ISLAMABAD: Federal Board of Revenue (FBR) has obtained data of land and immovable property transactions from provincial registrar offices and started proceedings against those who concealed the actual amount to purchase the assets.
FBR sources said that the data had been obtained on the basis of withholding tax deduction by the property registrars. The sources said that the FBR was probing the lower values declared by the purchasers against the fair market values.
The FBR is also probing those people who have such immovable properties where filing of income tax returns is mandatory.
As per Section 114 of Income Tax Ordinance, 2001 following persons are required to annual income tax returns:
— owns immovable property with a land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
— owns immovable property with a land area of five hundred square yards or more located in a rating area;
— owns a flat having covered area of two thousand square feet or more located in a rating area.
The sources said the FBR has been allowed to investigate transactions of past six years.
The sources said that the FBR through Finance Act, 2018 notified Directorate General of Immovable Property for determination of fair market values and authorized this directorate with immense powers.
The Directorate-General may, subject to the provisions and conditions as may be prescribed, initiate proceedings for the acquisition of property for the reasons to believe that any immovable property of a fair market value has been transferred by a person, hereinafter referred to as the transferor, to another person, hereinafter referred to as the transferee, for a consideration which is less than the fair market value of the immovable property and that the consideration for such transfer as agreed to between the transferor and transferee has been understated in the instrument of transfer for the purposes of ─
(a) the avoidance or reduction of withholding tax obligations under this Ordinance;
(b) concealment of unexplained amount referred to in sub- section (1) of section 111 representing investment in immovable property; or
(c) avoidance or reduction of capital gains tax under section 37.
The sources said that the FBR had extended the filing of income tax returns for tax year 2018 up to August 2, 2019 to facilitate persons to file their returns, especially in those cases where immovable properties had been purchased but not declared.