In a significant move, the Federal Board of Revenue (FBR) has clarified that overseas Pakistanis who are not registered tax filers will now be treated as “filers” for the purpose of withholding tax on the purchase and sale of immovable properties in Pakistan. This means that non-filing overseas Pakistanis will pay the lower, filer-category tax rates on property transactions, rather than the higher rates typically imposed on non-filers.

According to the FBR’s latest FAQs, this concession applies to overseas Pakistanis who hold a Pakistan Origin Card (POC) or National Identity Card for Overseas Pakistanis (NICOP), and who are classified as non-residents, defined as individuals who spend less than 183 days in Pakistan during a financial year.

The advance income tax on property transactions, governed by sections 236C and 236K of the Income Tax Ordinance, varies based on the fair market value of the property and the filer status of the buyer or seller. With this new clarification, eligible overseas Pakistanis can now avail the filer rate, even if they have not filed tax returns.

How It Works

To benefit from this provision, the relevant authority, registrar, or housing society handling the property transaction must use the FBR’s web portal to create a Payment Slip Identity (PSID) under the “Overseas Pakistanis” category. The system will prompt for the individual’s POC or NICOP number, automatically retrieve their details, and allow for the upload of supporting documents to confirm non-resident status.

Once submitted, the PSID and documents are sent to the concerned Commissioner via the IRIS digital system for verification and approval. Upon approval, the overseas Pakistani will be notified by email and SMS, and will be able to pay the advance income tax at the filer rate, even if they are not registered as a filer.