LAHORE: New tax rates have been implemented for the sale and purchase of property in Punjab as the Punjab Land Record Authority (PLRA) has issued a directive to all revenue officers to enforce the collection of taxes from both buyers and sellers based on the revised tax rates.
The PLRA’s move comes in response to amendments introduced by the Finance Act of 2023, which entail adjustments to the income tax rates and related provisions of sections 236C and 236K of the Income Tax Ordinance 2001.
Under the previous tax regime, individuals involved in property transactions were subjected to tax rates of 2 percent for filers and 4 percent for non-filers, as per section 236C. However, the revised rates now stipulate a tax rate of 3 percent for filers and 6 percent for non-filers on the sales, transfers, and disposals of properties.
Similarly, section 236K, which pertains to property purchases, has also undergone modifications. Previously, filers were required to pay 3 percent in taxes, while non-filers were taxed at a rate of 7 percent. Under the new provisions, the tax rates remain at 3 percent for filers, but non-filers are now subject to a higher tax rate of 10.5 percent for property purchases.
The changes came into effect on July 1, 2023, and are designed to streamline the taxation process associated with property transactions. However, failure to adhere to the revised tax rates and provisions could result in legal consequences, as the Federal Board of Revenue (FBR) is empowered to recover any discrepancies identified through scrutiny from the transferring authorities.
An official of the Board of Revenue Punjab informed this scribe that these adjustments aim to align taxation rates with current economic realities while ensuring that revenue collection remains efficient and equitable.
“These changes underscore the government’s ongoing efforts to enhance revenue generation and ensure a fair taxation system in the real estate sector. The new tax rates will play a pivotal role in shaping property transactions across Punjab and are expected to have a significant impact on the local real estate market,” he said
