Islamabad: As per latest updates the tax payment on deemed income on immoveable properties imposed by the FBR in June this year has been challenged in the court. A citizen has filed a petition thereby requesting the court to allow filing of income tax returns without having to pay tax on deemed income basis regarding immoveable properties. The tax payers have to file income tax returns by Sep 30 so the court has directed the FBR to reply at the earliest. Another petitioner has challenged the legitimacy of the Section 7E introduced by the FBR I n Finance Bill 2022. It was also highlighted in the petition that instead of Parliament the provincial legislature is eligible to tax immovable property.
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The Federal Board of Revenue (FBR) proposed Rs 153 billion taxes on immoveable property through Finance Bill 2022. The proposed tax on deemed income from an unused property above Rs 25 million including luxury farmhouses have been introduced. The federal revenue body has also enhanced the capital gain tax from 2 percent to 5 percent for non-filers and from 1 percent to 2 percent for filers. Similarly, The Capital Value Tax at a rate of one percent is imposed on foreign immovable properties of Pakistani residents and a one percent tax on the liquid foreign assets of Pakistanis is proposed. The FBR has also proposed a 2 percent tax on earners of above Rs 300 million annually. These proposed taxes that will come into effect from July 1 2022 has not gone down well with the real estate agents and builders who have termed them detrimental to the construction sector.
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It is relevant to mention here that the FBR has notified that the tax on the citizens have to pay the tax on deemed income on immoveable properties by Sep 30 2022. There is a severe sense of resentment among the builders, dealers, developers and property owners in this regard. It is also to be mentioned here that the previous government had given special incentives for investing in the real estate sector not only for providing necessary accommodation to the low segment of the society but also to boost economic activities in the country.