More bad news for the real estate/property market in Punjab. Just when the sluggish property market was awaiting a sigh of relief from the new government, bad news came from the Lahore High Court. A section that had been suspended in 2023 has now been reinstated. This simply means that the applicability of section 7E of the Income Tax Ordinance 2001 will now be enforced across Punjab.
What Do You Need to Know About Section 7E?
Understanding the provisions of this section could be difficult and technical for many. That’s why we covered this topic in some detail from a layman’s perspective in this blog:
Making Section 7E Easy to Understand: Your Guide to the 2001 Income Tax Ordinance!
If you haven’t already, we highly urge you to read it, especially if you own a rental property, etc. In any case, what the enforcement of this section means is this:
Why Is This Section Being Enforced Now? Why Not Before?
To answer this question, we need to tell you the chronology of events surrounding this section. So here it goes:
- The Income Tax Ordinance of 2001 was amended in July 2022 with the inclusion of section 7E.
- This section was challenged in the Lahore High Court on the grounds that the federal government cannot collect this tax as it is not income tax but rather property tax that only local governments can collect.
- Agreeing with the petitioner, on April 6, 2023, the Lahore High Court suspended its enforcement.
- However, the Lahore High Court’s order was challenged by the government.
- On February 15, 2024, the Lahore High Court reversed its initial order and made section 7E applicable all across Punjab.
The provisions of section 7E come into effect on 15-02-2024. If you own a rental property or you are in the property business, we are interested in hearing your views. If you are looking to buy or sell your property, don’t look beyond OLX Property portal.
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