Don't wait until the last minute to file Tax Returns! Use coupon code EarlyBird on our store for 20% off on all of our services. Valid through July 31, 2026. Dismiss

Do you know?

Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. •

₨ 0

Do you know?

Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. •

Property Gains Tax Exemptions for Overseas Pakistanis

Selling property in Pakistan as an overseas Pakistani? Learn about the 0% capital gains tax exemption, key conditions, and how to qualify. Save tax legally!

For overseas Pakistanis considering selling property back home, there’s potentially good news regarding capital gains tax. It’s often stated that overseas Pakistanis enjoy a 100% exemption on this tax, meaning they pay nothing. While enticing, this isn’t automatically true and hinges on fulfilling specific conditions. This article clarifies the situation, explaining the conditions for this tax exemption and the underlying legal framework.

Property Taxes in Pakistan

When selling property in Pakistan, it’s crucial to understand the different property taxes involved. Beyond standard charges like stamp duty or registration fees, income tax, advance tax and capital gains tax are significant consideration. Specifically, within income tax, there are two key components when selling property:

Section 236C Tax (Transaction Tax): This is a tax levied on the transaction itself, at the time of sale. While often referred to as a fixed tax, there are mechanisms for potential relief, but it’s generally considered a minimum tax payable at the point of sale.
Capital Gains Tax (CGT): This tax is levied on the profit you make from selling the property. It’s calculated on the difference between your sale price and your original purchase price. For local Pakistanis, the standard Capital Gains Tax rate is 15% on profits from properties purchased after July 2024, regardless of how long they’ve been held. This marked a change from previous rules where longer holding periods could reduce or eliminate CGT.

Capital Gains Tax Exemptions for Overseas

While local Pakistanis generally face this 15% Capital Gains Tax on property profits, overseas Pakistanis can potentially achieve a 0% rate. However, this isn’t automatic. To qualify for this exemption, you must meet three key conditions:

Status as a NICOP or POC Holder: You must be a Non-resident Pakistani holding a National Identity Card for Overseas Pakistanis (NICOP) or a Pakistan Origin Card (POC). This confirms your status as an overseas Pakistani in the eyes of the law.
Property Purchase Method Matters: This is the most crucial and often overlooked condition. The way you initially purchased the property significantly impacts your CGT liability at the time of sale. To qualify for the 0% exemption, the funds used to purchase the property must have been remitted to Pakistan through specific banking channels. Purchases made using funds from regular Pakistani Rupee accounts may not qualify for the exemption.
Utilizing Specific Account Types for Remittance: The funds for the property purchase must have been sent to Pakistan and routed through either of these two account types:
- Foreign Currency Value Account: This is a specific type of account designed for foreign currency holdings.
- Non-Resident Rupee Value Account: This is a special Rupee account specifically for non-resident Pakistanis.
- (Roshan Digital Account): While not explicitly mentioned in the primary legal sections initially discussed, Roshan Digital Accounts are also generally understood to qualify for this exemption as they are designed to facilitate foreign remittances by overseas Pakistanis.

Why These Conditions?

These conditions are not arbitrary. The Pakistani government incentivizes overseas Pakistanis to send remittances through formal banking channels and invest in the country. By channeling property purchase funds through Foreign Currency or Non-Resident Rupee Value accounts, you are bringing foreign currency into Pakistan, which benefits the national economy. In return for this contribution, the government offers the significant benefit of Capital Gains Tax exemption upon selling that property.

Illustrative Example

Imagine you, an overseas Pakistani with a NICOP, purchased a property in Pakistan in September 2024 for 10 million Rupees. You funded this purchase by remitting funds from your overseas account to a Non-Resident Rupee Value account in Pakistan, and then used those funds to buy the property. Years later, in 2028, you sell the same property for 20 million Rupees, making a profit of 10 million Rupees.

If you met the three conditions, particularly condition number 3 regarding the account type used for purchase, you would likely be exempt from the 15% Capital Gains Tax on your 10 million Rupee profit. You would still pay the 4.5% Section 236C tax at the time of sale.
However, if you purchased the property using funds from a regular Pakistani Rupee account (perhaps funds already in Pakistan or not remitted through the specified channels), you might not qualify for the 0% CGT and could be liable for the 15% Capital Gains Tax on your profit, in addition to the 236C tax.

