FBR moves to refund tax collected on immovable properties

The Federal Board of Revenue has instructed its field offices to process refund requests linked to tax on immovable properties under Section 7E, after a court struck that provision down. A communication dated September 23, 2026, reached chief commissioners and stated that revision applications from filers could not be turned away. If a revised return produces a refund, the resulting claim is also to be handled without delay, as the law provides.

The directive followed over four months of letters from the Lahore Tax Bar Association's Public Interest Litigation Committee, which wanted a formal refund procedure in place. A May 7, 2026 order of the Federal Constitutional Court declared Section 7E void from the outset and cancelled notices issued under it. That section imposed a 5% deemed-income levy on property with a valuation exceeding Rs25 million, yet no application format or filing forum had been specified before this step.

The instructions cover only Section 7E and not other matters. The committee says the Section 4C issue on Super Tax is still open, since the ruling upheld that section but excluded some exempt gains, such as inherited property, and no refund mechanism has been notified for those collections. It has asked that amounts collected under both sections be adjusted against 2026 liabilities until a full mechanism exists, and that Super Tax refund claims receive the same quick handling.