Property & Real Estate · Section 7E · Tax Year 2026-2027
Section 7E Deemed Income Tax Calculator
Work out the deemed income tax on immovable property — 5% of fair market value, taxed at 20%, an effective 1% of FMV — for the tax years in which it applied.
Withdrawn from tax year 2027. Section 7E was omitted by the Finance Act 2026, so no deemed-income tax on immovable property arises for tax year 2027 onward. This calculator is kept for earlier years (returns, amendments, pending assessments) and for reference.
Step by step
How Section 7E is worked out
Find the fair market value
The FBR valuation table rate for your area, where notified.
Check the self-occupied exemption
Your only self-owned, self-occupied property is generally exempt.
See the deemed income
5% of the fair market value.
See the tax due
20% of the deemed income — an effective 1% of FMV.
Reading the result
A tax on holding, not on earning
Section 7E does not tax rent or a gain. It treats a percentage of the property's fair market value as income you are deemed to have received, and taxes that — whether the property produced anything or not.
An empty plot generating no income can therefore carry a liability. That is the design, not an anomaly, and it is what makes the provision contentious.
Check the litigation position for your province
This provision has been challenged in the superior courts, with outcomes that have not been uniform, and its practical application has varied over time and between jurisdictions. Before paying or planning around it, establish where it currently stands for your circumstances — this is not a settled corner of the law.
Fair market value is the contested input
The whole charge scales with a valuation, and the figure used is not necessarily what you paid or what you believe the property is worth. Where the valuation is high the tax follows, which is why the valuation basis rather than the rate is usually what is actually in dispute.
Where this stops
This applies the deemed-income mechanism to a value you enter. Exclusions apply to certain categories of property and taxpayer, and whether yours falls within one is the question that decides whether the calculation is needed at all.
FAQs
Section 7E FAQs
What is Section 7E?
Section 7E is a deemed income tax on capital assets (immovable property) situated in Pakistan and owned by resident persons. It treats 5% of the property's fair market value as deemed income each tax year, taxed at a flat 20% under Division IIC — an effective 1% of fair market value.
Is my self-occupied house exempt?
Generally, yes — one self-owned property that you occupy yourself is commonly exempt. Several other exemption categories also exist (e.g. property whose rental income is already fully taxed, qualifying agricultural farmhouses, government/local-authority property, and more) — this calculator only models the self-occupied-house exemption, so confirm any other exemption that may apply to you with a tax advisor.
Where do I get the fair market value?
Use the FBR's notified valuation table for your property's area and category where one exists, or a professional valuation — not simply the original purchase price. This section has seen amendments and litigation since its introduction, so also confirm the current mechanics and rate for your specific tax year.
Is this tax paid separately from my normal income tax?
For the years it applied, yes — it was a separate deemed-income charge, computed and reported alongside the annual return, in addition to tax on actual income.
Does Section 7E still apply?
No. The Finance Act 2026 omitted Section 7E, so there is no deemed-income tax on immovable property from tax year 2027 onward. Liabilities for earlier tax years are unaffected, which is why this tool remains available — confirm the position for the year you are dealing with.
Related tools
Renting the property out instead?
Rental income has its own separate withholding tax.
Open Rental Income WHT Calculator