Islamabad: The Federal Board of Revenue (FBR) has announced its decision to implement the tax relief measures announced in Finance Bill 2020 from today onward; marking the start of (Fiscal Year) FY2020-21, according to news sources.
The National Assembly approved the bill on Monday (June 29), while President Dr Arif Alvi promulgated Finance Bill 2020 on the same day. As per the rules, the FBR issues custom notifications after the president signs the bill.
From today onwards, the changes specified in Finance Bill 2020 for FY2020-21 regarding new tax rates, revised taxes, tax relief measures, implementation of documentation measures, rationalisation in custom duties, and revision in tax laws will go in effect today.
The salient features of Finance Bill 2020 includes:
Properties’ holding period for the purpose of Capital Gains Tax (CGT) imposition has been reduced to 4 years
CGT percentage on immovable property reduced to 7.5% if sold within two years of purchase, 50% in case a unit is sold within three years, 2.5% if sold within four years of purchase and 0% if sold after four years
No bifurcation of plots and constructed property for determining holding period for the purpose of CGT collection
Minimum purchase threshold for obtaining CNICs of buyers increased to PKR 100,000
Additional custom duty (ADC) on 1,640 items abolished; ADC reduced to 3% for 90 items
Sales tax on big retailers reduced to 12%
Cash withdrawal of foreign remittances exempted from withholding tax
Federal Excise Duty on cement reduced to PKR 1.5 per kg, whereas the duty proposed in Budget 2020-21 was PKR 1.75 per kg.
Income tax rate for engineering services reduced to 3%
Income generated from real estate investment trust between 2020 and 2023 exempted from income tax payments
Extension till 2023 in tax exemption of custom duties on imports for setting up industries in the districts of Khyber Pakhtunkhwa
