The Finance Act 2025 has brought a decisive policy shift: non-filers can no longer book, purchase, or register motor vehicles whose value exceeds Rs. 7 million. This restriction, officially inserted into the Fifteenth Schedule of the Income Tax Ordinance via Section 114C, is part of a broader clampdown on high-value economic activity outside the formal tax net.
When the federal budget was presented on June 10, 2025, the Finance Minister had announced a general restriction on non-filers purchasing vehicles. At the time, the proposal was broad and lacked clarity on monetary limits or specific enforcement criteria.
Now, with the passage of the Finance Act, that concept has been refined and formalized. The government has laid down clear transactional thresholds and legal definitions — making the restriction both targeted and enforceable.
Here’s the exact wording from Clause 1(a) of the Fifteenth Schedule:
Section 114C(1)(a)
In relation to an application for booking, purchase or registration of a motor vehicle,
“The invoice value for locally manufactured vehicle; or the import value as assessed by the Customs Authority inclusive of all applicable taxes, duties, levies and charges”
“Exceeding seven million rupees.”
This clause confirms that the restriction applies to:
…as long as the total value exceeds Rs. 7 million.
An ineligible person is someone who has not filed their income tax return for the year preceding the transaction or lacks sufficient declared resources in their wealth or financial statements. This includes those who try to use proxies or undeclared income to make high-value purchases.
This restriction applies to individuals who haven’t filed their latest income tax return or haven’t declared sufficient income to justify such a large purchase. Merely having the money isn’t enough — your financial capacity must be visible in your tax records. The rule also applies if the car is bought in the name of a family member or associate who is also a non-filer. In short, any attempt to use proxies or loopholes won’t work.
If a non-filer tries to book, purchase, or register a car over Rs. 7 million, the process will be blocked. Dealers won’t complete the sale, Excise offices will reject the registration, and even banks may halt payments linked to such transactions. The restriction is enforced at every stage, making it nearly impossible for non-filers to bypass.
The Finance Act 2025, through its clearly worded Fifteenth Schedule, now ensures that luxury car ownership is directly tied to tax compliance. If you haven’t filed your returns, you can’t book, buy, or register a vehicle worth over Rs. 7 million — whether it’s locally assembled or imported.
