Overview
- The Federal Constitutional Court, which issued a short order Thursday, struck down Section 7E of the Income Tax Ordinance as void from the start.
- The court set aside every notice, assessment and proceeding the tax authority began under Section 7E, lifting immediate demands on affected property owners.
- A two-judge bench led by Chief Justice Amin-ud-Din Khan with Justice Ali Baqar Najafi delivered the order after reserving judgment on April 30.
- Section 7E treated most additional properties as if they earned rent and taxed 5% of 20% of the FBR-assessed value, an effective 1% yearly levy above a Rs25 million threshold with key exemptions.
- The ruling resolves conflicting high-court outcomes by allowing taxpayers’ appeals and dismissing FBR challenges, with detailed reasons to follow in a written judgment.