Property deals, salaries, car purchase: FBR notifies change in WHT provisions

LAHORE: The Federal Board of Revenue (FBR) has notified change in withholding tax provisions with regard to sale and purchase of immovable property, purchase of motor vehicles and salary income and directed all the chief commissioners Inland Revenue (IR) to monitor withholding sections deduction as per the changed pertinent sections of the Finance Act 2024.

According to the notification dated 1st July 2024, by virtue of the WHT under 236C on sale of immovable property different rates are applicable as per status of filer, late filer and non-filer. Another distinction in rates is as per amount of consideration received by the taxpayer. A new category of late filers has been introduced for persons who are appearing on ATL but have not filed return by the extended due date.

The notification said deduction of WHT would be 3 percent where the gross amount of the consideration does not exceed Rs50 million, 3.5 percent where it exceeds Rs50 million and 4 percent where the consideration exceeds Rs100 million in case the taxpayer is a filer.

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If the taxpayer is not filer within due date, tax rates would change to 6 percent, 7 percent and 8 percent respectively for all the three categories of consideration described in the preceding para.

However, if the taxpayer is a non-filer, a flat tax rate of 10 percent of gross amount of consideration received is to be applied, it added.

Provided that the provisions of this rule would not apply to a person who has filed return by the due date specified in section 118 or by the due date as extended under section 119 or section 214A for all of the last three tax years, preceding the tax year for which the return has not been filed by the due date specified in section 118 or by the due date as extended under section 119 or 214A. WHT under 136K on purchase of immovable property also places distinction of filer, later filer and non-filer in terms of rates that need to be applied and monitored as per consideration received. A filer would pay 3 percent, 3.5 percent and 4 percent where fair market value does not exceed Rs50 million and Rs100 million and exceeds Rs100 million respectively. If the taxpayer has not field return within due date, a taxpayer would pay 6 percent, 7 percent and 8 percent against the above-mentioned categories of consideration respectively. If the taxpayer is non-filer, the three categories of tax rates would increase to 12 percent, 16 percent and 20 percent respectively.

Regarding purchase of motor vehicles first registration, section 213B has been amended as per distinction of filer and non-filer and engine capacity as follows: rate of tax for filer would be 0.5 percent of the value and 1.5 percent of the value for non-filer up to 850cc, 1 percent and 3 percent of the value for the capacity up to 851cc to 1000 cc, 1.5 percent and 4.5 percent of the value for the capacity up to 1001cc to 1300cc, 2 percent and 6 percent of the value for the capacity up to 1301cc to 1600cc, 3 percent and 9 percent for 1601cc t 1800cc, 5 percent and 15 percent for 1801cc to 2000cc, 7 percent and 21 percent for 2001cc to 2500cc, 9 percent and 27 percent for 2501cc to 3000cc and 12 percent and 36 percent for above 3000cc.

So far as WHT on salary income is concerned, it would be zero percent against income if does not exceed Rs600000, 5 percent of the amount exceeding Rs600000 but not Rs12,00,000, followed by Rs30,000 + 15 percent of the amount exceeding Rs12,00,000, followed by 180,000 + 25 percent of the amount exceeding Rs2,200,000 up to Rs3,200,000, followed by 430,000 + 30 percent of the amount exceeding Rs3,200,000 up to Rs4,100,000 and Rs700,000 + 35 percent of the amount exceeding Rs4,100,000.

The specific sectors mentioned in sections 236G and 236H have been omitted. Hence, manufacturers or commercial importers under section 236G and wholesalers, dealers, and distributors under section 236H shall deduct tax irrespective of the sectors, the notification added.

Copyright Business Recorder, 2024