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Pakistan·Trade & Economy·Democracy

Pakistan's Federal Constitutional Court strikes down 'confiscatory' tax on immovable properties

Wednesday, 17 June 2026, 06:35 · 1 min read

Pakistan's Federal Constitutional Court (FCC) has ruled that Section 7E of the Income Tax Ordinance 2001 — which taxed "deemed income" on assets and properties, including those generating no actual income — is unconstitutional and confiscatory in nature. Chief Justice Aminuddin Khan warned that the provision could force property owners to sell assets simply to meet tax obligations, and found it discriminatory because it granted exemptions to certain groups while subjecting similarly placed taxpayers to unequal treatment. The ruling, whose detailed reasoning was released as parliament debated a finance bill to implement an earlier FCC short order on the same provision, also found Section 7E violated citizens' constitutional right to acquire and hold property under Article 23 of Pakistan's constitution.

Sources
DawnFCC rules income tax on immovable properties ‘confiscatory in nature’ ↗︎
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