Tax collection from property transactions surges to Rs61 billion

Tax collection from property transactions surges to Rs61 billion

ISLAMABAD: The annual collection of withholding tax from transactions of immovable properties has surged by 98 per cent to Rs61.06 billion during fiscal year 2020/2021.

According to official statistics made available to PkRevenue.com, the collection from sales and purchase of immovable properties was Rs30.77 billion during fiscal year 2019/2020.

Sources in the Federal Board of Revenue (FBR) attributed the increase in revenue collection to enhanced activities during the fiscal year due ease in restrictions related to coronavirus.

READ MORE: Advance tax on purchase of immovable property

They said that the first case of coronavirus was identified in February 2019, and then the government resorted to strict lockdown, which stalled the economic activities.

However, in the subsequent year the government decided to relax the corona restrictions and brought the economic activities to normal.

The FBR collects withholding tax under section 236C of the Income tax Ordinance, 2001 on sale and transfer of immovable properties.

READ MORE: Advance tax on sale or transfer of immovable property

Furthermore, the FBR collect withholding tax under Section 236K of the Income Tax Ordinance, 2001 on purchase of immovable properties.

The collection of withholding tax on sale or transfer of immovable properties registered a growth of 76 per cent to Rs7 billion during fiscal year 2020/2021 as compared with Rs12.2 billion in the preceding fiscal year.

The collection of withholding tax on purchase of immovable properties registered an unprecedented growth of 105 per cent to Rs49 billion during fiscal year 2020/2021 as compared with Rs24 billion in the preceding fiscal year.

READ MORE: FBR issues new, revised tables of property valuation

The FBR sources said that the collection during the fiscal year 2021/2022 would increase significantly due to change in valuation tables for the purpose of withholding tax collection from transactions of immovable properties.

The FBR on December 01, 2021 issued fresh and revised valuation of immovable properties for various cities of the country.

However, the implementation of the fresh valuation table will be applicable from January 16, 2021.

READ MORE: FBR postpones property valuation implementation

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