Islamabad Capital Territory

Islamabad | ReNews Pakistan
The government has prepared a comprehensive special package to revive the real estate sector and boost investment, which is expected to be launched next month. According to sources, the package aims to attract overseas Pakistanis and foreign investors to invest in Pakistan, particularly in light of the current regional situation. Under the proposed package, significant incentives are planned for overseas Pakistanis, including the waiver of Federal Excise Duty on property purchases and tax concessions. Additionally, further relief will be provided to tax filers, while non-filers will face stricter measures.
To support the housing sector, the government has also proposed introducing a fixed 5% markup on home financing up to PKR 10 million, which is expected to make homeownership more accessible for the middle class.
The package also emphasizes introducing modern financial systems, including escrow accounts, to ensure secure and transparent transactions between buyers and sellers. Under this system, payments will only be released once both parties have fulfilled their obligations. Furthermore, a Gulf-style regulatory model for the real estate market is under consideration, which would require registration of developers and agents, ensure timely project completion, and protect buyers’ rights.
Sources indicate that the government is also considering establishing Special Investment Zones and Real Estate Investment Trusts to encourage investment in dollars. The proposals have been submitted to the relevant authorities for final approval, and it is likely that additional measures for the sector will also be introduced in the upcoming budget.

Islamabad | ReNews Pakistan
The Islamabad High Court (IHC) has ruled that profits earned from the sale of immovable property must be taxed under capital gains provisions of the Income Tax Ordinance, 2001, and not as business income.
In a detailed judgement, the court held that Section 37(1A), which specifically deals with taxation of capital gains on immovable property, takes precedence over the general provisions governing business income under Section 18. The court observed that even if a taxpayer is involved in property-related activities, the specific legal provision would still apply for taxing such gains.
The ruling was issued in a reference application challenging a decision of the Appellate Tribunal Inland Revenue (ATIR), which had earlier classified the proceeds from property sales as business income, endorsing the tax authorities’ stance. The case involved an individual taxpayer who had declared capital gains of Rs20.18 million for the tax year 2015. However, following an audit, tax authorities reclassified the amount as business income and issued notices accordingly.
During the hearing, the taxpayer contended that he was not engaged in the business of buying and selling property. He argued that his declared business income stemmed from agricultural activities, including the sale of crops, trees, and livestock on his land. The high court noted that Section 37(1A) is a special provision exclusively governing gains from the disposal of immovable property and, therefore, overrides general provisions related to business income. It further clarified that the applicability of this section does not depend on whether the transaction is part of a business activity. The judgement also stated that amendments introduced through the Finance Act, 2021, regarding taxation of cooperative societies in property transactions were not applicable in this case, as the taxpayer was an individual.
Setting aside the tribunal’s decision, the IHC concluded that the lower forums had misapplied the law and reaffirmed that gains from the sale of immovable property must be taxed strictly under Section 37(1A) of the Income Tax Ordinance, 2001.

Islamabad | ReNews Pakistan
The Capital Development Authority (CDA) has unveiled a comprehensive plan to improve Islamabad’s water supply system, focusing on groundwater recharge, rainwater storage, infrastructure upgrades and stricter regulatory enforcement.
The plan was reviewed during a meeting at CDA Headquarters chaired by CDA Chairman and Chief Commissioner Islamabad Muhammad Ali Randhawa, where officials assessed ongoing initiatives and outlined timelines for key projects. As part of the strategy, the authority will construct around 100 rainwater recharge wells across the city to help replenish groundwater levels and reduce rainwater wastage. In addition, approximately 20 water storage tanks will be developed in different sectors to enhance rainwater storage capacity. Officials informed the meeting that rehabilitation and upgradation work on waterworks, transmission pipelines, treatment plants and pumping systems is already in progress. Efforts are also underway to modernize the monitoring of water supply through the installation of a Supervisory Control and Data Acquisition (SCADA) system and flow meters.
CDA officials noted that rooftop rainwater harvesting is already mandatory under existing building bylaws, and the chairman directed authorities to ensure strict compliance across the capital The meeting also reviewed measures to improve water tanker services and complaint redressal. A dashboard-based monitoring system has been introduced to streamline tanker operations and respond more effectively to public complaints.
On the supply side, progress on dam projects was discussed. The feasibility study for Shahdra Dam has been completed, with the design phase nearing finalisation, while the feasibility study for Dotara Dam is expected to conclude by May 2026.
In parallel, the CDA is moving ahead with plans to establish three sewage treatment plants along Korang Nullah. The project will be executed on an engineering, procurement and construction (EPC) basis, with the process of hiring a design consultant currently in progress. Environmental initiatives were also highlighted, including the approval of PC-I for 11 wetlands in Islamabad. Site selection is ongoing, while work on two wetlands has already begun in collaboration with the relevant development partners.
Randhawa directed all departments to set clear timelines and ensure timely completion of water-related projects. He also instructed officials to improve the efficiency of water billing and ensure monthly delivery of bills to consumers without delays.
The CDA chairman said an autonomous Islamabad Water Agency has been established to address long-term water challenges and modernize the capital’s water management system. He added that the ongoing measures are aimed at improving efficiency, transparency and service delivery in Islamabad’s water supply network.