Islamabad: The valuation of immovable properties was scheduled to increase, but the Federal Board of Revenue (FBR) has decided to delay it until September 2023.
FBR Chairman Amjad Zubair Tiwana and a team of tax officials held a meeting with real estate industry representatives at the FBR headquarters to discuss this matter. They have come to a consensus to postpone the issuance of increased property values. The FBR was in the process of introducing new values before this decision was made.
Each municipality will establish local committees, in collaboration with real estate associations, to determine new property values. In September 2023, the board will convene to validate a uniform 10% increase in property values for all immovable properties to rectify any discrepancies. The updated ‘IRIS’ system will include an online feature that allows citizens to register for exemptions or pay the 1% tax on immovable properties imposed by Section 7E without the involvement of the Commissioner of Internal Revenue (FBR). This action aims to eliminate the discretion of Commissioners of Inland Revenue in deciding matters under Section 7E of the Income Tax Ordinance of 2001.
According to the Finance Act of 2022, a fresh Section 7E has been incorporated in the ordinance, which obligates inhabitants to disclose 5% of the reasonable market value of their domestic capital assets as income. This income is subsequently taxed at a rate of 20%, equal to 1% of the property’s value. The FBR has recognized the challenges in implementing the new section and has guaranteed that the Commissioner of Internal Revenue will refrain from using their power under Section 7E while granting exemptions.
As per recent updates, section 236C of the Ordinance has been revised by the Finance Act of 2023. Property transfers in Pakistan now require sellers to fulfill their tax obligations under section 7E and submit proof of payment before the transfer can occur. PRAL has updated the IRIS system to aid taxpayers with documentation and tax payments. For real estate news and update visit realtorspk blog.
