FBR Prescribes Form for Payment of Tax on Immovable Properties

The Federal Board of Revenue (FBR) has prescribed a form for the taxpayers for the payment of tax on immovable property.

SRO.1829(I)/2021 has been issued so that the new form could be issued through the proposed amendments to the Income Tax rules 2022.

The issuance of the form indicates that the taxpayer has to pay tax on a deemed income basis on immovable property under the provision of the income tax return form for the year 2022.

FBR has also stated that the form shall be applicable for the tax year 2022, will be a part of the income tax return for the year 2022, and should be filed by October 31^st.

Additionally, the form of cost/declared value and fair market value of the immovable property has been separated with columns.

According to the details, FBR has directed the taxpayers to submit the total value of the assets that are taxable under Section 7E.

Section 7E – introduced through the Finance Act, 2022 – states that a property in Pakistan, which brings an income of 5% of its fair market value, will be charged a 20% tax under Division VIIIC of Part I of the First Schedule of the Ordinance.

Section 7E is not applicable to the following.

• Single Capital Asset owned by the resident person
• Asset from where the business is carried out
• Agricultural land on which agricultural activity is carried out
• Capital Asset that is allotted to a Shaheed
• The dependents of a person who dies during service (for armed forces only)
• A war wounded person while in service of Pakistan armed forces or federal or provincial government
• An ex-serviceman and serving personnel of armed forces or ex-employees or serving personnel of federal and provincial governments who are original allottees of the capital asset as duly certified by the allotment authority
• Any property from which income is chargeable to tax under the Ordinance and tax leviable has been paid
• Capital asset in the first year of acquisition on which tax under section 236K has been paid
• Capital assets owned by a local or provincial government
• Capital assets owned by the local authority which can be development authority, builders, and developers for land development and construction will be subject to the condition that such persons are registered with the Directorate General of Designated Non-Financial Businesses and Professions