The holding time exemption for collecting advance tax on the sale or transfer of immovable property was withdrawn by the Federal Board of Revenue (FBR) on Wednesday, August 10.
Now, regardless of how long the property has been held, the authority will collect advance tax on sales or transfers of real estate.
In this context, the FBR announced the cancellation of Section 236-C’s Subsection (3), which permitted the collection of taxes from immovable property.
The FBR will take income tax on the sale and transfer of all non-movable assets after the revocation exemption period.
In addition, the FBR increased the advance tax rate on the sale or transfer of real estate from 1% to 2% under the Finance Act of 2022.
According to Section 236K of the Income Tax Ordinance of 2001, purchasers and sellers who are not on the list of active taxpayers will henceforth pay taxes at a rate of 250% of the rate specified in Division XVIII of Part IV of the First Schedule.
Additionally, Section 236C will result in a 100% tax increase for those purchasers and sellers who are on the active taxpayer list.
The government had granted purchasers and sellers a four-year exemption period under the previous tax code.
The income tax was not applied to any plot owner who sold their plot before the deadline.
