ISLAMABAD: The Federal Board of Revenue (FBR) has said that certain persons/authorities have been brought in to the definition of withholding agents for collection of tax on immovable property transactions.
In this regard the FBR said that changes have been made to Income Tax Ordinance, 2001 through Finance Act, 2021.
The FBR said that all persons effecting sale and purchase of properties are required to collect tax under section 236C and 236K of the Ordinance.
However, due to the lack of explicit provision certain persons like public and private real estate projects, joint ventures and private commercial concerns are not collecting these taxes which is giving rise to undue litigation.
These have been added in the list of withholding agents in section 236C and 236K.
Law provides mechanism for collection of tax on purchase of property in installments where payment for purchase of property is made in installments.
Such taxpayers have to pay withholding tax again at the time of transfer. It has been made possible that such person may not be subjected to double withholding tax collection by amending explanation in section 236K .