Purchase of immovable properties: Advance tax exemption for expatriates sought
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Loading... - Ashoka Kohli
- 26 Oct 2022
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Talking to Business Recorder, a real estate analyst, Muhammad Ahsan Malik, stated that the advance tax under section 236K of the Income Tax Ordinance 2001 is an adjustable tax. The tax is adjusted at the time of filing of income tax returns. How an overseas Pakistani would adjust this tax if he is non-filer or not required to file income tax returns, he asked. At the same time, the tax on deemed rental income is also a major hindrance in new investments to be made by overseas Pakistanis in the real estate sector. The overseas Pakistanis should only be subjected to section 236C (advance tax on sale/ transfer) of the Income Tax Ordinance 2001, but exempted from the said section 236K.
In order to attract foreign remittances, the withdrawal of the advance tax under section 236K of the Income Tax Ordinance 2001 would be a major step of the government, he said.
The advance tax under section 236K of the Income Tax Ordinance 2001 on the purchase of immovable properties is a major area of concern for overseas Pakistanis. They are reluctant to purchase properties in Pakistan and diverted their investments in other areas abroad. The FBR has already substantially raised the values of immovable properties across the country.
The government policy to declare investment in real estate sector as “non-productive” and doubling of taxes in last budget has serious negative impact on this sector. The real estate sector supports a number of associated industries and sectors which needs to be understood by the government, he said.
He referred to the Punjab government that reduced the rate of stamp duty from 2 percent to one percent on the urban areas due to lacklustre activity in the real estate sector. The Punjab government was forced to reduce the stamp duty from 2 percent to one percent due to the prevailing situation in the real estate sector. The FBR should share figures about the collection of taxes from the real estate sector during first quarter (2022-23) after enforcement of the Finance Act 2022. Read More…
