CGT up to 15% slapped on immovable properties

CGT up to 15% slapped on immovable properties

ISLAMABAD: The federal government has slapped capital gains tax (CGT) up to 15 per cent on disposal of immovable properties within one year after the purchase.

The government announced budget 2022/2023 on June 10, 2022 and announced various tax measures to boost revenue.

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Through the Finance Bill 2022 amendments has been introduced to Section 37 of the Income Tax Ordinance, 2001.

Through the amendment, sub-section 1A of Section 37 has been substituted, which is as follow:

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“(1A) Notwithstanding anything contained in sub-section (1), gain arising on disposal of immovable property situated in Pakistan, to a person in a tax year shall be chargeable to tax under the head capital gains at the rates specified in Division VIII of Part I of the First Schedule.”

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The rates specified in Division VIII of Part I of the First Schedule are:

S.NoHolding PeriodRate of TaxRate of TaxRate of Tax
Open PlotsConstructed PropertyFlats
(1)(2)(3)(4)(5)
1.Where the holding period does not exceed one year15%15%15%
2.Where the holding period exceeds one year but does not exceed two years12.5%10%7.5%
3.Where the holding period exceeds two years but does not exceed three years10%7.5%0
4.Where the holding period exceeds three years but does not exceed four years7.5%5%
5.Where the holding period exceeds four years but does not exceed five years5%0
6.Where the holding period exceeds five years but does not exceed six years2.5%
7.Where the holding period exceeds six years0%

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