PTBA identifies ambiguity in property value declaration

PTBA identifies ambiguity in property value declaration

Pakistan Tax Bar Association (PTBA) on Tuesday identified ambiguity in declaring of immovable property in income tax return filing.

PTBA President Rana Munir Hussain in a letter to the chairman of Federal Board of Revenue (FBR) stated that the apex tax bar had received several representations from the members of different affiliated tax bars across the country; one of the reasons of delay in filing of Income Tax Return for the Tax Year 2022 in is an ambiguity in declaration of value of the properties purchased and sold during the year.

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The said burning issues need the consideration of the FBR in the light of prevailing circumstances.

In this respect tax bar summarized the following questions: –

Question No. 1

A tax payer sold his immovable property in consideration of Rs.6,000,000/- through a written agreement to sell during the tax year 2022 and received the said amount in shape of pay order as provided u/s 75A of the Income Tax Ordinance 2001.

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Whereas at the time of execution of sale deed the parties were compelled to mention the sale price at Rs.7,500,000/- as per rate notified by the D.C being minimum price.

The PTBA urged the FBR to clarify that can the tax payer (seller) incorporate the sale proceed at Rs.7,500,000/- as appearing on the registered sale deed in his wealth reconciliation statement or he will have to record the actual consideration of Rs.6,000,000/- received from the buyer?

Question No. 2

A tax payer sold his immovable property through agreement to sell in consideration of Rs.40,000,000/- and received the said amount in shape of pay order as provided u/s 75A of the Ordinance.

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Sale deed was executed at Rs.45,000,000/- being the minimum price notified by D.C.

On the other hand, the seller as well as the buyer paid the tax u/s 236C and 235K at the value fixed by FBR i.e. Rs.6,500,000/-.

Clarification is sought.

Whether the seller can record in his wealth statement the amount at Rs.65,000,000/- whereas in actual, he received Rs.40,000,000/-.

What price of the asset has to declared by the buyer in his wealth statement?

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The actual price paid at Rs.40,000,000/- ; OR

The price fixed by D.C. at Rs.45,000,000/-; OR

The price fixed by FBR at Rs.65,000,000/-.

In the light of the submissions made above it is requested to issue a clarification as early as possible. Moreover, timely decision taking in this regard would not only be appreciated by the taxpayers/legal fraternity, who are working very hard day and night by playing their part towards the legal responsibility for contributing towards national exchequer but also in collection of taxes at the appropriate time.