The Federal Constitutional Court (FCC) issued a short order on May 7, 2026, declaring Section 7E of the Income Tax Ordinance, 2001, unconstitutional and void from the beginning. Section 7E, introduced through the Finance Act 2022, imposed a tax on immovable properties that do not generate income, allowing tax authorities to assess tax based on hypothetical earnings. According to brecorder.com, the FCC ruled that Section 7E falls outside the legislative competence of the Federal Legislature and restrained respondents from giving effect to Section 7E in any manner whatsoever. According to brecorder.com, any proceedings, actions, assessments, demands, or notices initiated or taken pursuant to Section 7E shall stand annulled. Humenglish.com reported that the FCC ruled Parliament cannot levy taxes on immovable property or construct taxes based on hypothetical earnings, and that the validity of a tax does not depend on a direct benefit returning to the taxpayer. Humenglish.com also reported that the FCC ruled the role of the court is strictly to evaluate the constitutional legitimacy of a tax levy, not its underlying objectives. Humenglish.com reported that the FCC issued a detailed 92-page judgment on Section 7E on June 17, 2026.