ISLAMABAD: Federal Board of Revenue (FBR) updated income tax law paving way for reduction in income tax rate on low cost housing projects by 50 percent.
The FBR updated Income Tax Ordinance, 2001 incorporating changes introduced through Finance Act, 2019.
As per Second Schedule of the updated Ordinance, the tax payable on profits and gains derived by a person from low cost housing projects shall be reduced by fifty percent.
The reduction in tax liability under this clause shall apply to such project which is—
(a) owned and managed by a company formed for operating the said project and registered under the Companies Act, 2017 and having its registered office in Pakistan; and
(b) not formed by the splitting up, or the reconstruction or reconstitution, of a business already in existence or by transfer to a new business of any machinery or plant used in a business which was being carried on in Pakistan at any time before the commencement of the new business; and
(c) a low cost housing project under which the maximum sale price of a single housing unit is two and a half million rupees.
