Under the new condition for property transfers in Finance Bill 2023, individuals responsible for registering, recording, or attesting the transfer of immovable property are now prohibited from proceeding unless the seller or transferor has fulfilled their tax obligations as per section 7E of the Income Tax Ordinance 2001.
To ensure compliance, the Finance Bill 2023 includes a sub-section (2A) stating that regardless of any other existing law, the transfer of immovable properties cannot proceed without the tax liability being settled under section 7E. Moreover, evidence of tax payment must be provided in the prescribed mode, form, and manner.
Effective from the tax year 2022 onwards, the income specified under section 7E (tax on deemed income) of the Income Tax Ordinance 2001 will be subject to taxation at the rates specified in Division VIIIC of Part-I of the First Schedule.
For resident individuals, 5 percent of the fair market value of capital assets held in Pakistan on the last day of the tax year (excluding specific situations) will be treated as taxable income under this section.
These measures have been introduced to enhance tax compliance and strengthen the taxation framework concerning property transfers in the country, as outlined in the Finance Bill 2023.
Iqra holds BS in International Relations and is passionate about writing engaging content on trending real estate topics. When not working, she is either spending time with family, shopping, or discussing shows & movies.
