Islamabad: The Federal Board of Revenue (FBR) has clarified that builders and developers operating under the special tax regime (Section 7F of the Income Tax Ordinance 2001) are eligible for exemption from withholding tax under Section 236C on the sale of immovable property.
Under the special tax regime, these developers pay tax on a fixed percentage of their gross receipts. Since withholding tax under Section 236C is generally adjustable against other taxable income, its deduction can create a liquidity burden for developers with no other taxable income.
Eligible builders and developers can now apply to the concerned Commissioner of Inland Revenue for an exemption certificate, which authorizes the non-collection of withholding tax on property sales. Applications will be assessed on a case-by-case basis to ensure all conditions for exemption are met.
The FBR emphasized that prescribed timelines for issuing such certificates by the Commissioner and Chief Commissioner will apply automatically.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
