KARACHI: Federal Board of Revenue (FBR) is monitoring transactions of immovable properties to check sales and purchases on fair market value, sources told PkRevenue.com.
The sources said that the FBR had reduced the withholding tax rate to one percent from July 01, 2019 to be collected from purchaser of immovable properties. However, this rate should be two percent in case the buyer is not listed on the Active Taxpayers List (ATL).
The sources said that the tax offices had been asked to monitor the transaction of immovable properties under the new rates with true declaration of amount.
The sources said that the FBR was fully aware about the size of undeclared money invested in the real estate business. Therefore, the monitoring was started. However, comprehensive data of buyers and sellers will be provided by withholding agents to the FBR by January 31, 2020.
The sources said that the withholding agents for immovable transactions are those persons registering, recording or attesting or transfer including local authorities, housing authorities, Housing Society, Co-operative Society and registrar or properties.
They said that tax offices would start massive crackdown after receiving the data from withholding agents.
They said that people were not declaring true values of immovable properties at the time of registration or transfer, which was causing massive loss to national exchequer.
They further said that by concealing the true amount, buyers and sellers were also promoting black economy.
The sources said that withholding agents would provide details of buyers and sellers, including names, addresses, CNICs, declared value and amount of tax withheld.
The FBR sources the tax authorities would examine the mode of payment and compare the declared value with the prices prevailed in the open market.
They said that after conducting examination the tax authorities would ask buyers and sellers of immovable properties to file income tax returns, in case those persons were not in the tax net.