Islamabad: The Federal Board of Revenue (FBR) has been approached to introduce a clear refund policy for taxes collected under Section 7E and Super Tax provisions of the Income Tax Ordinance, 2001, following court rulings that affected the applicability of both levies.
According to reports, Waheed Shahzad Butt, an advocate of the Supreme Court of Pakistan, wrote to FBR Chairman Rashid Mahmood Langrial through senior tax policy and operations officials, requesting a formal mechanism for taxpayers to reclaim amounts paid or recovered under the contested provisions.
The request follows rulings by the Federal Constitutional Court (FCC) concerning Section 7E, which imposed deemed income tax on immovable property, and Section 4C, relating to Super Tax on high earners.
In its ruling on Section 7E, the FCC declared the provision unconstitutional and void from the outset, setting aside notices and proceedings initiated under it. Introduced through the Finance Act 2022, the levy applied to immovable properties valued above Rs25 million and imposed tax based on five per cent of the FBR-assessed fair market value.
On Super Tax, the court upheld its constitutional validity but excluded certain exempt capital gains from its scope. Legal interpretations following the judgment suggest the tax cannot be imposed on exempt income, including gains from inherited immovable property or assets held beyond prescribed periods.
The request urged the FBR to issue policy-level guidance on refund procedures, direct field offices to ensure uniform treatment of claims, and specify application formats or forums for filing requests.
According to the representation, no dedicated refund mechanism has yet been notified for either Section 7E or Super Tax, leaving taxpayers without a clear process to recover payments now deemed unlawful or inapplicable.
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