Tax Vibz Pak

Tax Vibz Pak Empowering Pakistanis with tax awareness 🌿
Learn today — consult tomorrow with TaxVidz PK

19/05/2026

*Federal Board of Revenue has warned taxpayers of strict legal action for failing to declare property details in income tax returns for tax year 2026.*

The tax authority said it already possesses withholding tax data related to property transactions and will cross-check declarations submitted by taxpayers against its database.

FBR issues tax return forms for 2026

A day earlier, the FBR issued income tax return forms for tax year 2026 for salaried individuals, business persons and companies with financial years ending in June.

According to the tax authority, taxpayers are required to provide complete details of:

• Properties declared in previous tax returns
• Newly purchased properties during tax year 2026

The FBR emphasized that undeclared assets identified through database matching could lead to legal proceedings under tax laws.

Property transaction data already available with FBR

The FBR stated that withholding tax information on property transactions is already stored in its digital database.

Under Section 236C and Section 236K of the Income Tax Ordinance, 2001, withholding tax is collected on the sale and purchase of immovable properties.

The authority uses this information for cross-matching taxpayers’ declared assets and financial records.

Officials said any discrepancy between property transactions and declared assets may trigger enforcement action.

Strict penalties for non-disclosure

The FBR reminded taxpayers that the Income Tax Ordinance, 2001 contains strict penalties and fines for non-disclosure or incorrect reporting of assets in tax returns.

Tax experts say the tax authority has significantly enhanced its digital monitoring and data integration systems in recent years, allowing improved tracking of property ownership and financial transactions.

Taxpayers advised to ensure accurate declarations

Tax consultants have advised individuals and businesses to carefully review their tax returns and ensure all movable and immovable assets are properly disclosed.

Accurate property declarations are considered essential to avoid penalties, notices and potential legal proceedings from the tax authorities.

The FBR has continued efforts to improve documentation of the economy and expand the national tax base through stricter compliance measures and data-driven enforcement.

19/05/2026

*FBR issues draft income tax return forms for tax year 2026*

*Federal Board of Revenue on Thursday issued draft income tax return forms for individuals for tax year 2026 and sought feedback from stakeholders before finalising the forms for the upcoming filing season.*

*The tax authority issued SRO 835(I)/2026 to notify the draft electronic income tax return forms and invited taxpayers, tax practitioners and other stakeholders to submit input within seven days.*

*According to the draft return forms, taxpayers will be required to provide a summary of their economic transactions for the selected tax year.*

*“Please review available data of your economic transactions for the selected tax year. This is indicative data which keeps on updating as per available information. Therefore, correct reporting of income and tax thereon is primarily your own responsibility,” the FBR said in the draft instructions.*

*Under the salary income section, salaried individuals will have to provide employer registration numbers, employer names and details of deductions made during the year.*

*The draft forms also require taxpayers to declare income earned from property during tax year 2026.*

*In addition to forms for salaried individuals, the FBR also issued draft return forms covering business income categories.*

*Tax experts said the early release of draft forms indicates that the authorities intend to begin the annual tax return filing season on July 1, 2026, allowing taxpayers the standard three-month filing period ending on September 30, 2026.*

*Pakistan has been focusing on improving tax compliance and documentation of the economy as part of broader fiscal reforms linked to ongoing programmes with the International Monetary Fund.*

SRO link 👇🏻
https://www.fbr.gov.pk/Downloads/?id=17667&Type=SROs

18/05/2026

*SECTION 7E [STRUCK DOWN BY FEDERAL CONSTITUTIONAL COURT]*

*LEGAL UPDATE [SECTION 7E OF INCOME TAX ORDINANCE, 2001 (REPORTED JUDGMENT)]*

It is hereby noted that the Federal Constitutional Court of Pakistan has reportedly declared Section 7E of the Income Tax Ordinance, 2001, as ultra vires the Constitution and struck it down as void ab initio through Short Order dated 07 May 2026 in C.P.L.A.1442-K/2022 and connected cases.

Section 7E, introduced through the Finance Act, 2022, had imposed a deemed tax of [1%] on the fair market value of immovable property, even in cases where no actual income or rental yield was generated. The provision had been subject to constitutional challenges before various High Courts, resulting in divergent judgments across jurisdictions.

*AS PER THE REPORTED OUTCOME:*

👉🏻Appeals filed by taxpayers against the judgments of the Sindh High Court and Lahore High Court have been allowed.

👉🏻Appeals of the FBR against the judgments of the Peshawar and Balochistan High Courts have been dismissed.

👉🏻All notices, assessments, and proceedings initiated under Section 7E have been set aside as being without lawful authority.

Since the provision has been declared void ab initio, it is to be treated as if it had never existed from its inception in 2022. Consequently, all pending demands raised under SECTION 7E STAND NULLIFIED.

IMPORTANT NOTE FOR TAXPAYERS AND RECOMENDATIONS:
Taxpayers who have already discharged tax under the said provision may evaluate and pursue the possibility of refund claims under Sections 170 and 171 of the Income Tax Ordinance, 2001, subject to fulfilment of the prescribed legal requirements and applicable conditions.

However, considering that the detailed reasons of the judgment are yet to be issued by the Honorable Court, it is prudently advisable to await the complete reasoned judgment before initiating formal refund proceedings or revising previously filed returns.

However, as the detailed reasons are yet to be issued, it is advisable to await the full reasoned judgment before initiating any formal refund claims or revising returns.

