ISLAMABAD: The Federal Board of Revenue (FBR) has imposed a cap of Rs 200,000 on cash-based transactions at retail outlets and for e-commerce Cash on Delivery (CoD) orders.

The directive was issued through Circular No. 02 of 2025-26 (Income Tax), released on Friday. According to the circular, the measure is part of the government’s broader policy to encourage a transition towards a cashless economy and ensure compliance with the Income Tax Ordinance, 2001 (Section 21(s)).

The FBR emphasized that the same transaction limit will apply to both conventional retail markets and online businesses handling CoD payments. By setting this uniform cap, the government aims to reduce reliance on cash, curb undocumented transactions, and promote the use of digital payment systems.

The new restriction is expected to impact Pakistan’s fast-growing e-commerce sector, which already faces higher operational costs due to new taxation policies. Industry stakeholders believe that while this move aligns with global best practices, it could pose short-term challenges for businesses heavily dependent on high-value CoD transactions.