Karachi, August 3, 2023 – The Federal Board of Revenue (FBR) has announced the tax rates on immovable property rental income for the fiscal year 2023-24.
Under Section 155 of the Income Tax Ordinance, 2001, the FBR has issued updated tax rates for individuals, differentiating between those on the Active Taxpayers List (ATL) and those who are not.
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According to the notification, individuals on the Active Taxpayers List will face standard tax rates, while the tax rate for non-ATL persons will be subject to a 100 percent increase.
The newly announced tax rates on gross rent income are as follows:
1. For individuals whose gross amount of rent does not exceed Rs 300,000, the tax rate will be zero.
2. For those whose gross amount of rent exceeds Rs 300,000 but does not surpass Rs 600,000, the tax rate will be 5 percent of the gross amount exceeding Rs 300,000.
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3. For individuals whose gross amount of rent exceeds Rs 600,000 but does not exceed Rs 2,000,000, the tax rate will be Rs 15,000 plus 10 percent of the gross amount exceeding Rs 600,000.
4. For those whose gross amount of rent exceeds Rs 2,000,000, the tax rate will be Rs 155,000 plus 25 percent of the gross amount exceeding Rs 2,000,000.
This move by the FBR aims to encourage more people to become active taxpayers and comply with the tax regulations. The differentiation between ATL and non-ATL individuals is an effort to promote tax compliance and expand the tax base.
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The new tax rates on immovable property rental income will come into effect immediately and will apply for the fiscal year 2023-24. Individuals falling within these income brackets are urged to ensure proper filing of their tax returns to avoid penalties and stay compliant with the law.
Taxpayers are advised to consult tax professionals or visit the official FBR website for further information and to clarify any doubts regarding the new tax rates and their implications on their rental income.
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As the fiscal year progresses, the FBR will closely monitor the impact of these tax rates on tax collection and compliance in the country. The government aims to streamline the tax system and enhance revenue generation to support economic growth and development initiatives.
