Property Sale Advance Tax (236C) Cut to 2.75% in Budget 2026-27
Selling property just got cheaper
The Federal Budget 2026-27 has reduced the advance tax that sellers pay when they transfer property. Under section 236C of the Income Tax Ordinance 2001, the rate for filers has been cut to a flat 2.75%, down from the earlier slabbed range of 4.5% to 5.5%. This is a meaningful reduction for anyone disposing of a plot, house or commercial unit.
What 236C does
Section 236C is collected from the seller at the time the property is transferred. Like other advance taxes, it is deposited with the FBR and adjusted against your annual tax liability. It is the seller's counterpart to the buyer's 236K charge.
Old versus new
| Position | Old rate (filer) | New rate (filer) |
|---|---|---|
| Property sale (236C) | 4.5% – 5.5% (value-based) | Flat 2.75% |
Earlier, larger transactions attracted the higher end of the slab. The single flat rate now simplifies planning and significantly lowers the cash that leaves the seller's hands at transfer.
A worked example
Consider a filer selling a property for a declared value of Rs 40,000,000.
- Under the old top slab of 5.5%, advance tax would have been Rs 2,200,000.
- Under the new flat 2.75%, advance tax is Rs 1,100,000.
- Upfront saving: Rs 1,100,000 — exactly half.
Because 236C is adjustable, the headline figure is not necessarily your final cost; it is reconciled when you file. But the cash-flow relief at the point of sale is immediate.
Filers win, non-filers do not
The 2.75% rate is the filer rate. Non-filers face enhanced rates under the Tenth Schedule, so being on the Active Taxpayers List is again the cheaper route. If you are planning to sell, confirm your filer status well before the transfer date.
Don't forget the gain
Advance tax on the transaction is separate from any capital gains tax on the profit you make. Keep records of your acquisition cost and improvement spending so your gain — and the advance tax credit — are computed correctly in your return.
How Zaffre supports clean reconciliation
For business owners and employers, a property sale interacts with the rest of your tax picture. Zaffre Axon from Zaffre Tech keeps payroll, withholding and finance records aligned with current FBR rates, so when you adjust an advance tax such as 236C against your liability, the supporting income figures are consistent. The Zaffre HRM module auto-applies salary slabs, allowance taxability, EOBI and withholding across payroll, invoices and finance — all configured centrally on Zaffreaxon so your filing position holds together.
References: Finance Act 2026 (Federal Budget 2026-27); Income Tax Ordinance 2001, section 236C; FBR Active Taxpayers List and Tenth Schedule.
Book a demo
See how Zaffretech keeps your finance and payroll compliant under the new rules. Book a demo with Zaffre Tech today.