Islamabad: The Federal Board of Revenue (FBR) has been empowered to enquire about the source of investment in real estate; should there exist a disparity between FBR tables and open market rates, a news source reported.
According to an FBR official, the Directorate General of Immoveable Property (DG IMP) was established last year to strengthen taxation on real estate. The directorate has only recently begun its work.
The primary purpose of DG IMP is to curb the undervaluation of property. Wherever a discrepancy is found between FBR-assigned values and market prices, the directorate can now enquire about the source of income for the purchase of property.
The new FBR valuation tables for 20 cities came into effect early this month. Their listed rates show an increase of around 20% from those detailed in the previous tables. However, the official said that these rates still fall below the open market rates.
With the launch of DG IMP, the term of the amnesty scheme launched three years ago has also come to an end. In 2016, Section 236W was added to Income Tax Ordinance 2001 for providing legal cover to the amnesty provision. Under the section, investment up to the FBR’s valuation of property could be legalised after the payment of 3% additional tax.
The basic purpose of the scheme was to encourage a detailed documentation of the economy. A sum of PKR 223 billion in property transactions was whitened under the scheme during the period from December 2, 2016 to June 30, 2018.
