The Department of Excise & Taxation, a body very active these days, has offered a discount package to taxpayers. According to a public notice rolled out by the department in newspapers, taxpayers will get a 5 percent discount for paying off their property tax by September 30, if it’s paid in lump sum.
According to department officials, tax challan forms have been sent to the taxpayers. Those who have not received them should contact the department.
How much tax do you need to pay?
To get details on property tax calculation, we contacted the Excise & Taxation Department and learned that property tax is calculated according to the following formula:
Annual rental value of property x 5% = Property Tax
Property is assessed according to the nature of building as well as the type of occupation, per the official website of the department.
After being served with the Demand Notice and the challan form, you have 30 days to make the payment. The tax must be deposited to the State Bank or any specified branches of National Bank.
In case you delay the payment, you will have to pay a 1 percent surcharge on gross tax payable and the surcharge will be imposed on the first day of every month of delay, according to the department’s official website.
The department provides exemptions in the following cases:
- Property which does not yield an annual rent of more than PKR 4,320
- A house occupied by the owner which does not yield more than PKR 6,480 annual rent
- Buildings owned by widows, minor orphans, or the disabled for which tax liability is up to PKR 12,150 per annum
- One house spread over a maximum of 1 kanal which is owned and occupied by a federal or provincial retired government servant
- Buildings owned by the government or local authorities including corporations, municipalities, or town committees
- Masajid and other religious buildings
- Public buildings and land used for parks, playgrounds, schools, boarding, hostels, libraries, hospitals, and other similar purposes
- Properties that donate rents to religious and other public charitable causes
The Punjab Excise and Taxation Department is aiming to collect 40 percent property tax from the fiscal target of PKR 8.6 billion by September 30, including the five percent rebate tax. In the past, the average collection rate was 25-30 percent with rebate.
Currently, the department in issuing computerised challan forms and delivering them in a timely manner in six districts of Lahore, Faisalabad, Rawalpindi, Multan, Gujranwala, and Sialkot. The computerised challans will prevent inspectors from making changes and misusing their authority.
The 40 percent target of PKR 3.5 billion is to be achieved by the end of September and a 1 percent surcharge will be charged to tax defaulters by October 1 through the issuance of new notices.
According to previous statistics, 45 percent of taxpayers availed the three-month five percent rebate annually, 26 percent paid tax with a surcharge, and the remaining were regular defaulters against whom strict action, such as the sealing of property and halting of rent payments, was taken.
Citizens are encouraged to contact their Excise & Taxation officer if they have not received challan notices or if they have any concerns.