# Is property tax charged on the price in my sale deed or on the FBR valuation table?

Source: https://qanoondigest.com/faq/property-owners/fbr-valuation-table-vs-sale-price
Law current to: 30 June 2026. Reviewed: 2026-09-25. Checked line by line against the law: not yet.

> This is not legal or tax advice. Qanoon Digest is an independent publication and is not affiliated with, endorsed by, or connected to the Federal Board of Revenue or the Government of Pakistan. Content is a plain-language summary of publicly available FBR documents and may be out of date or incomplete. Always verify against the official document before acting, and consult a qualified professional for your situation.

## Short answer

Where the sale deed shows less than the official value, the official value applies. Section 68(6) says the value used for capital gain, 236C, 236K and section 111 cannot be lower than the fair market value notified by FBR under section 68(4), or the stamp duty value under section 68(5) where FBR has notified none.

**Applies to:** Buyers and sellers of plots, houses, flats and commercial property in Pakistan whose agreed or deed price is different from the FBR valuation.

For income tax purposes, the price written in your sale deed is only a floor if it is higher than the official value. If it is lower, the Income Tax Ordinance, 2001 replaces it with the official figure. This page explains how section 68 sets that figure and where it is used. Rates quoted are those in force for tax year 2027 (1 July 2026 to 30 June 2027).

## What does the law say?

Section 68 defines "fair market value". For most assets, section 68(1) says it is the price the asset "would ordinarily fetch on sale or supply in the open market" at the time. Immovable property has its own rules:

- **Section 68(4):** the Board (FBR) may, by notification in the official Gazette, determine the fair market value of immovable property in the areas it specifies. These notifications are what people call the FBR valuation table.
- **Section 68(5):** where FBR has not notified a value for an area, the fair market value is deemed to be the value fixed for stamp duty by the District Officer (Revenue) or another authorised provincial authority.
- **Section 68(6):** for immovable property, four values "shall not be less than" the fair market value under sub-section (4) or (5):
  1. component A (the sale consideration) in the capital gain formula in section 37(2);
  2. the "consideration received" on which 236C advance tax is charged under Division X;
  3. the "value of immovable property" for Division XVIII, the 236K rate;
  4. valuation for section 111, which deals with unexplained income or assets.

Two Explanations follow. The first says the section 68(4) or (5) value is for the purposes of this Ordinance only. The second says that if that value differs from an auction price, "the applicable price shall be the higher of the two."

## How does it work in practice?

The registrar, society or other authority that records the transfer collects 236C from the seller and 236K from the buyer. For tax year 2027, the First Schedule, Part IV sets:

| Tax | Collected from | Rate (tax year 2027) | Base |
|---|---|---|---|
| Section 236C | Seller | 2.75% | Gross amount of the consideration received |
| Section 236K | Buyer | 1.25% | Fair market value of the immovable property |

Because of section 68(6), a deed that understates the price does not reduce either base below the notified value. The same floor applies later when the seller works out the capital gain for the return, and when the Commissioner values an investment under section 111. These rates are for persons on the active taxpayers' list. Higher rates for others are covered on the non-filer rate page.

## Worked example (illustrative figures)

Ayesha sells a plot in Lahore to Bilal. The deed shows Rs. 18,000,000. The FBR notified value for that plot is Rs. 25,000,000. Ayesha bought it for Rs. 15,000,000. Both are on the active taxpayers' list.

**236C on Ayesha (seller)**
- Base cannot be less than Rs. 25,000,000
- Rs. 25,000,000 x 2.75% = **Rs. 687,500**
- (On the deed price it would have been Rs. 18,000,000 x 2.75% = Rs. 495,000)

**236K on Bilal (buyer)**
- Base cannot be less than Rs. 25,000,000
- Rs. 25,000,000 x 1.25% = **Rs. 312,500**

**Capital gain for Ayesha's return**
- Component A cannot be less than Rs. 25,000,000
- Gain = A - B = Rs. 25,000,000 - Rs. 15,000,000 = **Rs. 10,000,000**
- On the deed price, the gain would have looked like Rs. 3,000,000.

The capital gain is then taxed at the rates in Division VIII of Part I of the First Schedule, which depend on when the property was acquired. See the capital gains pages linked below.

## What if the property was bought at auction?

The second Explanation to section 68(6) applies. If a plot sold at auction for Rs. 27,000,000 has an FBR value of Rs. 25,000,000, the higher figure, Rs. 27,000,000, is used. 236K would then be Rs. 27,000,000 x 1.25% = Rs. 337,500, and 236C would be Rs. 27,000,000 x 2.75% = Rs. 742,500.

