Is any friend aware about how much tax is charged on rental income from a house located outside cantonment area lime in Rawalpindi city?
Is it only FBR tax on rental income or there is some other city municipality/authority that collects tax in addition to FBR tax?
Like for rented houses within area of Rawalpindi cantonment board, there is 15% tax on yearly rental value, which is charged in addition to FBR tax on rental income. Ironic part is that tax paid to cantt isn’t considered as tax by FBR but you can deduct it as an expense only.
Please help and respond
Hi Shahzad,
As far as i know there was proposed tax on rental income in the budget, which suggested that immovable property worth over Rs25 million shall be deemed to have received a rent equal to 5pc of the fair market value of the property and shall pay a tax at the rate of 1pc of its market value.
Source: RCCI demands withdrawal of property tax on rental income - Newspaper - DAWN.COM
I cannot be sure if the tax was imposed after budget or not.