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Income from property
(1) The rent received or receivable by a person for a tax year, other than rent exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head Income from Property.
(2) Subject to sub-section (3), rent means any amount received or receivable by the owner of land or a building as consideration for the use or occupation of, or the right to use or occupy, the land or building, and includes any forfeited deposit paid under a contract for the sale of land or a building.
(3) This section shall not apply to any rent received or receivable by any person in respect of the lease of a building together with plant and machinery and such rent shall be chargeable to tax under the head Income from Other Sources.
(3A) Where any amount is included in rent received or receivable by any person for the provision of amenities, utilities or any other service connected with the renting of the building, such amount shall be chargeable to tax under the head Income from Other Sources.
(4) Subject to sub-section (5), where the rent received or receivable by a person is less than the fair market rent for the property, the person shall be treated as having derived the fair market rent for the period the property is let on rent in the tax year.
(5) Sub-section (4) shall not apply where the fair market rent is included in the income of the lessee chargeable to tax under the head Salary.
(2) Subject to sub-section (3), rent means any amount received or receivable by the owner of land or a building as consideration for the use or occupation of, or the right to use or occupy, the land or building, and includes any forfeited deposit paid under a contract for the sale of land or a building.
(3) This section shall not apply to any rent received or receivable by any person in respect of the lease of a building together with plant and machinery and such rent shall be chargeable to tax under the head Income from Other Sources.
(3A) Where any amount is included in rent received or receivable by any person for the provision of amenities, utilities or any other service connected with the renting of the building, such amount shall be chargeable to tax under the head Income from Other Sources.
(4) Subject to sub-section (5), where the rent received or receivable by a person is less than the fair market rent for the property, the person shall be treated as having derived the fair market rent for the period the property is let on rent in the tax year.
(5) Sub-section (4) shall not apply where the fair market rent is included in the income of the lessee chargeable to tax under the head Salary.
Amendment history (11)
- Substituted for the word “in” by the Finance Act, 2003.
- Inserted by the Finance Act, 2003.
- Sub-section (6) omitted by the Finance Act, 2013. The omitted sub-section (6)
- Sub-section (7) omitted by the Finance Act, 2013. The omitted sub-section (6)
- Clause (6) inserted by the Finance Act, 2016.
- Clause (6) omitted by the Finance Act, 2021. The omitted clause
- Clause (7) inserted by the Finance Act, 2016.
- Clause (7) omitted by the Finance Act, 2021. The omitted clause
- Inserted by the Finance Act, 2013.
- The word “person” substituted by the Finance Act, 2016.
- The word “company” substituted by the Finance Act, 2021.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 57
Unofficial reference, compiled from the FBR’s consolidated Income Tax Ordinance 2001 (amended up to 30 June 2026). Provided for general information only — not an official FBR publication and not legal or tax advice. Always verify against the official FBR text before relying on it for filing or any decision.