ISLAMABAD: The National Assembly has approved a mega tax amnesty scheme for real estate sector.
Now people in real estate sector can whiten black money by paying only three per cent tax. The lower house of the parliament has given approval to Income Tax Amendment Bill 2016, which would whiten an estimated Rs 7 trillion of black money invested in the sector.
It is pertinent to mention that the Federal Board of Revenue (FBR) has been opposing the bill during the National Assembly’s Standing Committee on Finance and Revenue. However, the government had introduced amendments in the Income Tax Ordinance to collect taxes on property transactions on demand from the realtors.
Under the amnesty scheme, gor immovable property acquired on or after July 1, 2016, the rate of tax is 10 %, where holding period of immovable property is up to one year; the rate of tax is 7.5 % where holding period of immovable property is more than or equal to one year but less than two years. The rate of tax is 5% where holding period of immovable property is more than or equal to two years but less than three years; the rate of tax is 0 % where holding period of immovable property is more than three years.
For immovable property acquired before July 1, 2016, the rate of tax is 5% where holding period of immovable property is up to three years. The rate of tax is 0% where holding period of immovable property more than three years.
Meanwhile, the capital gain tax will not be applicable on the first sale of plots given to the dependents of armed forces personnel who have been martyred in the line of duty. Basic threshold of Rs 3 million for application of withholding tax on purchase of immovable property was increased to Rs 4 million.
