Written by Shahnawaz Akhter Islamabad, April 1, 2026 – The Federal Board of Revenue (FBR) on Wednesday announced significant relief measures regarding withholding tax for property builders and developers, aiming to ease liquidity pressures and streamline tax compliance in the construction sector. The tax authority issued Circular No. 07 of 2025-26, clarifying the applicability of withholding tax under Section 236C of the Income Tax Ordinance, 2001, particularly in relation to persons falling under the special tax regime of Section 7F. Under Section 7F, builders and developers are taxed under a simplified regime where income is determined as a fixed percentage of gross receipts. However, concerns were raised that withholding tax under Section 236C—normally adjustable against capital gains—was creating an additional financial burden for those already taxed under this regime. The FBR acknowledged these concerns and stated that in cases where builders and developers have already fulfilled their tax obligations under Section 7F and do not have any other taxable income, they may now apply for exemption from withholding tax under Section 236C. According to the circular, such taxpayers can seek an exemption certificate by applying to the relevant…