KARACHI: Federal Board of Revenue (FBR) will collect advance income tax on sale of immovable properties on the basis of fair market value.
Sources in FBR said that the purchaser of immovable property shall make payment of advance tax income tax on the amount determined at fair market value not on the DC value or valuation tables notified by the FBR.
Under Section 236K of Income Tax Ordinance, 2001, advance tax on purchase or transfer of immovable property.
(1) Any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.
Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society and registrar of properties.
(2)The advance tax collected under sub-section (1) shall be adjustable.
(3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.
(4) 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:
“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.”
The rate of tax to be collected under section 236K shall be 1 percent of the fair market value from a person appeared on Active Taxpayers List (ATL). The rate shall be at two percent of the fair market value from persons not appearing on the ATL.