Does 236K tax apply when I buy a plot in a government housing scheme for overseas Pakistanis?

Section 236K of the Income Tax Ordinance, 2001 collects advance tax from every buyer of immovable property, with one exclusion written for overseas Pakistanis. Sub-section (4) takes government and statutory authority schemes for expatriates out of the section entirely, on a payment condition. This page reads the Ordinance as amended to 30 June 2026, which governs purchases in tax year 2027 (1 July 2026 to 30 June 2027).

What does the law say?

Section 236K(4) reads: “Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis”.

A proviso, added by the Finance Act, 2015, follows: “Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”

Because the sub-section says “nothing contained in this section” applies, it switches off all of section 236K for the scheme, including collection at registration under sub-section (1) and collection with instalments under sub-section (3).

What has to be true for the exclusion to apply?

Test in section 236K(4)	What the words require
Who introduced the scheme	The Federal Government, a Provincial Government, or an authority established under a Federal or Provincial law
Who the scheme is for	Expatriate Pakistanis
How the expatriate pays	Foreign exchange remitted from outside Pakistan through normal banking channels

The Ordinance does not define “expatriate Pakistanis” in this sub-section, and it does not list which schemes qualify. Whether a particular scheme was introduced by a qualifying body for expatriates is a question of fact about that scheme.

Does it cover private housing schemes?

The text names only governments and authorities established under Federal or Provincial law. It says nothing about private developers. The Explanation to section 236K(1) goes the other way for private projects: it says the person responsible for registering, recording or attesting a transfer includes the person doing so for housing societies, co-operative societies, public and private real estate projects registered or governed under any law, joint ventures and private commercial concerns. So a private society’s “overseas block” is inside section 236K on the words of the section, unless some other provision excludes it.

Worked example (illustrative figures)

Asad works in Doha. He books a 1 kanal plot worth Rs. 18,000,000 in two different schemes.

Scheme A: launched by an authority set up under a Provincial law, for expatriate Pakistanis. Asad pays every instalment by bank transfer from Qatar.

1. Introduced by an authority established under a Provincial law: yes.
2. For expatriate Pakistanis: yes.
3. Paid in foreign exchange remitted through normal banking channels: yes.
4. Section 236K tax: nil, because section 236K(4) says nothing in the section applies.

Scheme B: the overseas block of a private housing society in Lahore.

1. Section 236K(4) does not name private schemes.
2. Division XVIII of Part IV of the First Schedule sets the rate at 1.25% of fair market value for tax year 2027.
3. Tax collected: Rs. 18,000,000 x 1.25% = Rs. 225,000, assuming Rs. 18,000,000 is the fair market value.

What if part of the payment was made from Pakistan?

The proviso says the mode of payment “shall be in the foreign exchange remitted from outside Pakistan through normal banking channels”. It does not say what happens where only some instalments meet that condition. This page does not resolve that point.

What about the tax when the plot is later sold?

Section 236K(4) concerns the buyer’s advance tax under section 236K. It says nothing about section 236C, which is collected from a seller, or about capital gains tax on a later sale. Those are separate provisions.

Common mistakes

• Treating every “overseas” scheme as exempt. The exclusion depends on who introduced the scheme, not on its marketing name.
• Paying from rupee savings in Pakistan. The proviso requires foreign exchange remitted from outside Pakistan through normal banking channels.
• Assuming the exclusion follows the plot on resale. The sub-section applies to the scheme and the expatriate’s payment in it; it does not speak to later transfers.

What to check in the official text

Read section 236K(1) with its Explanation, section 236K(3) and (4) with the proviso, and Division XVIII of Part IV of the First Schedule in the official PDF. The law establishing the authority behind a particular scheme, and the scheme’s own terms, are outside this corpus. Provincial stamp duty and registration fees are provincial levies and are not covered here.