I would really appreciate if the experts can breakdown the total taxes that now are applicable as i understand there are some changes - i am an overseas pakistani and am planning to send money to pakistan in my father's name so that he can purchase a plot. I understand that there is some amount loss after conversion of currency etc, but from the point that the rupees are in his account, he would undertake the following:
1. Identify the plot to be purchased (let's say for this discussion that it's a dha 2 commoner's plot).
2. Make out a pay order from his bank for the buyer assuming that the agent does the middle steps.
3. Pay the agent fee, and the pay order to the buyer, and get the plot allotted in his name.
4. Perhaps couple of years down the road, he will sell the plot, deposite the money in his rupee account and then transfer the money abroad (or keep with him in the rupee account).
Question: on each step, can someone please let me know whether any money for taxes and other levies come into the play as they would surely count against the profit from such an investment. Are there fees even on withdrawing money from banks as i read that there's 1% tax levy etc. I think this is a very important matter that affects almost all expats and detailed info is needed on this.
Can someone please answer this or provide further info? If there is no such tax or levies that you are aware of, and you have done a transaction, please also share. Thanks for helping a first-timer…
The withholding tax on cash withdrawal is 0.05%. When buying plot one has to pay a withholding tax only if the plot price or should I say the "declared price" :D of the plot is Rs 30 lakhs or above. If price is above 30 lakhs, then withholding tax will be paid @2% of price by non tax filers and 1% of price by tax filers.
On selling you will have to pay withholding tax regardless of price. It is @1% for non return filers and 0.5% for filers.
In addition you will have to pay dealer commission which is 1% of price along with transfer charges to paid to DHA.
If you are selling after 2 years then good luck, coz if the present govt continues they might have increased the rates to 5% by then...