ISLAMABAD: The government has promulgated the Income Tax Amendment Ordinance 2021 to change the dates for extension in the tax amnesty scheme for the construction sector from January 1, 2021.

The Income Tax Amendment Ordinance 2021 has amended relevant provisions of the Income Tax Ordinance 2001 and rules for computation of profits and gains of builders and developers and tax payable thereon.

The Income Tax Amendment Ordinance 2021 has been made effective from January 1, 2021.

Under the Income Tax Amendment Ordinance 2021, the income computed and tax payable shall be on project-to-project basis which shall be computed and paid at the specified rates.

The estimated project life for tax purposes shall not exceed three and a half years.

According to the Income Tax Amendment Ordinance 2021, in case of existing incomplete projects, the estimated project life shall be treated as four years maximum from tax year 2020 through tax year 2023 and the tax payable shall be reduced by the percentage of completion up to the last day of accounting period pertaining to tax year 2019 or tax year 2020 as declared in the registration form.

Provided further that where the benefit of sub-section 3 of section 100D is required to be claimed by builder or developer, the project shall be registered latest by June 30, 2021, Ordinance 2021 said.

Under the Ordinance, the last date for seeking immunity by builders and developers from probing their source of funds, and availing fixed tax regime has been extended from 31st December 2020 to 30th June 2021.

Similarly, the last date for builders and developers who want to avail fixed tax regime has been extended from 31st December 2020 to 31st December 2021.

Under the Income Tax Amendment Ordinance 2021, the last date for completion of projects has been extended from 30th September 2022 to 30th September 2023, and the last date for buyers of housing units and plots has been extended from 30th September 2022 to 30th March 2023.

The Income Tax Amendment Ordinance 2021 has also amended the registration and filing of returns by the builders and developers.

Under the revised procedure, a builder or developer shall electronically register a project on IRIS through the FBR website on or before December 31, 2021.

Where benefit of sub-section 3 of section 100D is required to be claimed by developer or builder, the project shall be registered latest by June 30, 2021, the Ordinance added.

Copyright Business Recorder, 2021