ISLAMABAD: The capital gain tax on (CGT) disposal of immovable properties has been reduced by 50 percent in order to promote investment in construction industry.
According to Deloitte Yousuf Adil, Chartered Accountants, the Finance Bill 2020 proposed reduction in tax rates by 50 percent on capital gains arising on disposal of immovable property.
This is in line with the Government’s vision to promote construction industry and to provide stimulus for the growth in economy as construction sector provide employment to a number of sub-sectors.
|S. No.||Amount of gain||Rate of tax|
|1.||Where the gain does not exceed Rs.5 million||5%||2.5%|
|2.||Where the gain exceeds Rs.5 million but does not exceed Rs.10 million||10%||5%|
|3.||Where the gain exceeds Rs.10 million but does not exceed Rs.15 million||15%||7.5%|
|4.||Where the gain exceeds Rs.15 million||20%||10%|
A person responsible for registering, recording, or attesting transfer of immovable property is required to collect advance tax from seller of such property.
Such advance tax is not collected where the immovable property is held for a period exceeding 5 years.
The Bill proposes to reduce this time limit of 5 years to 4 years.