Section 7E was introduced through Finance Act,2022 whereby every resident person is treated to drive, as income, an amount equal to 5% of the fair market value of capital assets situated in Pakistan. Certain capital assets
themselves or capital assets up to a monetary limit of Rs. 25(m) are excluded from the purview oftax chargeable under sub-section (2) of this section.
A new proviso has been added under section (2) whereby benefit of following capital assets exclusions mentioned at clauses (a), (e), (f) and (g) of sub-section (2) of section 7E of the Ordinance has been restricted to ATL persons only.
(a) one capital asset owned by the resident person;
(e) any property from which income is chargeable to tax under the Ordinance and tax leviable is paid thereon;
(f) capital asset in the first tax year of acquisition where tax under section 236K has been paid;
(g) where the fair market value of the capital assets in aggregate excluding the capital assets mentioned in clauses (a), (b), (c), (d), (e) and (f) does not exceed Rupees twenty-five million;
However, this newly introduced proviso to sub-section (2) of section 7E will not apply on persons covered under rule (2) of Tenth Schedule to the Ordinance who are not required to file an income tax return under section 114 of the Ordinance