News Property Real Estate

Federal government authority to tax real estate sector challenged in LHC

Federal government authority to tax real estate sector

Lahore: The decision of the federal government authority to impose a 20% tax on the real estate sector had been challenged in the Lahore High Court (LHC). As per the Constitution, the imposition of tax on immovable property is a provincial subject.

The federal government had announced a new “Section 7E” in the Income Tax Ordinance. According to section 7E, residents who derive income equivalent to 5% of the fair market value of the capital assets located in Pakistan, will be subjected to the imposition of tax at the rate of 20%.

Advocate M. Mohsin Virk and other lawyers appeared in front of the court on the behalf of the petitioners and questioned the competency of the federal to impose a tax on real estate assets. The lawyers stated that under the 18th amendment of the constitution, the federal government cannot impose taxes on immovable properties.

The lawyers of the petitioners requested the honorable court to annul the decision of the federal government and order the federal government to stop charging tax on the real estate sectors till a final decision.

The court issued the notice to the Federal Board of Revenue, the federal government, and concerned parties to the response. Moreover, the court also issued a 27A notice to the Attorney General of Pakistan to assist the LHC in the hearing of the petition.

For the latest Real Estate News and Blogs, visit Realtors blogs.

Leave a Comment

Your email address will not be published.

You may also like

Read More