CONCLUSION AND RECOMMENDATIONS

In light of the reported Short Order dated May 07TH 2026, passed by the Honorable Federal Constitutional Court of Pakistan, Section 7E of the Income Tax Ordinance, 2001, has effectively been rendered unconstitutional and without lawful authority, subject to the detailed reasons yet to be issued.

Accordingly, all pending proceedings, notices, assessments, and demands initiated under the said provision are likely to lose legal enforceability. Furthermore, taxpayers who have already discharged tax under Section 7E may potentially seek relief through refund mechanisms available under the Income Tax Ordinance, 2001.

Nevertheless, from a legal and procedural standpoint, taxpayers and practitioners should await the detailed judgment of the Honorable Court before adopting any formal course of action, including filing refund claims, rectification applications, or revised returns, to ensure complete compliance with the reasoning and directions to be laid down in the final judgment.

*DISCLAIMER:*
*The guidance note is valid according to the legislation, Ordinances, Rules, and Regulations in force as of the date of this opinion, which is [May 7th, 2026]. We advise users of this opinion to contact us if any changes are made to the legislation, Ordinances, Rules, and Regulations, and to request updated opinions.*

Regards
*Muhammad Safdar (FCA) [Senior Partner] *
*Tariq Abdul Ghani & Co.(Chartered Accountants)*

*🚨 Major Relief for Property Owners: Section 7E is Officially History Now! 🏛️🚫**The Federal Constitutional Court just st...
18/05/2026

*🚨 Major Relief for Property Owners: Section 7E is Officially History Now! 🏛️🚫*

*The Federal Constitutional Court just struck down Section 7E of the Income Tax Ordinance, declaring it _ultra vires_ (unconstitutional). If you’ve been following this real estate rollercoaster, you know this is a huge deal.*

Rewind: What was Section 7E? 🤔
Introduced in the Finance Act 2022, Section 7E created a controversial tax on "deemed income" from real estate. Even if your (more than one) property was just sitting there generating zero rent, the law assumed it was generating an income equal to 5% of its fair market value—and slapped a federal tax on that imaginary money.

The Core Issue: A Constitutional Overstep** ⚖️
People were understandably frustrated, but the real issue was a legal one. Under Pakistan’s Constitution, the Federal Government has the authority to tax actual *income*, but taxing immovable property itself is strictly a Provincial power. Legal experts argued that by dressing up a property tax in the disguise of an "income tax," the federal government was overstepping its boundaries.

The Final Verdict 🏛️
The Federal Constitutional Court agreed. By ruling Section 7E *ultra vires* (which literally means "beyond the powers"), the Court confirmed that the federal government simply didn't have the legal authority to impose this specific tax.

This decision restores a clear constitutional boundary and brings a massive sigh of relief to property owners across the country! 🏠✨

https://drive.google.com/file/d/1_1UyPvS_rpDLn26Mym6QgySuujG-eKtK/view?usp=drivesdk

17/05/2026

when a company falls under the minimum tax regime u/s 113 of the Income Tax Ordinance, 2001, the tax liability is calculated based on turnover instead of normal taxable income.

*Advance tax already paid is NOT ignored*

*It is adjusted against the final minimum tax liability*

So practically, advance tax serves as a credit and is adjusted, not wasted or expensed.

*Annex - L*
17/05/2026

*Annex - L*

*Update for OMCs**Annexure L is to be introduced whereby sales invoices pertaining to Petroleum Development Levy [PDL] a...
17/05/2026

*Update for OMCs*

*Annexure L is to be introduced whereby sales invoices pertaining to Petroleum Development Levy [PDL] and Climate Support Levy [CSL] will be recorded in the monthly sales tax returns*

*Currently, it is just added as a payable figure as a separate line item without any separate annexure*

*SRO 🔗*
https://www.fbr.gov.pk/Downloads/?id=17666&Type=SROs

16/04/2026

*📢 FBR Proposes New Tax Regime for Social Media Income*
The Federal Board of Revenue has introduced draft rules to tax income earned by resident individuals from social media platforms like YouTube and other monetized channels.

Key Features of the Proposal:

>> Applies to earnings from:
- YouTube
- Monetized social media platforms
- Digital content creation

>> Standard Deduction Allowed
- Expenses allowed: Up to 30% of total revenue
- Remaining income treated as taxable

>>Minimum Income Benchmark (RPM Model)
Income will be calculated as the higher of:
- Actual income received, OR
- Estimated income based on Average views and Number of posts

In simple terms: Under-reporting won’t work anymore:

- Quarterly Advance Tax (Section 147) will be mandatory.
- Separate Disclosure Required
- Social media income must be declared separately in tax returns

FBR’s Power to Recalculate Income:

If declared income is lower than formula-based income, the FBR may revise and recover additional tax

⚖️ Why This Matters

This signals:
- A shift toward algorithm-based taxation
- Increased scrutiny on digital earners
- Reduced flexibility in income declaration

But raises questions:
- Is a fixed RPM realistic across niches?
- What about fluctuating ad rates and geography-based earnings?

💼 If you earn through social media:
- Maintain proper income records
- Track views & engagement data
- Plan for quarterly tax payments

*Don’t rely on “rough estimates” anymore*

*Invoice correction option available in Digital invoice.*
16/04/2026

*Invoice correction option available in Digital invoice.*

📢 Update: FBR E-Invoicing System (72-Hour Edit Option Activated)
16/04/2026

📢 Update: FBR E-Invoicing System (72-Hour Edit Option Activated)

Address

Makkaha Colony Fridos Market
Lahore
54000

Website

Alerts

Be the first to know and let us send you an email when Tax Vibz Pak posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Shortcuts

Share