The Federal Board of Revenue (FBR) has set a maximum transaction limit of Rs. 200,000 for cash-based payments on e-commerce Cash on Delivery (CoD) orders. The move, announced through Circular No. 02 of 2025-26 (Income Tax) on August 12, 2025, is part of the government’s strategy to encourage digital transactions and shift toward a cashless economy.
According to the FBR, the cap mirrors the existing restriction on cash payments at retail outlets under Section 21(s) of the Income Tax Ordinance, 2001. This means that whether a purchase is made in-store or online, any cash transaction exceeding Rs. 200,000 will no longer be permissible.
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Officials say the decision aims to improve payment efficiency, strengthen documentation of transactions, and support the government’s wider goal of reducing dependence on physical currency.
By limiting large cash payments, the authorities expect to minimize opportunities for tax evasion while boosting transparency in e-commerce dealings.
The measure also encourages customers and businesses to adopt digital payment methods, including bank transfers, credit and debit cards, and mobile wallet services.
Industry observers believe that while the restriction may initially require adjustment for high-value online purchases, it could ultimately foster greater trust and traceability in Pakistan’s rapidly growing online marketplace.
