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Tax on builders
(1) Subject to this Ordinance, a tax shall be imposed on the profits and gains of a person deriving income from the business of construction and sale of residential, commercial or other buildings at the rates specified in Division VIIIA of Part I of the First Schedule.
(2) The tax imposed under sub-section (1) shall be computed by applying the relevant rate of tax to the area of the residential, commercial or other building being constructed for sale.
(3) The Board may prescribe:
(a) the mode and manner for payment and collection of tax under this section;
(b) the authorities granting approval for computation and payment plan of tax; and (c) responsibilities and powers of the authorities approving, suspending and cancelling no objection certificate to sell and the matters connected and ancillary thereto.
(4) This section shall apply to projects undertaken for construction and sale of residential and commercial buildings initiated and approved.─
(a) during tax year 2017 only;
(b) for which payment under rule 13S of the Income Tax Rules, 2002 has been made by the developer during tax year 2017; and (c) the Chief Commissioner has issued online schedule of advance tax installments to be paid by the developer in accordance with rule 13U of the Income Tax Rules, 2002.
(2) The tax imposed under sub-section (1) shall be computed by applying the relevant rate of tax to the area of the residential, commercial or other building being constructed for sale.
(3) The Board may prescribe:
(a) the mode and manner for payment and collection of tax under this section;
(b) the authorities granting approval for computation and payment plan of tax; and (c) responsibilities and powers of the authorities approving, suspending and cancelling no objection certificate to sell and the matters connected and ancillary thereto.
(4) This section shall apply to projects undertaken for construction and sale of residential and commercial buildings initiated and approved.─
(a) during tax year 2017 only;
(b) for which payment under rule 13S of the Income Tax Rules, 2002 has been made by the developer during tax year 2017; and (c) the Chief Commissioner has issued online schedule of advance tax installments to be paid by the developer in accordance with rule 13U of the Income Tax Rules, 2002.
Amendment history (6)
- Inserted by the Finance Act, 2015
- Sub clause 3 of 7B substituted by Finance Act, 2019, substituted clause read as follow
- The words “thirty six” substituted by the Finance Act, 2021.
- Inserted by the Finance Act, 2016.
- Section 4 substituted by the Finance Act, 2017. The substituted section
- Section 7E inserted by the Finance Act, 2022.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 41
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.