Tax on Deemed Income from Immovable Property 

Islamabad FBR issued circular No. 15 of 2022-23 dated July 21, 2022 regarding Finance Act 2022 explanation of important amendments made in the Income Tax ordinance 2001. A new section 7E has been introduced through Finance Act 2022, whereby tax year 2022 ahead a resident person have more than one immovable property situated in Pakistan and his value 25 million or more is treated to income equal to 5% of the fair market value will be charged to tax at the rate of 20% under Division VIIIC of Part I of the First Schedule of the Ordinance. This section will not apply on the following:- 

 Ø  One capital asset owned by the resident person

 Ø      Self-owned business premises from where the business is carried out by the persons appearing on the active taxpayer’s list at any time during the year.

 Ø      Self-owned agriculture land where agriculture activity is carried out by the person but excluding farmhouse and annexed land. Farmhouse has been define in this section

 Ø          Capital asset allotted to

(i)                 A Shaheed or dependents of a Shaheed belonging to Pakistan Armed Forces;

(ii)      A person or dependents of a person who dies while in the service of Pakistan armed forces or federal or provincial government;

(iii)    A war wounded person while in service of Pakistan armed forces or federal or provincial government;

(iv)    An ex-serviceman and serving personnel of armed forces or ex-employees or serving personnel of federal and provincial governments who are original allotees of the capital asset as duly certified by the allotment authority;

Ø  Ø  Any property from which income is chargeable to tax under the ordinance and tax leviable has been paid;

Ø  Capital asset in the first year of acquisition on which tax under section 236K has been paid;

Ø  Where fair market value of the capital assets in aggregate excluding capital assets mentioned in above six points does not exceeds rupees twenty-five million;

Ø  Capital assets which are owned by a provincial government or local government;

Ø Capital assets owned by local authority, a development authority builders and developer for land development and construction subject to the condition that such persons are registered with Directorate General of Designated Non-Financial Businesses and Professions

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