After much hue & cry from the property dealers associations across the country, the government came up with a blanket tax amnesty scheme in order to prop up the weakened property market. Since the new tax laws and revision of DC rates, there had been least sale purchase activity in the market due to 2 major issues.
1- Involvement of FBR in all property transactions with right to ask source of income
2- increment of advance taxes and capital gain tax for all property transfers
The first part is said to have damaged the property market severely as many big fishes want to keep away from the tentacles of FBR. So, major investment inflows stopped which literally withered the real estate sector of Pakistan.
As per the new tax amnesty scheme, FBR won't be entitled to probe into the source of income. However, if there is a difference in purchase value of a property and the value set by FBR or the DC rate, the buyer will need to pay 3% tax on the differential amount and the property can be delcared at DC rates in the books without having to show any source of income.
More details on the tax amnesty scheme are discussed in the following video:
This blog post was created on Saturday, December 17th, 2016 and Filed Under Tags: Advance Tax on Property Transactions in Pakistan, Property Tax, Property Tax Amnesty Scheme 2016