Withholding tax (wht) - ---- credit fbr
Wht threshold
The government / fbr has increased the withholding tax threshold. According to new taxes, withholding tax (wht) will be applicable on properties worth 4 million rupees or more.
Wht for sellers of immovable property:-
-1% wht on sale of property for filers
-2% wht on sale of property for non-filers
-0% wht on sale of properties after 5 years of purchase
Wht for buyers of immovable property:-
-2% wht on purchase of property for filers
-4% wht on purchase of property for non-filers
Capital gain tax (cgt)
Cgt on property transactions before i july 2016
For past transactions, 5% cgt is applicable on all properties purchased before 1 july 2016 and sold out within 3 years.
Cgt on property transactions after 1 july 2016:-
-10% cgt on sale of properties within 1 year of purchase
-7.5% cgt on sale of properties within 2 years of purchase
-5% cgt on sale of properties within 3 years of purchase
-0% cgt on sale of properties after 3 years of holding period
-0% cgt to be paid by the relatives who were issued plots of the martyrs / shuhadas
-50% tax relaxation for the government employees
Cgt calculator
Profit on sale of immovable property = capital gain
Capital gain = price of property at the time of sale – price of property at the time of purchase
Capital gain on property sold for 100 lac with purchase value 20 lac (purchase value as per dc rates & sold value as per fbr or new rates)
-capital gain = 100-20 = 80 lac profit
-tax on property profit = capital gain tax = cgt
According to new cgt calculations | on profit of 80 lac:-
-10% cgt on sale of property within 1 year of purchase = 8 lac
-7.5% cgt on sale of property within 2 year of purchase = 6 lac
-5% cgt on sale of property within 3 year of purchase = 4 lac
-0% cgt on sale of property after year of purchase = 0
(property price is not what the market value is but the price determined by fbr. At the moment fbr will start taxing real estate transactions according to 35-50% of the fair value of property – but in future like 3-4 years time, all taxes will be collected according to the original value of the property aka fair market value or the price on which property is being sold)
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