## What if the deed price is higher than the FBR value?

Section 68(6) only sets a minimum. For 236C, Division X uses the "gross amount of the consideration received", so a real price above the FBR value is the base. For 236K, the current wording of Division XVIII uses "fair market value", and section 68(4) says the notified value applies "notwithstanding" sub-section (1). The text does not expressly say whether a higher agreed price replaces the notified value for 236K. That point is not settled by the wording alone.

## Common mistakes

- **"Tax follows the deed."** Not when the deed is lower. Section 68(6) overrides it for the four listed purposes.
- **"The DC rate always applies."** The stamp duty value under section 68(5) is only the fallback where FBR has not notified a value for the area.
- **"A low FBR value lowers my stamp duty too."** The first Explanation limits the section 68 value to the Income Tax Ordinance.
- **Forgetting section 111.** If the price actually paid is above what was declared, section 111 deals separately with unexplained investments. Section 68(6)(iv) sets the floor for that valuation too.

## What to check in the official text

Read section 68(4) to (6) with both Explanations, and Divisions X and XVIII of Part IV of the First Schedule in the consolidated Ordinance amended to 30 June 2026. The FBR valuation notifications for each city are separate SROs that this site does not hold. Check the notification in force for your area and the date of transfer. Provincial stamp duty valuation tables are also outside this corpus.

## Frequently asked

### If my deed shows Rs. 18 million and the FBR value is Rs. 25 million, which figure is used for 236K?

The FBR value. Section 68(6) says the value used for Division XVIII, which sets the 236K rate, cannot be less than the fair market value notified under section 68(4). So 236K is worked out on at least Rs. 25 million.

### What if FBR has not notified a value for my area?

Section 68(5) then deems the fair market value to be the value fixed for stamp duty by the District Officer (Revenue) or another provincial authority. That figure becomes the minimum for capital gain, 236C, 236K and section 111.

### Does the FBR value also decide stamp duty or provincial taxes?

No. The Explanation to section 68(6) says the value determined under sub-sections (4) or (5) is for the purposes of the Income Tax Ordinance only. Stamp duty and provincial property taxes are set under provincial law, which this site does not cover.

## Citations

- [Income Tax Ordinance, 2001, section 68 (Fair market value)](https://qanoondigest.com/ordinances/income-tax-ordinance-2001/income-tax-ordinance-2001-2026-06-30#68-fair-market-value), as amended to 2026-06-30: "the fair market value of such immovable property shall be deemed to be the value fixed by the District Officer (Revenue) or provincial or any other authority authorized in this behalf for the purposes of stamp duty." Official source: https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf
- [Income Tax Ordinance, 2001, section 236C (Advance Tax on sale or transfer of immovable Property)](https://qanoondigest.com/ordinances/income-tax-ordinance-2001/income-tax-ordinance-2001-2026-06-30#236c-advance-tax-on-sale-or-transfer-of-immovable-property), as amended to 2026-06-30: "shall collect from the seller or transferor advance tax at the rate specified in Division X of Part IV of the First Schedule" Official source: https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf
- [Income Tax Ordinance, 2001, section 236K (Advance tax on purchase or transfer of immovable property)](https://qanoondigest.com/ordinances/income-tax-ordinance-2001/income-tax-ordinance-2001-2026-06-30#236k-advance-tax-on-purchase-or-transfer-of-immovable-property), as amended to 2026-06-30: "shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule." Official source: https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf
- [Income Tax Ordinance, 2001, section 37 (Capital gains)](https://qanoondigest.com/ordinances/income-tax-ordinance-2001/income-tax-ordinance-2001-2026-06-30#37-capital-gains), as amended to 2026-06-30: "A is the consideration received by the person on disposal of the asset; and B is the cost of the asset." Official source: https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf
- [Income Tax Ordinance, 2001, section 111 (Unexplained income or assets)](https://qanoondigest.com/ordinances/income-tax-ordinance-2001/income-tax-ordinance-2001-2026-06-30#111-unexplained-income-or-assets), as amended to 2026-06-30: "and the person offers no explanation about the nature and source of the amount credited or the investment, money, valuable article, or funds from which the expenditure was made" Official source: https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf
- [Income Tax Ordinance, 2001, First Schedule, Part IV, Division X (Advance tax on sale or transfer of immovable property) and Division XVIII (Advance tax on purchase of immovable property), as substituted by the Finance Act, 2026](https://qanoondigest.com/ordinances/income-tax-ordinance-2001/income-tax-ordinance-2001-2026-06-30), as amended to 2026-06-30 Official source: https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf