ISLAMABAD: Federal Board of Revenue (FBR) has updated rates of tax on capital gain on disposal of immovable properties that are applicable during tax year 2021 (July 01, 2020 – June 30, 2021).

The FBR issued Income Tax Ordinance, 2001 (updated June 30, 2020) after incorporating amendments brought through Finance Act, 2020. The FBR updated the following rate of tax on Capital Gains on disposal of Immovable Property.

The rate of tax to be paid under sub-section (1A) of section 37 shall be as follows:—

S.No.	Amount of Gain	Rate of tax
(1)	(2)	(3)
1.	Where the gain does not exceed Rs. 5 million	2.5%
2.	Where the gain exceeds Rs. 5 million but does not exceed Rs. 10 million	5%
3.	Where the gain exceeds Rs. 10 million but does not exceed Rs. 15 million	7.5%
4.	Where the gain exceeds Rs. 15 million	10%

The revised capital gains tax rates applied to gains arising from the disposal of immovable property during tax year 2021. Under the updated provisions, the applicable tax rate increased progressively with the amount of gain, ranging from 2.5 percent to 10 percent.

Taxpayers involved in property transactions were therefore required to determine their taxable gain carefully and apply the relevant rate according to the prescribed thresholds.