AVN 67.60 Increased By ▲ 0.50 (0.75%)
BAFL 30.99 Decreased By ▼ -0.01 (-0.03%)
BOP 4.91 Increased By ▲ 0.01 (0.2%)
CNERGY 3.74 Decreased By ▼ -0.04 (-1.06%)
DFML 14.03 Decreased By ▼ -0.40 (-2.77%)
DGKC 41.11 Decreased By ▼ -0.74 (-1.77%)
EPCL 46.58 Increased By ▲ 0.01 (0.02%)
FCCL 11.60 Decreased By ▼ -0.09 (-0.77%)
FFL 5.03 Decreased By ▼ -0.04 (-0.79%)
FLYNG 5.85 Increased By ▲ 0.05 (0.86%)
GGL 10.34 Decreased By ▼ -0.08 (-0.77%)
HUBC 68.04 Increased By ▲ 0.04 (0.06%)
HUMNL 5.74 Decreased By ▼ -0.02 (-0.35%)
KAPCO 28.02 Decreased By ▼ -0.08 (-0.28%)
KEL 2.26 Decreased By ▼ -0.03 (-1.31%)
LOTCHEM 25.02 Decreased By ▼ -0.03 (-0.12%)
MLCF 21.45 Decreased By ▼ -0.24 (-1.11%)
NETSOL 87.66 Increased By ▲ 1.66 (1.93%)
OGDC 99.30 Increased By ▲ 6.92 (7.49%)
PAEL 11.00 Decreased By ▼ -0.09 (-0.81%)
PIBTL 4.26 Increased By ▲ 0.02 (0.47%)
PPL 81.12 Increased By ▲ 0.97 (1.21%)
PRL 13.23 Decreased By ▼ -0.41 (-3.01%)
SILK 0.88 Decreased By ▼ -0.02 (-2.22%)
SNGP 43.85 Increased By ▲ 0.38 (0.87%)
TELE 6.12 Increased By ▲ 0.16 (2.68%)
TPLP 15.66 Decreased By ▼ -0.07 (-0.45%)
TRG 118.99 Increased By ▲ 3.98 (3.46%)
UNITY 14.01 Increased By ▲ 0.16 (1.16%)
WTL 1.23 Increased By ▲ 0.07 (6.03%)
BR100 4,171 Increased By 47 (1.14%)
BR30 15,253 Increased By 323.5 (2.17%)
KSE100 41,523 Increased By 332 (0.81%)
KSE30 15,663 Increased By 168.9 (1.09%)
Follow us

ISLAMABAD: The Federal Board of Revenue (FBR) has prescribed the relevant form for taxpayers with regard to payment of tax on immovable properties under Section 7E – the tax on deemed income basis under the Income Tax Ordinance, 2001,

The FBR has issued SRO.1829(I)/2021 here on Tuesday to issue a new form through proposed amendments to Income Tax Rules 2002.

A tax expert said that the issuance of the form means that the taxpayers would have to pay the tax on deemed income basis on immovable properties under the current income tax return form for Tax Year 2022.

According to the draft form, the FBR has asked the taxpayers to specify the total value of the capital assets taxable under section 7E; deemed income under section 7E and tax on deemed income under section 7E. The form has also prescribed separate columns for the cost/declared value and fair market value of the immovable property.

This notification, containing the form, would be applicable for the tax year 2022, FBR stated.

Purchase of immovable properties: Advance tax exemption for expatriates sought

The said form would be part of the income tax return for tax year 2022 to be filed by the extended period of October 31, 2022.

The FBR stated that a new section 7E was introduced through Finance Act, 2022 whereby for tax year 2022 and onwards, a resident person is treated to have derived income equal to five percent of fair market value of the capital assets situated in Pakistan which will be chargeable to tax at the rate of 20% under Division VIIIC of Part I of First Schedule of the Ordinance.

Following exclusions have been provided to which this section will not apply: One capital asset owned by the resident person; 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; Self-owned agriculture land where agriculture activity is carried out by the person but excluding farmhouse and annexed land.

Farmhouse has been defined in this section; Capital asset allotted to a Shaheed or dependents of a Shaheed belonging to Pakistan Armed Forces; a person or dependents of a person who dies while in the service of Pakistan armed forces or federal or provincial government; 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 allotees 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; Where fair market value of the capital assets in aggregate excluding capital assets mentioned above does not exceed rupees twenty-five million; capital assets which are owned by a provincial government or local government; capital assets owned by local authority, a development authority, builders and developers for land development and construction subject to the condition that such persons are registered with Directorate General of Designated Non-Financial Businesses and Professions.

Copyright Business Recorder, 2022

Comments

Comments are closed.

Nadeem Mufti Oct 05, 2022 11:54am
Pls share the Tax payers directory
thumb_up Recommended (0)
Aasim Naseer Oct 05, 2022 02:28pm
This is absolutely oppression and I condemn this rule.
thumb_up Recommended (0)
Dr Javwad Malik Oct 05, 2022 11:45pm
First we pay income tax. Then we pay wealth tax. Why do we file returns anyway? It is a lot more convenient not to declare anything, considering that we get to bribe FBR whether we file truth or lies.
thumb_up Recommended (0)
Muhammad Khurram Shabbir Oct 06, 2022 01:43am
Although it looks like a good fiscal step, however the complexity in the tax law is another problem.
thumb_up Recommended (0)
Abba ji Oct 06, 2022 07:01am
Federal bureau of rascals.
thumb_up Recommended (0)
Sher khan Oct 06, 2022 10:54am
How ridiculous....a property, which is not even in possession like plot... what is logic of deemed value. It means that people should not be investing in property and buying dollars...to guard against the massive devaluation of PKR..
thumb_up Recommended (0)
Shafiq Oct 06, 2022 11:16pm
This is absolutely oppression and I condemn this rule.
thumb_up Recommended (0)
Abdullah Gora Oct 08, 2022 10:53am
Referred Tax was notified in Finance Bill FY2023. This should not be applicable retrospectively for FY222 whose return is already filed .
thumb_up Recommended (0)
MUHAMMAD KASHAN DAGHA Oct 12, 2022 01:12am
So, leaving aside the constitutionality of Section 7E, I'd like to discuss the valuation method used by the FBR to determine the FMV of the property subject to 7E. The FMV they derive may be much higher than the actual FMV of the property, especially if the property is located in an area dominated by the lower middle class. Furthermore, FBR valuation completely disregards the location of the property, its condition, the legal dispute over the property, and all other factors that are required to calculate the estimated FMV in Karachi. Now, moving on to the second part, applying 5% to the FMV is a subjective matter, as the aforementioned factors are more or less the same for calculating the rent. In a nutshell, the FBR should reconsider its valuation methodology. This may not affect those who already do not file their tax returns or those who are billionaires and can easily shift the tax burden to the end consumer.
thumb_up Recommended (0)

Tax on immovable properties: FBR prescribes relevant form for taxpayers

Rupee falls 0.35%, settles at 276.28 against US dollar

Government postpones All Parties Conference again as PM will be in Turkiye

KSE-100 rises 0.81% on optimism over resolution of gas sector circular debt

Up to $5mn smuggled into Afghanistan from Pakistan daily: report

PM Shehbaz orders establishment of relief fund to aid Turkiye

Debt reprofiling viable option for Pakistan under IMF watch: report

US trade deficit widens in 2022 to record on strong imports

Islamabad court rejects Sheikh Rashid’s bail petition

Former president Pervez Musharraf laid to rest in Karachi: ISPR

IMF should work with Pakistan to protect the deprived: Human Rights Watch