ISLAMABAD – Pakistani authorities imposed a five percent penalty on property deals over Rs5 million made through non-banking transactions under tightening of regulations.
The development raised concerns in people related to sale and purchase of property as individuals involved in transactions through non-banking channels will now face new taxes. This follows recent moves to increase taxes on property sales and the Federal Board of Revenue’s (FBR) revised property valuations.
The new penalty is being charged under the Income Tax Ordinance of 2001 for property purchases exceeding Rs50lacs in market value, or on any other assets valued above Rs10lac if the transaction occurs outside of banking channels.
Relevant authorities referred to la etter issued by the Board of Revenue of Punjab, which was sent to several authorities, including Registrar of Cooperative Societies, Punjab Land Records Authority, and District Registrars.
Board of Revenue directed sub-registrars, assistant directors of Land Records, and transferring/attesting officers to strictly enforce the penalty. In cases of non-compliance, the concerned officers will be held responsible for the failure to collect the charges.
Under new changes, filers face 15pc property transaction tax and 15pc Capital Gains Tax (CGT), while non-filers are taxed at 45pc for transactions and 15-45pc for CGT, depending on the property value. Advance Property Tax ranges from 3pc (filers) to 20pc (non-filers), based on the property’s value. Non-filer sellers are taxed at a flat 10pc, and 5pc Federal Excise Duty (FED) is applied to property transfers.
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