Govt to Tax Profits From Selling Inherited Properties

The National Assembly’s Standing Committee on Finance and Revenue on Thursday approved a proposal to impose capital gains tax on the sale of inherited properties and plots, seeking to bring greater clarity and transparency to the taxation of inherited assets.

The proposal, discussed during deliberations on the Finance Bill 2026, would treat the market value of a property at the time of the original owner’s death as its acquisition cost for tax purposes. Capital gains tax would then be charged on any increase in value when the inherited asset is eventually sold.

Tax officials explained that if a property valued at Rs. 8 million at the time of inheritance is later sold for Rs. 10 million, capital gains tax would apply to the Rs. 2 million gain.

However, committee chairman Naveed Qamar suggested that the valuation should instead be determined from the date ownership is formally transferred, a recommendation endorsed by the panel.

FBR officials said the measure is intended to remove ambiguities surrounding inherited properties and establish a clear mechanism for taxing gains arising from their disposal. The committee was also informed that inherited assets transferred through family settlement arrangements would receive legal protection under the proposed framework.

Separately, the committee approved a proposal to impose a 5 percent withholding tax on social media earnings received through banks and endorsed mandatory electronic filing of income tax returns.