ISLAMABAD: The Federal Board of Revenue (FBR) is currently examining significant taxation proposals aimed at documenting non-filer transactions in the real estate sector and implementing effective taxation measures for immovable properties through the Finance Bill 2023.
These proposals, if approved, would introduce amendments to the Income Tax Ordinance 2001 starting from July 1, 2023.
According to sources, the FBR has received several major budget proposals with a revenue impact of over Rs. 150 billion.
The proposed amendments include eliminating the concessional regime for capital gains, taxing short-term gains along with cost indexation for long-term gains
Moreover, the proposal also includes, introducing deemed rental income and deemed ground rent at a rate of 5% of Fair Market Value (FMV), extending the scope of advance tax on property transactions, increasing the tax rate for non-filers, imposing income tax on gifts from non-relatives,
Besides, the recommendations, if approved, would grant the FBR the authority to determine minimum FMV for construction purposes, and propose a minimum tax on developers and builders based on per sq ft basis during development/construction.
The details suggest that the FBR is carefully considering these proposals, and a final decision is awaited from the government.
Source: Business Recorder
