ISLAMABAD: Federal Board of Revenue (FBR) has issued draft rules for computation of tax liabilities on builders and developers for comments of the stakeholders.
The FBR, through an SRO, circulated the draft of the mode and manner for collection of tax under sections 7C and 7D from builders and developers through proposed amendments to the Income Tax Rules, 2002.
Under the proposed amendments chief commissioner Inland Revenue may request the building control authority for suspension or cancellation of building plan in case of payment default.
As per the draft amendments, Rule 13S introduced to Income Tax Rules, 2002 regarding advance ta on builders and developers. According to this every building control authority at the time of approval of a land development plan or of a building construction plan and before issuing NOC to sell, collect advance tax at the rate of five percent of tax liability computed at the rates defined under Income Tax Ordinance, 2001 from a builder or a developer as the case may be.
The FBR said that the mode and manner for payment and collection of tax from builders under Rule 13T is applied in a manner which stated every builder after obtaining approval of a building plan from the authority and NOC to sell, shall furnish online a copy of building plan and evidence of partial payment of five percent tax to the chief commissioner along with computation of final tax liability on the basis of covered area as per rates provided in the Ordinance. The chief commissioner shall, after being satisfied that the rates are applied correctly and after making such inquiry as he thinks fit, shall online issue a schedule of advance tax instalment to be paid by the builder.
The FBR said that building control authority shall suspend or cancel the building plan on the written request of the chief commissioner in case of default in payment of instalment under the rules.
Rules for computation and collection of Tax U/S 7C & 7D for Builder and Developers
