FBR issues tax rates for income from immovable properties

ISLAMABAD: Federal Board of Revenue (FBR) has issued withholding tax rate on rental income of immovable properties, which are applicable from July 01, 2019.

The FBR issued withholding tax card for tax year starting July 01, 2019, and said that every prescribed persons (withholding agents) shall collect withholding tax under Section 155 of Income Tax Ordinance, 2001 at the time of receipt of rent of immovable property at the time the rent is actually paid.

The FBR said that the tax shall be adjustable. The withholding tax shall be deducted at the following rates:

A. In case of individual or Association of Persons (AOPs)

1. Where the gross amount of rent does not exceed Rs, 200,000: No tax shall be deducted.

2. Where the gross amount of rent exceeds Rs, 200,000 but does not exceed Rs, 600,000: 5% of the gross amount exceeding Rs, 200,000

3. Where the gross amount of rent exceeds Rs, 600,000 but does not exceed Rs, 1,000,000: Rs, 20,000+10% of the gross amount exceeding Rs, 600,000.

4. Where the gross amount of rent exceeds Rs, 1,000,000 but does not exceed Rs, 2,000,000: Rs,60,000+15% of the gross amount exceeding Rs, 1,000,000.

5. Where the gross amount of rent exceeds Rs, 2,000,000 but does not exceed Rs. 4,000,000: Rs, 210,000+20% of the gross amount exceeding Rs, 2,000,000.

6. Where the gross amount of rent exceeds Rs.4,000,000 but does not exceeds Rs. 6,000,000: Rs.610,000 plus 25 per cent of the gross amount exceeding Rs.4,000,000.

7. Where the gross amount of rent exceeds Rs.6,000,000 but does not exceeds Rs. 8,000,000: Rs.1,110,000 plus 30 percent of the gross amount exceeding Rs.6,000,000.

8. Where the gross amount of rent exceeds Rs.8,000,000: Rs.1,710,000 plus 35 percent of the gross amount exceeding Rs.8,000,000.

B. The FBR said that in case of company the tax rate shall be 15 percent.

The FBR further explained that as per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax rental income deducted under section 155.

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