Tax on Cryptocurrency Income in Pakistan (TY 2025-26)
Pakistan crypto tax TY 2025-26 - FBR treatment of trading gains, mining, staking, P2P, NFT income, regulatory grey zone, and IRIS wealth-statement risk.
Worked example: Rs 250,000 per month
Annual income Rs 3,000,000 - here's how it would be taxed both ways under Finance Act 2025.
| Taxable income band | Rate | Income in band | Tax in band |
|---|---|---|---|
| Up to Rs 600,000 | 0% | Rs 600,000 | Rs 0 |
| Rs 600,001 – Rs 1,200,000 | 15% | Rs 600,000 | Rs 90,000 |
| Rs 1,200,001 – Rs 1,600,000 | 20% | Rs 400,000 | Rs 80,000 |
| Rs 1,600,001 – Rs 3,200,000 | 30% | Rs 1,400,000 | Rs 420,000 |
| Total slab tax | Rs 590,000 | ||
Pakistan's crypto regulatory grey zone
The State Bank of Pakistan has issued repeated warnings against virtual currencies and Pakistani banks generally do not facilitate direct crypto exchange transactions. But cryptocurrency holding itself is not criminally prohibited and FBR taxes the resulting income/gains. The Income Tax Ordinance does not currently have a dedicated 'crypto' regime - gains are taxed under the existing heads (capital gains on disposal, business income for traders, other-source income for staking and mining). This grey zone makes documentation critical.
Trading gains: business income vs capital gains
If you hold crypto as an investment and sell occasionally for a profit, the gain is capital gain under Section 37 - taxed at your slab rate as part of total income. If you trade actively (frequent transactions, leveraged positions, algorithmic strategies), FBR may classify your activity as a business under Section 18, with the full slab regime applying to net trading profit. The distinction matters: investors keep deductions limited; active traders can deduct trading platform fees, hardware, internet, and screen subscriptions.
Mining, staking, and DeFi yield
Crypto mined or staked is taxable when received, valued at fair market price on the day of receipt - typically reported as other-source income or business income. Subsequent disposal is a separate capital gains event measured against the cost basis (the FMV at receipt). DeFi yield (liquidity-pool rewards, lending interest, governance-token airdrops) is similarly taxable when received, with the technical valuation challenge that on-chain rewards arrive in fragments throughout the year.
Wealth statement and audit risk
FBR's biggest concern with crypto is the wealth-statement reconciliation. If your assets visibly grew during the year and you cannot point to documented income, FBR will assume unexplained wealth under Section 111 - taxed at the maximum rate plus penalties. Declare crypto holdings on the wealth statement (code 7048 Other Assets is the closest fit), maintain a transaction-by-transaction ledger with exchange screenshots, and keep bank/P2P-counterparty records. Crypto without documentation is the audit story FBR most often pursues.
Frequently asked questions
Is cryptocurrency legal in Pakistan?
Holding crypto is not criminally prohibited but the State Bank discourages it and most Pakistani banks don't facilitate crypto-exchange transactions directly. FBR taxes the resulting income.
How is crypto trading profit taxed?
Casual investors: capital gains under Section 37 at slab rates. Active traders: business income under Section 18 at non-salaried slab rates with deductible trading costs.
Is staking and mining income taxable?
Yes. Crypto received via staking or mining is taxable as other-source / business income at fair market value on the day of receipt. Subsequent disposal is a separate capital-gain event.
Where do I declare crypto on the wealth statement?
Code 7048 (Other Assets) is the closest fit. Declare the rupee value at year-end and maintain transaction-level records to substantiate the figure during any audit.
Will FBR audit my crypto holdings?
FBR audits when wealth-statement growth lacks documented income. Crypto is a frequent trigger because the holdings often appear suddenly on the wealth statement without a corresponding income declaration.