{"id":70112,"date":"2020-09-04T16:51:39","date_gmt":"2020-09-04T11:51:39","guid":{"rendered":"https:\/\/www.zameen.com\/news\/?p=70112"},"modified":"2020-09-04T16:51:41","modified_gmt":"2020-09-04T11:51:41","slug":"fbr-issues-circular-changes-cgt-properties","status":"publish","type":"post","link":"https:\/\/www.zameen.com\/news\/fbr-issues-circular-changes-cgt-properties.html","title":{"rendered":"FBR issues circular on changes introduced to CGT on immovable properties"},"content":{"rendered":"\n

Islamabad: The Federal Board of Revenue (FBR) has issued a circular detailing the changes introduced to the Capital Gains Tax (CGT) on immovable properties through the Finance Act 2020 \u2014 a news source reported on September 4. The act made a number of changes to the Income Tax Ordinance 2001 in order to change the mechanism for the collection of CGT.<\/p>\n\n\n\n

Read: Govt urged to reduce CGT rate<\/a><\/p>\n\n\n\n

According to the details available, the Income Tax Circular 3 of 2020 notes that the holding period and tax rate on CGT has been reduced on the disposal of immovable property. Particularly, amendments have been made in Section 37 of the ordinance.<\/p>\n\n\n\n

  1. The difference between plots and constructed property has been eliminated.<\/li>
  2. The holding period for application of CGT has been reduced to 4 years<\/li>
  3. The rate of taxation on capital gains in relation to the holding period has also been changed. This can be broken down as follows:<\/li>
  4. 100% of capital gains to be taxed when the holding period is less than 1 year<\/li>
  5. 75% of the capital gains when the holding period exceeds 1 year but is less than 2 years<\/li>
  6. 50% of the capital gains when the holding period exceeds 2 years but not 3 years<\/li>
  7. 25% of the capital gains when the holding period exceeds 3 years but not 4 years<\/li>
  8. No CGT after 4 years of holding period<\/li>
  9. The rate of CGT on amount of annual gains through disposal of immovable property has also been reduced by half and can be broken down as follows:<\/li><\/ol>\n\n\n\n

    Read: Construction sector gets \u2018historic\u2019 relief package; CGT, source of income conditions revoked<\/a><\/p>\n\n\n\n

    Annual Gains in PKR<\/strong><\/td>Rate of Tax on Value of Property Before Finance Act 2020<\/strong><\/td>Rate of Tax on Value of Property After Finance Act 2020<\/strong><\/td><\/tr>
    Gains less than 5 million<\/td>5%<\/td>2.5%<\/td><\/tr>
    Gains higher than 5 million but lower than 10 million<\/td>10%<\/td>5%<\/td><\/tr>
    Gains higher than 10 million but lower than 15 million<\/td>15%<\/td>7.5%<\/td><\/tr>
    Gains more than 15 million<\/td>20%<\/td>10%<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"

    Islamabad: The Federal Board of Revenue (FBR) has issued a circular detailing the changes introduced to the Capital Gains Tax (CGT) on immovable properties through the Finance Act 2020 \u2014 a news source reported on September 4. The act made a number of changes to the Income Tax Ordinance 2001 in order to change the mechanism for the collection of CGT. Read: Govt urged to reduce CGT rate According to the details available, the Income Tax Circular 3 of 2020 notes that the holding period and tax rate on CGT has been reduced on the disposal of immovable property. Particularly, amendments have been made in Section 37 of the ordinance. The difference between plots and constructed property has been eliminated. The holding period for application of CGT has been reduced to 4 years The rate of taxation on capital gains in relation to the holding period has also been changed. This can be broken down as follows: 100% of capital gains to be taxed when the holding period is less than 1 year 75% of the capital gains when the holding period exceeds 1 year but is less than 2 years 50% of the capital gains when the holding period…<\/p>\n","protected":false},"author":57,"featured_media":61403,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15015],"tags":[38642,38644,19230],"persona":[],"class_list":{"0":"post-70112","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-legal-taxation","8":"tag-capital-gains-tax-on-immovable-property","9":"tag-fbr-issues-circular-on-changes-introduced-to-cgt-on-immovable-properties","10":"tag-federal-board-of-revenue-fbr","11":"cat-15015-id"},"acf":[],"yoast_head":"\nFBR issues circular on changes to CGT on properties - Zameen News<\/title>\n<meta name=\"description\" content=\"Islamabad: The Federal Board of Revenue (FBR) has issued a circular detailing the changes introduced to the Capital Gains Tax (CGT) on immovable properties through the Finance Act 2020 \u2014 a news source reported on September 4.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zameen.com\/news\/fbr-issues-circular-changes-cgt-properties.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FBR issues circular on changes to CGT on properties - 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