Jewelers, real estate agents to maintain register, report suspicious transactions: draft rules issued

ISLAMABAD: Federal Board of Revenue (FBR) has proposed to make mandatory for jewelers and real estate agents to report suspicious transactions.

In this regard the FBR issued draft rules through SRO 1320(I)/2019 to make amendments in Income Tax Rules, 2002.

As per the draft rules, the designated persons as jewelers and real estate agents should maintain documents and records, where the value of transaction exceeds Rs2 million in case of immovable properties and Rs one million in other cases.

 

The FBR said that the designated persons would require to obtain and maintain the following relating to its buyers and sellers, namely:

In case of an individual any of the following documents:

i. copy of computerized National Identity Card (CNIC) issued by National Database and Registration Authority (NADRA).

ii. copy of National Identity Card for Overseas Pakistanis (NICOP) issued by NADRA.

iii. copy of Pakistan Origin Card (POC) issued by NADRA.

iv. copy of Alien Registration Card (ARC) issued by NADRA, and

v. copy of passport, having valid visa on it or any other proof of legal stay along with the passport (foreign nationals only).

 

The designated persons also required to keep a list of all such customers where the business transaction was refused or needed to be closed either on account of failure of the customer to provide the relevant documents or the original documents for viewing as required.

 

Regarding furnishing of information, according to the draft rules, the sale and purchase register for the immediately preceding calendar month shall be uploaded by the designated persons on the IRIS online system within 15 days of the end of the preceding calendar month for transactions.

The draft rules said that the designated persons would mark a transaction as suspicious in the IRIS online system if the person has reason to believe that the transaction or a pattern of transactions of which the transaction is a part:

(a) involves funds derived otherwise than from the business activity or assets declared to the income tax authorities;

(b) is designed to evade any requirement of the Income Tax Ordinance, 2001 or to conceal the beneficial owner or his activity.

(c) has no apparent economic or lawful purpose after examining the available facts, including the background and possible purpose of the transaction; or

(d) involves financing of terrorism, including fund collected, provided, used or meant for, or otherwise linked or related to, terrorism, terrorist acts or organization and individual concerned with terrorism.

According to the draft rules, the designated persons have also been asked to mark as suspicious transaction if the buyer or seller –

(a) frequently changes bank accounts;

(b) uses a bank account other than an account maintained in the name of beneficial owner;

(c) makes or receives payment in cash or primarily in cash; or

(d) maintains a creditor or debtor account with the designated person and instructs the designated person to adjust the balance of his account against a creditor debtor account of another buyer or seller.

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