Federal Board of Revenue presented the proposal for an increment of advance tax on the sale and purchase of property for approval. However, FBR’s tax increase proposal was turned down by the Senate Standing Committee on 15 June 2022. FBR proposed to increase the advance tax on sale and purchase of property from 1% to 2% for filers, as presented in the annual budget 2022-2023.
However, the standing committee of senate has approved the tax increment for non-filers. The sale, purchase, and land acquisition tax have been increased from 2% to 5% for non-filers. Moreover, the committee requested the concerned authorities to revise the annual budget for the real estate sector. Senate Committee suggested the government provide a 1% levy in terms of income tax for a plot worth more than 25 million after 5 years of transfer without development.
To put it simply, a plot that’s not been developed in 5 years should not be charged. The Senate standing committee also suggested revision and changes to the Capital Gains Tax on holding time. Holding period of plots should be shortened to 5 years from 6 years and the previous CGT should be restored. Keep in mind, that before the final implementation of FBR’s tax increase proposal, the tax proposals need to be approved by Senate.
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