> For the complete documentation index, see [llms.txt](https://docs.taxaible.co/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.taxaible.co/features/tax-7e-wizard.md). # Tax 7E Wizard The **Tax 7E Wizard** is a specialized tool designed to help you navigate the complexities of "Tax on Deemed Income" under Section 7E of the Income Tax Ordinance. It ensures that your immovable property holdings are correctly declared and that you only pay the tax you legally owe. ### What is Section 7E? Introduced by the FBR, Section 7E treats a certain percentage of the value of your immovable properties (land and buildings) as "deemed income," even if you are not earning rent from them. This deemed income is then taxed at a specific rate. Effectively, this amounts to a **1% tax on the Fair Market Value (FMV)** of properties that exceed the threshold and do not qualify for exemptions. ### The 25 Million Threshold Section 7E only applies if the total aggregate Fair Market Value of all your immovable properties in Pakistan exceeds **PKR 25 Million (2.5 Crore)**. * If your total property holdings are below this amount, you are generally exempt. * If they exceed this amount, you must calculate the tax, taking into account specific exemptions. ### Key Exemptions The Wizard helps you identify properties that are excluded from this tax, such as: * **Primary Residence**: One self-owned residential property where you live. * **Government Allotted**: Property allotted to serving or retired government/armed forces employees. * **Agricultural Land**: Land used for actual agricultural activities (excluding farmhouses). * **First Year of Acquisition**: Properties acquired within the current tax year where tax under Section 236K has already been paid. ### Using the Wizard #### Step 1: Threshold Assessment The Wizard starts by asking if your total property value exceeds 25M PKR. This quickly determines if the rest of the steps are necessary for you. #### Step 2: Property Valuation You will be asked to provide two values for each of your properties: 1. **Cost**: The original purchase price. 2. **Fair Market Value (FMV)**: The current market rate as per FBR or DC tables. The system categorizes properties into Agriculture, Residential, Commercial, Industrial, and Open Plots to ensure correct mapping to FBR codes. #### Step 3: Applying Exemptions Select the exemption criteria that apply to your holdings. You will then enter the FMV of the specific properties that are exempt. The Wizard will subtract this from your total holdings to reach your **Net Taxable FMV**. #### Step 4: Calculation & Results The system performs the final calculation: * **Deemed Income**: Calculated as 5% of your Net Taxable FMV. * **Tax Payable**: Calculated as 20% of that Deemed Income (which equals 1% of the total value). ### Benefits * **Simplified Compliance**: No need to manually calculate complex tax formulas. * **Maximized Exemptions**: Ensures you take full advantage of legal exemptions for your primary residence and other categories. * **Direct Integration**: Once calculated, the data is automatically synced with your main tax return, ready for filing via the IRIS Connector. > \[!TIP] Make sure to have your property documents or latest valuation tables ready before starting the Wizard to ensure the most accurate calculation. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.taxaible.co/features/tax-7e-wizard.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.