Federal Board of Revenue Relaxes Conditions for Sellers of Immovable Property

After the repeated concerns raised by realtors and property stakeholders jn Pakistan, the FBR has recently announced a significant relaxation in the Section 7E of the Income Tax Ordinance, 2001. In this change, Federal Board of Revenue Relaxes Conditions for Sellers of Immovable Property to provide clarity, and foster a more efficient and transparent property market.

What is Revised Circular No. 3 on 7E

The FBR’s decision was convey through the issuance of Circular No. 3 of Income Tax on August 15, 2023. This comes in response to the influx of appeals the FBR received concerning the methods of presenting evidence for the application of Section 7E. As outlined in sub-section (2A) of section 236C of the Income Tax Ordinance, the section has eased the tension prevailed in the real estate market. The modification has been introduce to eliminate complications arising from the introduction of sub-section (2A).

Key Highlights of the Modified Conditions

Exemption for Non-Resident Individuals

Non-resident individuals, including non-resident Pakistanis, have been granted an exemption from tax under section 78. Consequently, the conditions specified in Circular No. 1 will not be applicable to them. However, they are required to submit pertinent documents along with a duly completed form to the transferring authority.

Special Cases Exempted

Individuals falling under specific categories such as Shaheeds (martyrs) or their dependents. Armed forces personnel, war-wounded soldiers, and ex-servicemen will also be exempt from the conditions of Circular No. 1. This exemption is subject to the provision of valid evidence.

Exemption for First-Year Property Acquisition

Properties acquire with in the first year, tax will be under section 236K having been pay by the purchaser. Will be exempt from the provisions of Section 7E. In such cases, the seller must furnish a Computerized Payment Receipt (CPR) to the transferring authority. Agriculture Property Exemption Immovable property exclusively used for agriculture and excluding farmhouses will not fall under the purview of Section 7E. However, if farmhouses are involve, the conditions set out in Circular No. 1 will be applicable.

Relaxation For Realtors & Property Developers


Exemption for Registered Local Authorities and Developers

Immovable property owned by local authorities, development authorities, builders, or developers registered with the Directorate General of Designated Non-Financial Business and Professions (DNFBP) will also be exempt. These entities are require to provide valid certificates to the transferring authority.


For Property sellers and stakeholders within the real estate industry. These new changes in property tax laws hold the promise of a more streamlined and efficient process. It will reduce complexities and facilitate smoother property transactions. To learn more about this law, visit our online property portal or dial 0304-111-0309 for real estate consultancy.

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