When an individual filer sells property in Pakistan, the gain arising from this disposal is generally chargeable to tax under the head "Capital Gains" as per the Income Tax Ordinance, 2001. The specific tax rates depend on the date the property was acquired and its holding period, as outlined in Division VIII of Part I of the First Schedule. Additionally, an advance tax is collected at the time of the property's sale or transfer.
Here are the rates of tax on selling property for an individual filer, based on the latest available information in the sources:
Capital Gains Tax Rates (Division VIII of Part I of the First Schedule)
The tax rates vary based on whether the property was acquired on or before June 30, 2024, or on or after July 1, 2024, and the type of property (Open Plots, Constructed Property, or Flats).
1. For Properties Acquired on or Before 30th Day of June, 2024:
Open Plots:
- Holding period not exceeding one year: 15%
- Holding period exceeding one year but not exceeding two years: 12.5%
- Holding period exceeding two years but not exceeding three years: 10%
- Holding period exceeding three years but not exceeding four years: 7.5%
- Holding period exceeding four years but not exceeding five years: 5%
- Holding period exceeding five years but not exceeding six years: 2.5%
- Holding period exceeding six years: 0%
Constructed Property:
- Holding period not exceeding one year: 15%
- Holding period exceeding one year but not exceeding two years: 10%
- Holding period exceeding two years but not exceeding three years: 7.5%
- Holding period exceeding three years but not exceeding four years: 5%
- Holding period exceeding four years but not exceeding five years: 0%
Flats:
- Holding period not exceeding one year: 15%
- Holding period exceeding one year but not exceeding two years: 7.5%
- Holding period exceeding two years: 0%
2. For Properties Acquired on or After 1st Day of July, 2024:
- Where the holding period does not exceed one year: 15% for persons appearing on the Active Taxpayers’ List on the date of acquisition and the date of disposal of securities.
- Note on Ambiguity: This specific entry, while found under the "Capital Gains on Disposal of Immovable Property" section, mentions "securities" instead of "properties". As the broader context of Division VIII is immovable property, this rate is presented as applicable to properties, though the wording contains an apparent discrepancy in the source document. The sources do not explicitly provide rates for holding periods exceeding one year for properties acquired on or after July 1, 2024.
Advance Tax on Sale or Transfer of Immovable Property (Division X of Part IV of the First Schedule)
In addition to the capital gains tax, an advance tax is collected at the time of registering, recording, or attesting the transfer of any immovable property under section 236C of the Income Tax Ordinance, 2001. This advance tax is generally adjustable against the taxpayer's final tax liability.
The rates for this advance tax, based on the gross amount of consideration received, are as follows:
- Where the gross amount of consideration received does not exceed Rs. 50 million: 4.5%
- Where the gross amount of consideration received exceeds Rs. 50 million but does not exceed Rs. 100 million: 5%
- Where the gross amount of consideration received exceeds Rs. 100 million: 5.5%
It is important to note that these rates apply to the collection of advance tax at the time of transaction and are separate from the capital gains tax rates that determine the final tax liability on the profit from the sale.
