Karachi, August 14, 2023 – The Federal Board of Revenue (FBR) has unveiled a significant measure for property transactions, issuing a new verification form under Section 7E of the Income Tax Ordinance, 2001.
(more…)Tag: immovable properties
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Non-ATL Property Buyers to Face 250% Higher Income Tax in FY 2023-24
Karachi, August 8, 2023 – The non-ATL buyers of immoveable property will face 250 percent higher tax during fiscal year 2023-24, according to the Federal Board of Revenue (FBR).
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FBR Notifies Tax Rates on Immovable Property Rental Income for 2023-24
Karachi, August 3, 2023 – The Federal Board of Revenue (FBR) has announced the tax rates on immovable property rental income for the fiscal year 2023-24.
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FBR Implements New Tax Rates on Sale and Purchase of Immovable Property
Karachi, July 29, 2023 – The Federal Board of Revenue (FBR) has recently put into effect new tax rates on the sales and purchase of immovable properties across the country.
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FBR plans increasing CGT rates, period on immovable properties
Federal Board of Revenue (FBR) is planning to increase capital gains tax (CGT) rates and period on immovable properties in order to discourage short-term buying and selling.
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FBR set to issue fresh valuation tables for immovable properties
ISLAMABAD: Federal Board of Revenue (FBR) is set to issue fresh valuation tables for immovable properties across the country.
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Property prices register 15% decline owing to heavy taxes, political uncertainty
Industry sources have reported a decline of around 15% in the prices of immovable properties during the first three months of 2023 due to the imposition of new taxes and political uncertainty.
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FBR collects over Rs81 billion from sale, purchase of property transactions during TY22
ISLAMABAD: Federal Board of Revenue (FBR) has collected over Rs81 billion from sale and purchase of property transactions during tax year 2022, official documents revealed.
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Tax rates for rental income from immovable property during 2022-2023
Federal Board of Revenue (FBR) has issued withholding tax rates for rental income from immovable properties during 2022-2023.
The FBR issued the withholding tax card for tax year 2023 (July 01, 2022 to June 30, 2023) after amending the Income Tax Ordinance, 2001 through changes brought through Finance Act, 2022.
READ MORE: FBR notifies withholding tax rates for exports during 2022-2023
Following is the text of Section 155 related to rental income from immovable property and rates of tax under this section:
Section 155: Rent of immoveable property.
(1) Every prescribed person making a payment in full or part (including a payment by way of advance) to any person on account of rent of immovable property (including rent of furniture and fixtures, and amounts for services relating to such property) shall deduct tax from the gross amount of rent paid at the rate specified in Division V of Part III of the First Schedule.
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Explanation.- “gross amount of rent” includes the amount referred to in sub-section (1) or (3) of section 16, if any.
Explanation.— For removal of doubt, it is clarified that the sub section (1) shall apply when a payment is made on account of rent of immoveable property irrespective of head of income.
(3) In this section, “prescribed person” means –
(i) the Federal Government;
(ii) a Provincial Government;
(iii) Local Government;
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(iv) a company;
(v) a non-profit organization or a charitable institution;
(vi) a diplomatic mission of a foreign state;
(via) a private educational institution, a boutique, a beauty parlour, a hospital, a clinic or a maternity home;
(vib) individuals or association of persons paying gross rent of rupees one and a half million and above in a year; or
(vii) any other person notified by the Board for the purpose of this section.
READ MORE: Up to 70% income tax imposed on dividends for year 2022-2023
Following are the withholding tax rates on rental income from immovable properties applicable on individuals and Association of Persons (AOPs) and in case those are not on Active Taxpayers List (ATL):
Sr. No. Gross amount of rent Rate of tax Not on ATL 1. Where the gross amount of rent does not exceed Rs300,000 Nil Nil 2. Where the gross amount of rent does not exceed Rs600,000 5 per cent of the gross amount exceeding Rs300,000 100 per cent increase 3. Where the gross amount of rent exceeds Rs600,000 but does not exceed Rs2,000,000 Rs15,000 plus 10 per cent of the gross amount exceeding Rs600,000 100 per cent increase 4. Where the gross amount of rent exceed Rs2,000,000 Rs155,000 plus 25 per cent of the gross amount exceeding Rs2,000,000 100 per cent The rate of withholding tax for rental income from immovable properties in case of companies is 15 per cent and in case of not on ATL the rate is 30 per cent.
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Advance tax on immovable property enhanced by 100%
ISLAMABAD: The rate of advance tax on sale and purchase of immovable property has been enhanced by 100 per cent.
The tax rate has been enhanced on property transaction through Finance Act, 2022.
READ MORE: FBR explains changes in advance tax on motor vehicles
The FBR issued Income Tax Circular No. 15 of 2022/2023 to explain major amendments brought through Finance Act, 2022 to Income Tax Ordinance, 2001.
The FBR said that the rate of advance tax on sale or transfer and on purchase or transfer of immovable property has been enhanced from 1 per cent to 2 per cent.
READ MORE: Pakistan introduces automated system for withholding tax payments
Moreover, sub-section (3) of section 236C of the Income Tax Ordinance, 2001 has been omitted.
“Now advance tax on sale or transfer of immovable property will be collected under this section irrespective of holding period,” the FBR added.
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Meanwhile, in case of purchaser of immovable property who is not appearing on the active taxpayers list, rate of tax to be collected under section 236K of the Income Tax Ordinance, 2001 will increase by two hundred and fifty (250) per cent of the rate specified in Division XVIII of Part IV of First Schedule.
Necessary change has been incorporated in rule 1 of Tenth Schedule to the Income Tax Ordinance 2001, the FBR added.
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