How Long to Keep Tax Records in Pakistan and the US

Tax authorities in both Pakistan and the United States can review a return years after it was filed. If you cannot produce the documents behind your figures, deductions can be disallowed and income re-assessed. Knowing what to keep — and for how long — is one of the cheapest forms of protection available.

In Pakistan, the Income Tax Ordinance generally requires taxpayers to keep records for six years after the end of the tax year to which they relate. Because the law allows amended assessments within a limited period and longer in some cases, many practitioners advise keeping records for at least that long, and keeping property and investment records for as long as you own the asset.

In the United States, the IRS generally has three years from the filing date to assess additional tax. That period extends to six years if income was under-reported by more than 25%, and there is no limit if a return was never filed or was fraudulent. Records that support the cost of property or investments should be kept until the period expires for the year you sell the asset. Employment tax records should be kept for at least four years.

What to keep for a salaried person: your salary certificate or Form W-2, bank statements, withholding certificates, receipts for any deduction or credit you claimed, and a copy of the filed return and wealth statement. For freelancers and business owners, add invoices issued, supplier bills, contracts, platform statements, remittance certificates and records of business assets.

Assets need special care. For a house, plot, car or shares, keep the purchase deed or confirmation, proof of payment, and records of improvements. When you sell, these documents determine your gain. In Pakistan, they also explain movements in your wealth statement from one year to the next.

A simple system works best. Create one folder per tax year, physical or digital, with sub-folders for income, deductions, banking and assets. When a document arrives, file it immediately. At filing time, everything is in one place, and after the retention period you know exactly what can be discarded.

Digital copies are generally acceptable if they are clear and complete. Scan or photograph paper records, store them in at least two places, such as cloud storage and an external drive, and name files consistently, for example "2026-03 Bank Statement HBL".

This article is general guidance based on the Income Tax Ordinance 2001 and IRS Publication 583. Specific situations may need longer retention, so ask a tax professional if you are unsure.