of that figure: Rs. 7,200,000 x 130% = Rs. 9,360,000.
3. Rs. 9,360,000 is more than the Rs. 9,000,000 invoice, so on that reading she is an eligible person for this purchase.

Had she declared only Rs. 6,500,000, the figure would be Rs. 8,450,000, below the invoice value. The section does not spell out the comparison step in words, so treat this as a reading of the definition, not a stated formula.

Separately from section 114C, the advance tax under section 231B still applies, and if Sana is not in the active taxpayers’ list it is increased under the Tenth Schedule.

What if the car costs less than Rs. 7 million?

Section 114C does not stop anyone, eligible or not, from buying a car at or below the threshold. The purchase still attracts section 231B advance tax, at the higher Tenth Schedule rate for a person not in the active taxpayers’ list.

Common mistakes

• Reading the statement as a clean chit on income. Section 114C(3) says the sources of investment and expenditure statement and sufficient resources are not to be construed as nature and source of income for section 111. Unexplained income can still be examined under section 111.
• Assuming the restriction is already live. Section 114C(5) makes the start date depend on a Federal Government notification, which may also change the thresholds.
• Measuring an imported car at its customs value alone. The Fifteenth Schedule adds all applicable taxes, duties, levies and charges.

What to check in the official text

Read section 114C in full and serial number 1 of the Fifteenth Schedule. Then look for the Federal Government’s notification under section 114C(5) in the official Gazette. That notification sets the date and any change to the Rs. 7 million threshold, and it is not part of this corpus. The web portal procedure for the sources of investment and expenditure statement is also outside this corpus.