Immovable property purchase made mandatory through banking channel

KARACHI: Tax authorities have said that payment for purchase of immovable properties above Rs5 million is mandatory to be paid through banking channel.

Sources in Federal Board of Revenue (FBR) further said that payment for assets other than immovable properties above Rs1 million is also mandatory to be paid through banking channel.

They said that under Section 75A of the Income Tax Ordinance, 2001 the purchase of such assets has been made through banking channels.

Section 75A: Purchase of assets through banking channel.

(1) Notwithstanding anything contained in any other law, for the time being in force, no person shall purchase-

(a)immovable property having fair market value greater than five million Rupees; or

(b)any other asset having fair market value more than one million Rupees, otherwise than by a crossed cheque drawn on a bank or through crossed demand draft or crossed pay order or any other crossed banking instrument showing transfer of amount from one bank account to another bank account.

(2)For the purposes of this section in case of immovable property, fair market value means value notified by the Board under sub-section (4) of section 68 or value fixed by the provincial authority for the purposes of stamp duty, whichever is higher.

(3)In case the transaction is not undertaken in the manner specified in sub-section (1),

a)such asset shall not be eligible for any allowace under sections 22, 23, 24 and 25 of this Ordinance; and (b)such amount shall not be treated as cost in terms of section 76 of this Ordinance for computation of any gain on sale of such asset.

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