Islamabad: The Federal Board of Revenue (FBR) has informed provincial boards of revenue that new rates of advance tax on immovable properties will be applicable from July 1 across the country, according to news stories published in national dailies on July 25.
As per the FBR notification, the new rate of advance tax on the sale, purchase, and transfer of immovable property has been increased from 1% to 2%. The FBR has informed the boards of revenue and Capital Development Authority (CDA) in writing about the implementation of changes made in the Income Tax Ordinance 2001, through the Finance Act 2022.
Reportedly, the changes were made to sections 236C and 236K of the ordinance. It was also notified that sub-section (3) of section 236C has been omitted. The advance tax on immovable properties will be collected under this section regardless of the holding period. Moreover, for the buyer of an immovable property who does not appear on the active taxpayers’ list, the rate of tax will increase by 250% of the rate specified in Division XVIII of Part IV of the First Schedule. For non-filers, the tax rate for 236C will be increased by 100% as per the Rule-1 of Tenth Schedule of Income Tax Ordinance 2001.
The FBR has requested the provincial boards of revenue to make sure the said changes are strictly followed by all the property registration authorities for correct collection and deposit of withholding taxes.