Tax Book 2023

Income From Property Chapter- 08

Pakistan source property

income [Section 101(9)]:

If it is derive from the lease of

immovable property in Pakistan

including a right to explore for, or

exploit, natural resources in

Pakistan.

Resident / Non-resident

person

 Taxable [Section 11(5) and (6)]

 Exemptions, tax credits and

terms and conditions of double

taxation treaty agreements, if any

shall also be considered.

Foreign source property

income

Property income other than

above

a. Resident person

 Taxable [Section 11(6)]

 Exemptions, tax credits and

terms and conditions of double

taxation treaty agreements, if any

shall also be considered.

b. Short term resident

[For all foreign source

income]

[Section 50]

An individual shall be exempt in

respect of his foreign-source

income which is not brought /

received in Pakistan if he is

resident only by reason of his

employment and he is present in

Pakistan for not exceeding 3 years.

c. Returning expatriate

[Citizen of Pakistan

coming back in

Pakistan]

[For all foreign source

income]

[Section 51]

If an individual citizen of Pakistan

(returning expatriate) is resident in

the current tax year but was non-

resident in the 4 preceding tax

years, his foreign-source income

shall be exempt in current tax year

and in the following tax year.

Non-resident individual Not taxable [Section 11(6)]

9. Property income not taxable / entitled to tax credit:

(1) Property used by owner for his own business or personal use is not taxable;

(2) Property owned by a Trust, welfare institution or and NPO etc. are now entitled to tax credit

under section 100C of the Income Tax Ordinance, 2001 on fulfilment of specified conditions.

Tax rates for income from property for the tax year 202 3

Sr. Gross Amount of Rent Rate of Tax

1. Where the gross amount of rent does not
   exceed Rs. 6 00,000.

NIL

2. Where the gross amount of rent exceeds
   Rs. 6 00,000 but does not exceed Rs. 8 00,000.

5 % of the gross amount exceeding

Rs. 6 00,000

3. Where the gross amount of rent exceeds
   Rs. 8 00,000 but does not exceed Rs.1, 2 00,000.

Rs. 1 0,000 plus 12.5% of the gross amount

exceeding Rs. 8 00,000