Islamabad: According to the news reported on August 6, the Federal Board of Revenue (FBR) recently ordered a temporary suspension of the anticipated increase in the assessment of real property until September 2023. According to reports, at the FBR headquarters, the issue was thoroughly reviewed with representatives from the real estate industry by FBR Chairman Amjad Zubair Tiwana and a team of tax authorities. It was decided by both parties to put off issuing new property values until September 2023. FBR had previously been introducing new values this month. It was revealed that each city will form local committees to determine new property valuations in collaboration with real estate associations. In September 2023, the board will get together once more to decide on a uniform 10% rise in values for all immovable properties.
Moreover, the board will introduce an online feature in the updated ‘IRIS’ system, enabling citizens to apply for an exemption or pay the 1% tax on immovable properties under Section 7E without involving the Commissioner of Inland Revenue (FBR). This move aims to eliminate the discretion of Commissioners Inland Revenue in deciding the Income Tax Ordinance, 2001, Section 7E matters.
According to the Finance Act of 2022, a new Section 7E was introduced in the ordinance, which requires residents to declare 5% of the fair market value of their domestic capital assets as income. This income is then taxed at a rate of 20%, effectively amounting to 1% of the property value. The FBR has acknowledged problems with implementing the new section. It has assured that the powers of Section 7E will not be misused by the Commissioner of Inland Revenue when granting exemptions.