Business & Finance Print 2022-08-09

Advance tax on immovable property: FBR withdraws holding period exemption

  • Sub-section (3) of section 236C of the Income Tax Ordinance, 2001 has been omitted
Published August 9, 2022 Updated August 10, 2022

LAHORE: The Federal Board of Revenue (FBR) has withdrawn the holding period exemption for the collection of advance tax on sale or transfer of immovable property.

Sub-section (3) of section 236C of the Income Tax Ordinance, 2001 has been omitted.

“Now advance tax on sale or transfer of immovable property will be collected under this section irrespective of holding period,” the FBR added.

The Board has introduced changes through a notification in the Income Tax Ordinance 2001 for the collection of withholding taxes on sale or purchase of immovable property.

Rs30bn additional taxes to be finalised soon: FBR

According to the notification, the advance tax would be collected from every seller irrespective of the holding period. Earlier, an exemption was available for a seller if he held the property for at least 4 years.

Furthermore, the rate of tax for non-filers has been increased by 100% for 236C and 250% for 236K. The rate of advance tax on sale and purchase of immovable property has been enhanced by 100%.

The tax rate has been enhanced on property transaction through Finance Act, 2022. The FBR said the rate of advance tax on sale or transfer and on purchase or transfer of immovable property has been enhanced from 1% to 2%.

Meanwhile, in case of purchaser of immovable property who is not appearing on the active taxpayers list, rate of tax to be collected under section 236K of the Income Tax Ordinance, 2001, will increase by 250% of the rate specified in Division XVIII of Part IV of First Schedule. Necessary change has been incorporated in rule 1 of Tenth Schedule to the Income Tax Ordinance 2001, the FBR added.

Copyright Business Recorder, 2022


Comments are closed.

Altaf Khokhar Aug 09, 2022 08:35am
Taxation shall not be used to impose a fine upon the people, to paraphrase, and this is immovable property… devolving an entire class of persons, the principle against this level of taxation is implicitly written into the Constitution itself. Otherwise, eventually, govt. sponsored agency would gain a undue advantage over the sale and purchase of land in Pakistan.
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Ovais Hameed Aug 09, 2022 01:44pm
Such a cruel decision
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Aftab Hussain Aug 09, 2022 10:58pm
Instead of imposing bad texes on public it's better if govt۔ may cotrole extra expenses of beurocrates۔ public already express deep concerns on texes vs extra ordinary packages of over 18 grade officers۔ don't badly mess with public money۔
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Khawar Rana Aug 10, 2022 07:41am
I am not in a property business neither an investor but I think such taxes affect circulation of money which is very essential for economy of a country. More you increase taxes there will be less local business activities and at the end government will not meet its target of tax collection. I would call it stupidity of FBR experts.
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Muhammad Aug 10, 2022 07:57am
Very aggressive taxation no relief at all this govt gone crazy or shall I say desperate to collect money from common man disappointed ☹️
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Muhammad Adnan Tariq Aug 10, 2022 09:32am
I dokt understand why they are imposing suh taces especially on middle who is already depressed because of insane inflation. To me there is a need of introducing slabs like property having value up to Rs. 3 mlm is not subject to any advance as this would ease the life of miserable middle class.
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Sohailuddin Alavi Aug 10, 2022 11:10am
It has been a long standing need that an integrated policy framework for imposition of Govt levies and taxes be established. But it seems, the tax administration find it more convenient to follow ad hoc system whereby they impose taxes without regard to its legitimacy, rationality and mist importantly impact. Unfortunate that they impose tax by way of extortion.
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Imran Jutt Aug 10, 2022 01:47pm
gain tax duratin
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Myr Aug 10, 2022 03:32pm
Strange this is tax can only be imposed n approved by Parliament, but here fbr via a simple notification by tax officer gets applicable on entire country. This is surprising. N illegal. Bcos any such amendment is called a money bill, only charge ale by Parliament on the public.
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Babar Usman Aug 10, 2022 03:45pm
This decision of abolishing 236 C is highly deplorable and cruel. 4 years is not a small time for someone to hold on to one's investment and then at the end of it government again wants its share in the form of taxation and that too at enhanced rate of 2%. Thus is highly unfair and will be counter productive.
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A.S Khan Aug 10, 2022 03:49pm
@Aftab Hussain, an 18 grade bureaucrat here earning Alhumdulilah only Rs. 100,000 per month. With a minimum saving of around rs.10-15 thousand only per month. My kids are not going to school at this age, when school will start I might have to start taking loans. Please tell me which extra ordinary packages do we 18 grade employees get so that I may apply for that job too.
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Abid Hussain Aug 10, 2022 05:40pm
After high rate of inflation government wants to impose several taxes on poor public. But they are not going to cut their own expenses. Ministers, Prime Minister, High officials and generals enjoyed the luxurious life on taxpayers. Is this justified ? They should shorten the governments expenses. Hinders of thousands dollars being expend by foreign affairs without any input . Military attaches, Trade attaches and ……..are normally blessed by them and most of them are their relatives.
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Mehran khan Aug 10, 2022 05:51pm
Really estate is the only sector in Pakistan in which common man is earning money so Govt is planning to close this sector too like others sectors been closed due to poor policies.. Due to their failure public faces such cruel and tough decisions
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Khan Aug 10, 2022 07:33pm
I think our government and financial departments are gone crazy. After these step nobody can buy and sale their properties and the tax collection become lower
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Ejaz Ahmed Butt Aug 10, 2022 07:59pm
This is just to discourage property purchase in Pakistan as noon league also done such cheep thing in their previous govt only to promote property of dubai, all big investors are now investing in Dubai property
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Abdul majeed khan Aug 10, 2022 08:25pm
Sir 236c air 236k me filer air non filer ma tax bta de
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Hamid Ali Aug 11, 2022 08:55am
Laaaaaanat Baishumaaar
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sajid Aug 11, 2022 11:08am
@A.S Khan, please also tell us about the under the table earning that you guys usually have.
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Muhammad imran Khan Aug 12, 2022 05:44am
Such a stupid decision,bcz more havey taxes results,no buying and no selling of property and no tax collection...low tax will apriciat people investing in property business as a result lots of tax collection
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Hussain Naqvi Aug 12, 2022 06:26pm
AslamoAlikum: FBR is our national institute. Why to criticise ? We must pay our taxes to build our nation. To all those who critcised FBR & others please contribute your positive and constructive thoughts on mass media. Regards
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Hussain Naqvi Aug 13, 2022 02:26am
@Abdul majeed khan, "Humorous" Good sense of humor. Regards
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Fazalur Rehman Sep 12, 2022 11:47am
Sir i have purchase house on 2018 and under process in KDA at Rs.42 lacs i m filer but seller may be filer so what amount of FBR would be deposited
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Akbar Attari Sep 23, 2022 11:10am
@A.S Khan, Pyare bhai Apko apney Expenses km krney chayee..
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Adeel Riaz Jun 26, 2023 05:04pm
Million will lose jobs after such taxation Deemed income law imposed last Already crippled this sector Now who will I invest in construction or real estate sector
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Ijaz Jul 24, 2023 09:48pm
Thnks for returning money
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