Section 236C: advance tax when you sell property
Section 236C is collected from the seller when immovable property is sold or transferred, on the gross consideration received. It is straightforward arithmetic that becomes expensive in two situations: when the seller is not on the Active Taxpayer List, and when the seller assumes it is the only tax on the sale.
Tax Year 2027 rates
| Seller status | Rate | Base |
|---|---|---|
| Active taxpayer | 2.75% | Gross consideration received |
| Inactive taxpayer | 11.5% | Gross consideration received |
The Finance Act 2026 reduced the active rate from 3% to 2.75%. As with section 236K on the buyer side, the inactive rate was left in place, so the gap is now 8.75 percentage points.
| Sale consideration | Active seller | Inactive seller | Difference |
|---|---|---|---|
| Rs 8,000,000 | Rs 220,000 | Rs 920,000 | Rs 700,000 |
| Rs 20,000,000 | Rs 550,000 | Rs 2,300,000 | Rs 1,750,000 |
| Rs 45,000,000 | Rs 1,237,500 | Rs 5,175,000 | Rs 3,937,500 |
The two taxes on one sale
A property sale generates two separate income tax events, and sellers who plan for one are surprised by the other.
| Section 236C | Capital gains tax | |
|---|---|---|
| When | At transfer | In the annual return |
| Base | Gross consideration | Consideration less cost of the asset |
| Applies if you sold at a loss | Yes | No gain, so no gain tax |
| Collected by | The registering or attesting authority | Paid by you on filing |
Where the section 236C collection is adjustable, it can be set against the liability arising on the gain. Where it is minimum or final under the statutory conditions, it cannot. Establish which applies before you model the net proceeds — the capital gains guide sets out the acquisition-date test that drives it.
You bought or sold property this year, tax was deducted at the time of registration, and nobody explained whether you get it back.
When the collection actually happens
Section 236C is collected at the point the transfer is registered, recorded or attested — not when you agree the sale, and not when you receive the money. That gap matters in three common situations:
- Instalment sales. You may receive consideration over months while the collection crystallises at a single transfer date, so plan the cash for that date specifically.
- Delayed registration. Where possession passes but registration lags, the applicable rates and your Active Taxpayer List position are tested at registration. A status that was fine when you shook hands may not be fine when the deed is executed.
- Year-end transfers. A transfer registered on 28 June and one registered on 3 July fall into different tax years, which changes the return the credit lands in and, potentially, the rates that apply.
Non-resident sellers face an additional layer: residence affects the computation of the gain and, in some cases, the availability of treaty relief, while the section 236C collection itself still operates at transfer. Overseas Pakistani property tax deals with that combination.
What to settle before the transfer is registered
- Your ATL position on the transfer date. This is worth more than any negotiation on price at the margin — on a Rs 20 million sale it is Rs 1,750,000.
- The acquisition file. Original purchase deed, payment evidence, the date of acquisition, and any documented improvement cost. Without these, the cost side of the gain computation is unsupported and you may end up taxed on consideration rather than gain.
- Whose name is on the challan. It must be yours for the credit to be usable.
- How the proceeds will be received and declared. A large inflow that does not appear in the wealth statement is a visible inconsistency.
After the sale
- Retain the challan, sale deed, buyer details and the valuation basis with the tax-year file.
- Report the disposal in the return, with the gain computed and the section 236C credit claimed if adjustable.
- Remove the property from the closing wealth statement and show the proceeds — as cash, a new asset, or a repayment. The bridge from opening to closing net worth has to absorb the disposal cleanly.
- If the proceeds funded another purchase, expect both transactions to be looked at together.
If your sale involves inherited property, an overseas seller, or a plot acquired before July 2024, the interaction between section 236C and the gain computation is where the real money sits. Send us the acquisition date and the sale value before the transfer is registered.
Sources
This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.
- Withholding Tax Rate Cards (FBR)
- Tax Year 2027 withholding rate summary (KPMG Pakistan)
- Finance Act 2026 (FBR)
- Active Taxpayer List — Income Tax (FBR)
Questions people also ask
If I sell at a loss, do I still pay section 236C?
Yes. The collection is computed on gross consideration received, not on profit, so it applies whether or not the sale produced a gain. Whether you can recover it depends on the character of the collection and on your overall position for the year, which is settled in the return rather than at the transfer counter.
Is section 236C the same as capital gains tax on property?
No, and treating them as one is the most expensive error sellers make. Section 236C is a percentage of the sale consideration collected at transfer. Capital gains tax is computed on consideration less cost, at a rate that depends on when the property was acquired and your status. Both can apply to the same sale.
I am an overseas Pakistani selling inherited property. What applies?
Non-residence does not remove Pakistan-source obligations on Pakistani immovable property, and your Active Taxpayer List position still drives the rate. Inherited property also raises a separate question about cost basis for the gain computation. This combination is fact-specific enough that it should be reviewed before the transfer is registered, not after.
Can I deduct the agent commission and transfer costs from the 236C base?
No. The collection is on gross consideration. Selling costs may be relevant to the capital gains computation depending on their nature and evidence, but they do not reduce the amount collected at transfer.
The buyer offered to pay my 236C. Does that change anything?
Commercially you can agree who funds it, but the collection remains attributable to you as seller and the challan should reflect your registration. If it is deposited against the buyer instead, you lose the ability to claim the credit and the buyer gains a credit they are not entitled to.
Send the tax year and the transaction or filing involved, and we will tell you what is actually required.
Talk to Chartered Advisory Open the tax calculators