KARACHI: A person who purchases immovable property having fair market value greater than Rs5 million through cash or bearer cheque then the person is liable to pay five percent of the value of immovable property as penalty.
From tax year 2020 starting July 01, 2019 the purchase of immovable property has been prohibited through any bearer instrument or cash if its value is above Rs5 million.
According to the FBR if a person commits offence than 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 purposes of stamp duty, whichever is higher.
A new section has been inserted in the Ordinance which provides that purchase of assets set as out below shall now only be made through a crossed cheque drawn on a bank or through a crossed demand draft or crossed pay order or any other crossed banking instrument –
(a) Immovable property having fair market value greater than Rs05 million; (b) Any other asset having fair market value of more than Rs01 million.
For the purpose of this section, the fair market value means the value notified by FBR under Section 68(4) of the Ordinance or the value fixed by the provincial authority for the purposes of stamp duty, whichever is higher.
In the event, the transaction of purchase of the asset is not carried out in the manner prescribed above, such asset shall not be entitled for allowance of depreciation or amortization, as specified under the Ordinance.
The amount paid other than in the specified manner shall not be regarded as cost under Section 76 of the Ordinance for the purpose of computing gain on disposal of such asset.
In addition a penalty of five percent of the fair market value of the asset so purchased shall also be levied.