KARACHI: Federal Board of Revenue (FBR) has made mandatory purchase of assets of certain amounts through banking instruments, including crossed cheque or crossed pay order.
FBR sources said that in order to discourage undocumented economy the government had made changes in Income Tax Ordinance, 2001 through Finance Act, 2019.
A new Section 75A to the Income Tax Ordinance, 2001 has been inserted under which:
(1) 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.
The FBR officials said that any person who purchases immovable property having fair market value greater than rupees five million through cash or bearer cheque then such person shall pay a penalty of five percent of the value of property determined by the Board under sub-section (4) of section 68 or by the provincial authority for the purpose of stamp duty, whichever is higher.