The provincial revenue department, alongside other relevant authorities, is now playing an active role in managing the transfer of immovable properties. To ensure tax compliance and a smooth process of property transactions for property vendors and transferors, the Federal Board of Revenue (FBR) has released a detailed set of guidelines. It follows the FBR’s clarification regarding the addition of subsection 2(A) to section 236(C) of the income ordinance and the issuance of new property transaction guidelines and criteria.
An official from the Lahore Development Authority (LDA) has confirmed that property transfer and registration operations have resumed to the FBR’s updated criteria.
Before July 1, property transfer cases in the province were suspended, prompting development authorities, including the LDA, to seek FBR clarification on resuming their duties. With the new enactment of subsection 2(A) of section 236C of the Income Tax Ordinance of 2001, anyone responsible for registering, recording, or attesting the transfer of immovable property must ensure the vendor or transferor has satisfied their tax obligation under section 7E.
The appropriate authority must receive tax payment proof in the prescribed format and manner. Section 7E of the Finance Act 2022 states that starting from the tax year 2022, every resident person is presumed to have derived income equivalent to 5% of the fair market value of their capital asset located in Pakistan. This presumed income is taxed at a rate of 20%, equivalent to 1% of the fair market value of immovable property.
The transfer of property cases in the province has been suspended until July 1, prompting development authorities to seek clarification from the Federal Board of Revenue (FBR). The new Income Tax Ordinance stipulates that individuals who register or record property transfers must ensure their tax obligations are met under section 7E.
Proof of tax payment must be provided in the prescribed format. Section 7E of the Finance Act 2022 taxes residents at a rate of 20% for presumed income equivalent to 5% of the fair market value of their capital assets in Pakistan.
