FBR issues withholding tax rates for sale, purchase of immovable properties

KARACHI: Federal Board of Revenue (FBR) has notified withholding tax rate for active and non-active taxpayers at the time of sale and purchase of immovable properties as amended through Finance Act, 2019 and applicable from July 01, 2019.

The FBR said that every person registering, recording or attesting or transfer including local authorities, housing authorities, housing society cooperative society and registrar or properties shall collect withholding tax under Section 236C of Income Tax Ordinance, 2001 from seller of immovable
property at the time of registering, recording or attesting the transfer.

The withholding tax rate shall be one percent of gross amount of the considering received in case of active taxpayer, who filed their income tax return within due date.

Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the
Ordinance), i.e 2 percent of the gross amount of the consideration received.

The tax shall be minimum tax if property is acquired and disposed off within the same tax year; Otherwise adjustable.

Advance tax, under this section, is not be collected if the immovable property is held for a period exceeding five25 years.

The FBR said that every person registering, recording or attesting or Transfer including local authorities, housing authorities, Housing Society, Co-operative Society and registrar or properties shall collect adjustable withholding tax from the purchaser of immovable properties at the time of registering, recording of immovable properties under Section 236K of Income Tax Ordinance, 2001.

Under Section 236K(1) the tax rate shall be one percent of the fair market value for active taxpayers.

Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e 2 percent of the fair market value.

Advance Tax on payment of installment in respect of purchase of allotment of immovable property where transfer is to be effected after making payment of all installments Under Section 236K (3) the tax rate shall be one percent of the fair market value.

Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e 2 percent of the fair market value.

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