FBR Sets Rs. 200,000 Cash Limit for Cash on Delivery Orders in Pakistan

Understanding the FBR Cash Limit for E-commerce

The Federal Board of Revenue (FBR) in Pakistan has introduced a new rule to promote a cashless economy. As of August 12, 2025, the FBR has set a cash limit of Rs. 200,000 for Cash on Delivery (CoD) orders in e-commerce. This means you cannot pay more than Rs. 200,000 in cash for online shopping orders delivered to your doorstep. The rule aims to make transactions clearer and reduce tax evasion.

This decision comes from Circular No. 02 of 2025-26 (Income Tax), which aligns with the government’s goal to encourage digital payments. By limiting cash payments, the FBR hopes to create a more transparent financial system in Pakistan.

Why Did the FBR Set a Cash Limit?

The FBR’s new cash limit is part of a bigger plan to reduce cash usage across Pakistan. Cash transactions can sometimes hide business activities, making it hard for the government to track taxes. By setting a Rs. 200,000 cap on cash payments for CoD orders, the FBR ensures that larger transactions happen through digital methods like bank cards or online transfers.

This move supports the Income Tax Ordinance, 2001, specifically Section 21(s), which also applies the same cash limit to retail stores. The goal is to make all payments traceable, helping the government collect taxes fairly.

How Does the Cash Limit Affect E-commerce Shoppers?

If you love shopping online and using Cash on Delivery, this rule changes things a bit. For orders above Rs. 200,000, you must pay using a digital method, like a debit card, credit card, or mobile banking app. Cash payments for these orders will not be allowed.

For example, if you buy a pricey item like a high-end phone or furniture worth Rs. 250,000, you cannot pay the full amount in cash when it’s delivered. Instead, you’ll need to use a digital payment option to complete the purchase. This rule makes shopping safer and more organized.

Benefits of the Rs. 200,000 Cash Limit

This new cash limit brings several advantages for both shoppers and businesses. First, it encourages the use of digital payments, which are faster and more secure. Digital transactions leave a record, reducing the chances of fraud.

Second, the rule helps small businesses and e-commerce platforms operate more transparently. When payments are made through banks, it’s easier for businesses to keep accurate records and avoid tax issues. Finally, this step moves Pakistan closer to a modern, cashless economy, making financial systems stronger.

Challenges for Shoppers and Businesses

While the cash limit has benefits, it may create challenges for some. Many people in Pakistan still prefer cash for convenience, especially in smaller cities or rural areas where digital payment options may not be common. Shoppers might need to adapt to using mobile apps or bank cards, which could take time.

For businesses, especially small e-commerce sellers, this rule means updating payment systems to accept digital transactions. They may also face extra costs to set up these systems. However, the FBR encourages businesses to adopt these changes to avoid penalties and stay compliant.

How to Prepare for the Cash Limit Rule

To follow the new FBR cash limit, shoppers and businesses can take simple steps. For shoppers, start using digital payment methods like mobile apps (Easypaisa, JazzCash) or bank cards for larger purchases. Make sure your bank account or payment app is set up and ready to use.

For businesses, ensure your e-commerce platform supports digital payments. Train your staff to guide customers on how to pay online. Also, keep clear records of all transactions to stay on the right side of the law. These steps will help you avoid issues with the FBR.

The Future of Cash on Delivery in Pakistan

The Rs. 200,000 cash limit is a big step toward a digital economy in Pakistan. As more people and businesses adopt digital payments, Cash on Delivery may become less common for high-value orders. This change could lead to faster, safer, and more reliable transactions across the country.

The FBR’s rule also sets the stage for future updates to make Pakistan’s economy more modern. By embracing digital payments, shoppers and businesses can contribute to a stronger financial system while enjoying the convenience of online shopping.