FBR loses appeal as court scraps Section 7E tax rule

ISLAMABAD: The Federal Constitutional Court on Thursday struck down Section 7E of the Income Tax Ordinance, declaring the provision unconstitutional and dismissing appeals filed by the Federal Board of Revenue (FBR) seeking its restoration.

FCC Chief Justice Aminuddin Khan read out the short order, annulling all actions taken under the provision.

Section 7E had imposed tax on deemed income from immovable properties, including unused plots, and had faced legal challenges in multiple high courts across the country.

The Peshawar, Balochistan and Sindh high courts had earlier declared the provision void, while the Islamabad and Lahore high courts had upheld it as constitutional.

The constitutional court allowed appeals filed by citizens against the Islamabad and Lahore high courts’ rulings, ultimately striking down the law.

The verdict had been reserved on April 30.

The decision is expected to provide relief to Pakistan’s real estate sector.