LAHORE: The Federal Board of Revenue (FBR) has issued updated rates of withholding tax on sale and purchase of immovable properties under Section 236C and 236K of Income Tax Ordinance, 2001.
The withholding tax shall be one percent to be paid by seller of immovable property. The tax rate shall be increased by 100 percent i.e. 2% in case person is not on the Active Taxpayers List (ATL).
It will be minimum tax if property is acquired and disposed off within the same tax year; otherwise adjustable. Advance tax, under this section, is not collected if the immovable property is held for a period exceeding four years.
Similarly, a purchaser of property shall pay 1% of the transaction made on the basis of fair market value. The tax rate shall be 2% of the fair market value in case person is not on the ATL. Tax experts said any person responsible for collection of payment in installment shall collect the tax from the purchaser or allottee of the immovable property.
Copyright Business Recorder, 2021