Purchase Property with Sale in Mind

The crucial takeaway is that tax planning needs to happen at the time of purchase, not sale. If you are an overseas Pakistani intending to benefit from the 0% Capital Gains Tax exemption when you eventually sell your property, you must ensure your initial purchase is funded through a Foreign Currency Value Account or a Non-Resident Rupee Value Account (or Roshan Digital Account).

Where to Verify the Rules

For precise legal details, refer to the Income Tax Ordinance of Pakistan, specifically Section 236C and related sections. You can find the Income Tax Ordinance online and consult page 480 (or search for relevant sections as page numbers may vary in different editions). Furthermore, for information on opening Foreign Currency Value Accounts and Non-Resident Rupee Value Accounts, visit the websites of the State Bank of Pakistan and commercial banks operating in Pakistan.

Informed Decisions for Tax-Efficient Property Transactions

Understanding these conditions is vital for overseas Pakistanis engaging in property transactions in Pakistan. By adhering to the specified requirements, particularly regarding the method of funding your property purchase, you can potentially unlock significant tax savings and benefit from the 0% Capital Gains Tax exemption. Always ensure you consult with tax advisors and refer to the most up-to-date legal and financial information to make informed decisions about your property investments and sales in Pakistan.

Mah Noor

An aspiring Chartered Accountant with a growing footprint in Pakistan’s tax education and digital finance content landscape. Currently, I work as the Editor-in-Chief at TaxationPk, where I lead content strategy, quality control, and editorial planning for tax-related blogs, news articles, and social media outreach.

Articles: 36

11 Comments

Hamza Haneef

July 24, 2025 / 7:19 pm Reply

How do I get in touch with you for tax advice on property? I am non-resident with a foreign passport
- Hayat Akbar
  
  July 24, 2025 / 10:36 pm Reply
  
  You can reach our 24/7 Premium WhatsApp Helpline.
Muhmmed Tufail butt

June 21, 2025 / 12:03 pm Reply

Sir with Recpect you I am 45yaer work in foren county foter ritard 2017nov came Pakistan My Sim also black pleas wrigt me
Muhammadanwar

June 16, 2025 / 3:05 pm Reply

Can you please provide the DC rate information for agricultural land in Dara No. 1, District Mansehra?”
- Hayat Akbar
  
  June 17, 2025 / 1:06 am Reply
  
  You can find the list of all cities and their properties values.
JK

February 28, 2025 / 12:59 am Reply

After my father passing we acquired his property in Pakistan. We are NICOP holderwith foreigh passports.We want to sell the house and wondering how hoops we have to jump?
- Hayat Akbar
  
  February 28, 2025 / 1:37 am Reply
  
  Dealing with inherited property in Pakistan, especially when you are an NICOP holder with a foreign passport, involves several important steps. If you could be specific in your question, it will be easy for us to breakdown of the key hoops you’ll likely need to jump through
- Farrukh Saeed
  
  April 4, 2025 / 10:51 am Reply
  
  Let me know if you need any information
  - Arsalan Jawed
    
    July 1, 2025 / 11:00 pm Reply
    
    My brother is a non resident pakistani purchasing property in rawalpindi. We are looking around for tax exemption certificate can you guide where to go and how to get this done
    - Hayat Akbar
      
      July 1, 2025 / 11:12 pm Reply
      
      Overseas Pakistani are not exempt from taxes. However, they don’t need to be active-filers and can pay taxes applicable for active filers in Pakistan. These taxes are adjustable/refundable. For this you will need to generate PSID online for overseas Pakistani. Overseas can pay 1% taxes considered as final but needs to be done from your Regional Tax Office, for this the amounts should be transferred to sellers via roshan digial accounts.
      - Basit
        
        July 16, 2025 / 4:11 am
        
        1% OR 1.5% please clear it. as the DC office share the rate to me is 1.5% have to be paid which is minimum tax amount.