All
 

 

Just in:  

You are here: Home»Pakistan»Business & Economy»FBR to collect CVT on purchases of immovable property

fbr-RECORDER REPORT

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to collect Capital Value Tax (CVT) on purchases of immovable property within the jurisdiction of the Islamabad Capital Territory with identical structure as adopted by the provinces.

In this connection, the FBR issued an income tax circular here on Friday.

According to the circular, prior to the 18th Constitutional Amendment effective from April 19, 2010 “Entry 50 of the Federal Legislative List contained in Part-I of the Fourth Schedule to the constitution of Islamic Republic of Pakistan” empowered the Federal Legislature to levy taxes on the capital value of assets, not including taxes on capital gains on immovable property.

The funds “on capital gains” were omitted by the 18th Constitutional Amendment.

The effect of omission of these words is that the Federal Legislature cannot impose taxes on capital value of immovable property located in the provinces.

Accordingly, CVT was abolished through the Finance Act of 2010 as charge and levy of CVT became a provincial subject.

Different provinces have started levy and collection of CVT on immovable property through their respective Legislation.

However, CVT in Islamabad Capital Territory is to be levied by the Federal Legislature and accordingly through amendment made in Sub-Section (1) of Section 7 of Finance Act of 1989, the levy of CVT has been reintroduced in Islamabad Capital Territory in respect of immovable property.

The CVT is payable with effect from July 1 this year on the purchase of immovable property with identical structure as adopted by the provinces. The FBR further said that a new paragraph in the Table in Sub-Section (1) of Section 7 has been inserted to prescribe the rate of CVT leviable on immovable property with effect from July 1, 2012:

The FBR explained the CVT in case of residential immovable property, (other than flats), situated in urban area, measuring at least 500 square yards or one-kanal (which ever is less) and more. Where the value of immovable property is recorded, the CVT at the rate of 2% of the recorded value; where the value of immovable property is not recorded, the CVT would be Rs100 per square yard of the landed area and where the value of immovable property is a constructed property, the rate of CVT would be Rs10 per square feet of the constructed area in addition to the value worked out above.

In cases of residential flats of any size situated in urban areas, where the value of immovable property is recorded, the value of the CVT would be 2% of the recorded value and where the value of immovable property is not recorded, the value of the CVT would be Rs100 per square feet of the covered area of the immovable property.

In case of residential flats of any size situated in urban areas, where the value of immovable property is recorded, the value of the CVT would be 2% of the recorded value of the landed area and where the value of immovable property is not recorded, the rate of the CCVT would be Rs 100 per square feet of the landed area; where the immovable property is a constructed property, the CCVT would be Rs 10 per square feet of the constructed area in addition to the value worked out above.

The FBR also issued a clarification in respect of Transfer, Mortgage and Power of Attorney.

The FBR said that the Circular No2 of 2006 dated July 1, 2006 and September 14, 2006. Circular No2 of 2007 dated July 4, 2007 and Circular No4 of 2009 dated July 18, 2009 shall continue to apply in respect of transfers representing purchase, gift, exchange, surrender, power of attorney, relinquishment of rights and payments representing premium and renewal of lease in respect of immovable property and mortgage deeds executed by banking companies.


 



 
Index Closing Chg%
Arrow DJIA 16,501.65 0.08
Arrow Nasdaq 4,126.97 0.83
Arrow S&P 1,875.39 0.22
Arrow FTSE 6,674.74 0.11
Arrow DAX 9,544.19 0.58
Arrow CAC-40 4,451.08 0.74
Arrow Nikkei 14,546.27 1.09
Arrow H.Seng 22,509.64 0.97
Arrow Sensex 22,876.54 0.52





where to buy

cheap wedding dresses

online - weddingdresstrend.com

Buy cheap Nike Mercurials cleats at mercurialscleats.com
cheap wedding dresses on SiteSteer.com - Best Online Wedding Store


Banking Review 2013


Buy direct from

China free shipping trade platform

Annual2012/13
Foreign Debt $60.9bn
Per Cap Income $1,368
GDP Growth 3.6%
Average CPI 7.5%
MonthlyFebruary
Trade Balance $-1.433 bln
Exports $2.167 bln
Imports $3.600 bln
WeeklyApril 14, 2014
Reserves $9.713 bln