The Federal Board of Revenue (FBR) has implemented some changes in the new 2023-24 budget that specifically targets the tax structure concerning transactions involving immovable properties. Here are the key changes:
Changes in Advance Tax paid on the sale or transfer of immovable property:
- The FBR has increased the withholding tax rate under section 236C (Seller) from 2% to 3% of the prevailing FBR Value for the property for filers of income tax returns.
- For non-filers of income tax returns, the withholding tax rate under section 236C (Seller) has been raised from 4% to 6% of the prevailing FBR Value for the property.
Changes in Advance Tax on the purchase or transfer of immovable property:
- For filers of income tax returns, the withholding tax rate under section 236K (Buyer) has been raised from 2% to 3% of the prevailing FBR Value for the property.
- For non-filers of income tax returns, the withholding tax rate under section 236K (Buyer) has been further increased from 7% to 10.5% of the prevailing FBR Value for the property.
Tax payment for immovable property sales or transfers under section 7E of the Income Tax Ordinance 2001:
- The year 2022 saw the incorporation of Section 7E into the Income Tax Ordinance 2001 by the Pakistani government. As per the provisions of this section, Situs resmi terjamin WD judi bola terbaik hari ini if a resident individual possesses immovable assets exceeding the value of Rs25 million, they are obligated to remit a tax of 20% on a sum equivalent to 5% of the property’s fair market value, subject to certain exemptions (essentially amounting to 1% of the fair market value of the immovable property). This tax regulation pertains to properties held during the tax year 2022 onwards.
- The Finance Act 2023, A new sub-section (2A) was introduced in section 236C, which prohibits the transfer of property unless the seller pays tax under section 7E and provides evidence to the transferring authority.
- Under section 236C of the Ordinance, It is the responsibility of the transferring authority responsible to collect advance adjustable income tax.
- FBR has issued the following Instructions in this regard:
- a) The seller/transferor can provide evidence of tax payment under Section 7E through the FBR online payment system using a separate payment challan (CPR) provided for this purpose.
- b) Taxpayers who already declared the property and paid the tax under section 7E in their tax return for the tax year 2022 or are exempt from the tax due to a court order, must obtain a certificate (Form ‘A’) from the Commissioner Inland Revenue who has jurisdiction over them.
- c) In order to secure the necessary certificate, taxpayers will complete the essential particulars within Form ‘A’ and deliver it to the Commissioner Inland Revenue. Within a span of seven days, the commissioner will assess the provided information and subsequently release the certificate, streamlining the process for efficiency and ease.
- d) For non-ATL individuals, they must pay the tax under section 7E and provide evidence of payment to the transferring authority using the separate payment challan provided in the FBR online payment system. The issued receipt will function as substantiating evidence for the recently added sub-section (2A) within section 236C of the ordinance.
The FBR has eased rules for property sellers under 7E in the new updates. Some of the changes are:
Exemption for Non-Resident Individuals:
Non-resident individuals, which includes non-resident Pakistanis, are relieved from taxation according to section 78. As a result, the criteria laid out in Circular No. 1 will not be applicable to them. Nevertheless, they must present relevant documents alongside a duly completed form to the transferring authority.
Special Cases Granted Exemption:
Individuals falling within this category, such as martyrs (Shaheeds) or their dependents, armed forces personnel, war-wounded individuals, and ex-servicemen, are exempted, provided they can present valid proof.
Exemption for First-Year Property Acquisition:
Properties procured during the initial year, for which the purchaser has settled tax under section 236K, are also exempted however, the seller is obligated to provide a Computerized Payment Receipt (CPR) to the transferring authority.
Agriculture Property Exemption:
Immovable mainkan togel di Playme8 dan dapatkan nomor keberuntungan property employed for agricultural purposes (excluding farmhouses) is not subject to the regulations of Section 7E. However, if farmhouses are involved, they will be subject to the stipulations of Circular No. 1.
Exemption for Registered Local Authorities and Developers:
Immovable property owned by local authorities, development entities, builders, or developers duly registered with the Directorate General of Designated Non-Financial Business and Professions (DNFBP) also garners exemption. These entities must provide appropriate certificates to the transferring authority.
Update 15 – August – 2023:
The Lahore High Court (LHC) judgment regarding Section 7E (tax on deemed income basis) of the Income Tax Ordinance 2001 has been put into effect by the Federal Board of Revenue (FBR). Consequently, Section 7E will no longer be applicable to cases (both filers and non-filers) falling under the jurisdiction of the LHC.
As per an income tax circular dated 15.08.2023 released by the FBR, the requirement for acquiring exemption certificates from the Commissioner Inland Revenue has been eliminated for various groups of taxpayers, including non-resident individuals, in accordance with Section 7E of the Income Tax Ordinance 2001.
The conditions specified in the circular for obtaining a certificate from the income tax commissioner will no longer be relevant, as per the statement. Nevertheless, the process of transferring authority over immovable property will still involve maintaining accurate records of the seller/transferor details, along with necessary documentation pertaining to properties being sold or transferred in accordance with the specified scenarios.
Baca juga : Situs slot gacor terbaru maxwin, Playme8 garansi jackpot
References:
