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What the relief does
Section 236C concerns advance tax collected on the sale or transfer of immovable property. FBR Circular No. 07 of 2025-26 said a person covered by Section 7F who had discharged the tax liability under that section, and had no other income chargeable to tax against which Section 236C collection could be adjusted, could seek an exemption from that collection. Read FBR Circular No. 07 of 2025-26.
The practical issue is that Section 7F applies a special regime to certain builders and developers, determining income as a fixed percentage of gross receipts. If a taxpayer has already settled liability under that regime and lacks other taxable income against which Section 236C advance tax can be credited, the collection may create a cash-flow burden. The circular addressed that situation; it did not cancel the underlying Section 7F liability or create a general property-tax holiday. See the FBR’s amended Income Tax Ordinance, 2001.
Who may apply under Circular 7
- The applicant is covered by Section 7F.
- The applicant has discharged the tax liability under Section 7F.
- The applicant has no other income chargeable to tax against which Section 236C collection could be adjusted.
Meeting these conditions made a taxpayer eligible to seek a certificate under Circular 7; it did not guarantee approval. The circular directed Commissioners to examine applications individually and decide them according to law.
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How the application was to work
- Apply to the concerned Commissioner Inland Revenue under Section 159 of the Ordinance.
- Request an exemption certificate authorizing non-collection of Section 236C advance tax on transactions involving sale of immovable property.
- Provide information and documents supporting Section 7F coverage, payment of the Section 7F liability, and the absence of other taxable income against which the collection could be adjusted. The circular sets out the conditions but does not prescribe a universal document checklist.
- Wait for the Commissioner’s case-specific decision. Do not treat the exemption as effective unless the certificate is granted and applies to the transaction.
Because Circular 8 is reported to have superseded Circular 7, verify the current application requirements and legal position before filing or completing a transaction. The FBR’s Circular 7 is the primary source for the procedure described above, but it cannot establish what changed in the later circular.
Do not confuse the certificate with broader property-tax changes
The Section 159 certificate described in Circular 7 was a taxpayer-specific route to non-collection under Section 236C. Separate FBR 2026-27 budget materials describe broader property measures, including proposed omission of Section 7E and changes to advance-tax rates under Sections 236C and 236K. They operate on a different basis and should not be read as substitutes for a Section 7F taxpayer’s exemption application.
| Measure | Who or what it concerns | Mechanism and status |
|---|---|---|
| Circular 7 Section 236C relief | Qualifying Section 7F taxpayers who satisfy the circular’s conditions | Application to the Commissioner under Section 159; case-by-case. Circular 7 is dated 31 March 2026, and a later Circular 8 is reported to have superseded it; confirm the current official text. |
| 2026-27 budget and Finance Bill measures | Broader rules concerning property transactions and tax | FBR’s Finance Bill 2026 specifies proposed rates of 2.75% under Section 236C and 1.25% under Section 236K. These are bill figures, not confirmed here as operative rates; check enactment, commencement, taxpayer status bands, and the current rate card. |
FBR’s 2026-27 Budget Salient Features summarizes the budget measures, while the Finance Bill 2026 contains the proposed rates. Neither document, as described here, establishes final enactment or effective dates.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How this differs from the 2020 construction package
The 2020 construction package was a separate historical scheme introduced through Section 100D and the Eleventh Schedule. FBR’s announcement described conditions including project registration by 31 December 2020 and completion by 30 September 2022. Those dates belong to that earlier package; they are not requirements for the Section 7F/236C certificate described in Circular 7. See FBR’s 2020 construction-package announcement.
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What to verify before acting
- Obtain Circular No. 8 of 2025-26 from an official FBR source and check whether it changed or replaced Circular 7’s eligibility conditions or filing process.
- Confirm that the taxpayer and transaction fall within the current provisions of the Ordinance and any applicable amendments.
- Ask the concerned Commissioner Inland Revenue what evidence and filing method are required for a Section 159 application.
- For a transaction relying on a certificate, check that it has been issued and covers the relevant sale or transfer.
- Verify any budgeted or Finance Bill rate against the enacted law and effective date before calculating tax due.
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