Islamabad: The Federal Board of Revenue (FBR) on Thursday (August 12) has updated and issued the Withholding Tax (also known as Advance Tax) rate on sales and purchases of immovable property, according to a news report shared today (Aug 13). The amendments were made by the supreme tax agency in accordance with sections 236C and 236K of the Income Tax Ordinance, 2001.
As per the details, if the seller of an immovable property is tax filer, he will pay Advance Tax at the rate of 1 percent. The tax rate will be increased by 100% i.e. 2% if the property seller doesn’t have his name on the Active Taxpayers List (ATL).
The news source further revealed that the notified tax will be minimum if a property is purchased and sold off within the same year. The tax will otherwise be adjustable. It was further mentioned that the Advance Tax will not be applicable if a property is sold after four years of its purchase.
Similarly, purchasers (tax filers) of property will pay 1% of the transaction made on the basis of its fair market value. For non-filers, the tax rate will be 2%. According to tax experts, the person responsible for collection of payments in instalments shall collect the tax from the purchaser or allottee of the property.
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Advance tax will be applicable on sale if the property is not leased but just a file transfer at builder office.