Can I adjust the 236K or 236C tax against my income tax, or is it a final tax?

The tax taken from a buyer under section 236K and from a seller under section 236C is, in the ordinary case, a payment in advance of your income tax. You claim it back as a credit in your return for the tax year of the transfer. The Income Tax Ordinance, 2001, as amended to 30 June 2026, carves out two situations where it works differently. This applies to transfers in tax year 2027 (1 July 2026 to 30 June 2027) and later.

What does the law say?

Section 236K (buyer). Sub-section (2) says “The advance tax collected under sub-section (1) shall be adjustable”. Its proviso then says that if the buyer is a non-resident individual holding a Pakistan Origin Card, NICOP or CNIC who acquired the property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) with an authorised bank, the tax collected “shall be final discharge of tax liability for such buyer or transferee”.

Section 236C (seller). Sub-section (2) also makes the tax adjustable, with a proviso: where the property “is acquired and disposed of within the same tax year, the tax collected under this section shall be minimum tax”. A separate proviso to sub-section (1) says that for a non-resident seller holding a POC, NICOP or CNIC who acquired the property through an FCVA or NRVA, the tax collected is “final discharge of tax liability in lieu of capital gains taxable under section 37”.

Section 168 (how the credit works). Section 168(1)(b) treats tax collected under Chapter XII, where sections 236C and 236K sit, as “tax paid by the person from whom the tax was collected”. Section 168(2) then says the person “shall be allowed a tax credit for that tax in computing the tax due by the person on the taxable income of the person for the tax year in which the tax was collected”. Section 168(3) lists final taxes for which no credit is allowed. Neither section 236C nor section 236K is on that list.

How does it work in practice?

Situation	236K (buyer)	236C (seller)
Ordinary resident transfer	Adjustable	Adjustable
Property bought and sold in the same tax year	Adjustable	Minimum tax
Non-resident buyer or seller who paid through FCVA or NRVA	Final discharge of the buyer’s tax liability	Final discharge in lieu of capital gains under section 37

The credit is for the tax year in which the tax was collected, which is the year of the registration or attestation, not the year you signed a sale agreement.

Worked example (illustrative figures)

Case 1: ordinary sale, 236C adjusted against capital gains tax. Zainab, on the active taxpayers’ list, bought a plot in Bahria Town, Rawalpindi in August 2024 for Rs. 10,000,000. She sells it in September 2026 for Rs. 14,000,000.

1. 236C collected at transfer: Rs. 14,000,000 x 2.75% = Rs. 385,000.
2. Capital gain: Rs. 14,000,000 - Rs. 10,000,000 = Rs. 4,000,000.
3. Capital gains tax under Division VIII for property acquired on or after 1 July 2024, for a person on the list: Rs. 4,000,000 x 15% = Rs. 600,000.
4. Credit under section 168: Rs. 385,000.
5. Balance payable with her tax year 2027 return: Rs. 600,000 - Rs. 385,000 = Rs. 215,000.

Case 2: bought and sold in the same tax year. Kamran buys a flat in August 2026 for Rs. 10,000,000 and sells it in March 2027, still within tax year 2027, for Rs. 11,000,000.

1. 236C collected: Rs. 11,000,000 x 2.75% = Rs. 302,500.
2. Capital gain: Rs. 1,000,000. Tax at 15%: Rs. 150,000.
3. The proviso to section 236C(2) calls the Rs. 302,500 minimum tax. On a plain reading, the tax on this disposal does not fall to Rs. 150,000 and the Rs. 152,500 difference is not an ordinary excess credit. Section 236C says nothing more about the computation, so the precise treatment of the difference is not settled by this section alone.

What if I am the buyer?

The 236K tax is credited against your total tax liability for the year, not only against tax on property. If Ayesha paid Rs. 175,000 under section 236K in tax year 2027 and her tax due on her business income for that year is Rs. 400,000, section 168(2) reduces what she still owes to Rs. 225,000. To get that credit, the tax has to be claimed in the return for the year it was collected.

Common mistakes

• Treating 236C as the full capital gains tax. For resident sellers it is a credit. The capital gain is charged separately under section 37(1A) at the Division VIII rates, and the credit is set against that.
• Assuming overseas status alone makes the tax final. The final-discharge provisos need all their conditions: non-resident individual, POC, NICOP or CNIC, and acquisition through an FCVA or NRVA.
• Claiming the credit in the wrong year. Section 168(2) ties the credit to the tax year in which the tax was collected.

What to check in the official text

Read sections 236C, 236K, 168 and 37, and Division VIII of Part I of the First Schedule. Where tax was collected at the higher rate for persons not on the active taxpayers’ list, rule 4(3) of the Tenth Schedule also bears on adjustment. The credit under section 168 is for tax collected from the person claiming it, so the collection record needs to be in that person’s name.