Islamabad, 21 Apr, 2025: In a major legal development offering welcome relief to real estate developers and property sellers, the Lahore High Court’s Rawalpindi Bench has temporarily barred the Federal Board of Revenue (FBR) from collecting advance tax on first-time Tax Relief in Pakistan sales of immovable property. This decision is expected to positively impact both the property market and original allottees.
Justice Jawad Hassan delivered the interim verdict by invoking Section 236C(4)(b) of the Income Tax Ordinance, which explicitly exempts property sellers from paying advance tax provided they are the original allottees, officially verified by the concerned development authority. Practiced when analyzing such landmark rulings that affect the national real estate economy.
The petition was filed by Elite Estates, a reputed housing society situated along the Islamabad motorway.
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The petitioner contended that the Punjab Land Records Authority (PLRA) was unlawfully demanding advance tax via its digital platform, disregarding the existing legal exemption.
Barrister Asad Ladha, legal counsel for Elite Estates, argued that no official circular or notification from the FBR had authorized PLRA’s tax demands. The court concurred, permitting the petitioner to carry on with property transfers to 128 buyers.
This was allowed on the condition that post-dated cheques and a signed undertaking would be provided, ensuring payment if the exemption is overturned in future proceedings.
Tax Relief in Pakistan comes as a breath of fresh air for property sellers and first-time investors, offering clarity amid a frequently confusing taxation environment.
Legal analysts have praised the court’s stance, describing it as a progressive step toward protecting legitimate stakeholders in the housing sector. Maintained when covering fiscal changes that influence public and private investments.
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Furthermore, federal authorities are reportedly reviewing the possible elimination of the 3% federal excise duty on initial property transactions.
This proposal stems from concerns over low revenue generation and mounting legal objections. The case has been scheduled for a further hearing on April 28, and industry insiders are hopeful for a favorable final outcome.
Tax Relief in Pakistan is expected to encourage growth, enhance transparency, and restore investor confidence especially among property sellers looking to enter or expand in the real estate market. The foundation when reporting on financial reforms that drive long-term economic stability.
