FBR to launch online exemption, 1% tax on immovable properties
The Federal Board of Revenue (FBR) will introduce an innovative online feature within the updated ‘IRIS’ system, allowing citizens to claim exemptions or make a 1% tax payment under Section 7E for immovable properties, according to August 06 news reports.
According to reports, the board announced two significant real estate industry developments aimed at bringing convenience and clarity to property transactions.
The FBR has reportedly implemented an online service that eliminates the need for taxpayers to visit the office of the Commissioner of Internal Revenue. In addition, the development will effectively alleviate fears of exploitation during the exemption certificate application procedure.
In addition, the FBR has decided to delay the release of new valuation tables for real estate until the following month. Originally scheduled for release in August 2023, these revised property values will now be determined by the end of the month in collaboration with committees formed in each city.
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The decisions, which were disclosed following a meeting between FBR Chairman Amjad Zubair Tiwana and real estate industry representatives at FBR Headquarters, are of particular importance. According to Section 7E of the Income Tax Ordinance, every vendor of immovable property must obtain an exemption certificate from the Commissioner of Inland Revenue or pay a one percent tax.
Notably, Section 7E of the Income Tax Ordinance applies to all Pakistani citizens, whether or not they submit income tax returns. Previously, tax registrants granted an exemption under this section were required to visit the relevant commissioner in person to provide proof of exemption. The FBR is preparing to launch a user-friendly online platform that will streamline the process of obtaining exemption certificates. It was emphasised that these initiatives represent a step forward for the real estate industry, as they embrace digitalization and efficiency while ensuring equitable taxation practices.
