The Federal Board of Revenue has introduced new relief measures aimed at easing tax procedures for property developers and builders across Pakistan.
Under the new directive, authorities must issue withholding tax exemption certificates within seven working days, provided applicants have fulfilled all required tax obligations.
According to the latest circular, if a complete application is submitted and no response is given within the deadline, the exemption certificate will be automatically issued through the IRIS system.
The clarification relates to Section 236C of Income Tax Ordinance and Section 7F of Income Tax Ordinance, which govern advance tax on property transactions and the special tax regime for developers.
Under Section 7F, developers are taxed on a fixed percentage of gross receipts instead of traditional profit-based taxation, a system designed to simplify compliance.
Previously, developers raised concerns that withholding tax under Section 236C created liquidity issues, as adjustments were difficult due to limited taxable income under the special regime.
The FBR has now clarified that developers who have fully paid their tax under Section 7F and have no additional taxable income can apply for exemption from advance tax collection.
Applications must be submitted under Section 159 of Income Tax Ordinance to the relevant Commissioner Inland Revenue, with each case reviewed based on compliance with legal requirements.
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