Guideline For FBR Real Estate Taxes 2019-2020

Here is the Complete information of FBR Real Estate Taxes 2019-2020.

According to FBR Real Estate Taxes 2019-2020:

1.) Who must file income return

• It is mandatory for every company.
• It is mandatory for non-profit organizations.
• Filing income return is mandatory for a partnership which is AOP.
• In the case of buying 500 yards or more property (open plot) or in case of owning the property.
• If you own 200 Marla ft. flat or apartment.
• If you own a car of engine capacity more than 1000CC.
• For those people who have a national tax number (NTN).
• For those people in whose name light commercial or industrial meter concussion is and the meter has a yearly bill of 5 lakh or more.
• Excluding companies, all those people who have a yearly income in the form of a salary greater than 6 lakh rupees and in case of business income of greater than 4 lakh rupees.
• Those Pakistani citizens who may be members of a chamber of commerce and industries, trade or business association, market company or any professional body like Pakistan engineer council, Pakistan medical and dental council, Pakistan bar council or any provincial bar council or chartered accounts of Pakistan, etc.
• There are some other people who are legible for file income return but are not linked to us.

2.) Whose income return files are not required.

According to section (3) 115 income tax ordinance 2001, for the following people income tax return is not mandatory:

• Non-residents/overseas Pakistan.
• Widow
• Handicap people.
• Those orphans who are less than 25 years old.
• Those people who do not have taxable income in Pakistan which means who have less than 4 lakh rupees in the form of business and for those who earn a salary less than 6 lakh rupees.
• For such people, files are not necessary even for buying a 500-yard open plot. (section 114 Pakistan income tax ordinance)

Guidelines:

According to FBR Real Estate Taxes:

• The following people will pay 1% advance tax on buying a property.
• When the above-mentioned people get permission to buy property within 30 days from the commissioner, they will not be given any notice for making files from FBR.
• Keep in mind that if files are not necessary for your clients (as stated above), you will not pay 2% (advance tax) of the client in any case. Otherwise, your client will get the notice to make files from FBR and he will have to get the files made in any case.

3.) For buying property the files must be made in a minimum of 3 months and maximum of 15 months.

4.) A non-filer will have to request the commissioner for the permission online and the commissioner can blame within 30 days and if not such as case, the person can buy the property according to the government and FBR will have no issue.

5.) In the case of the non-filer buying property after the stated time, an advance tax of 1% would be adjustable.

6.) If the non-filer buys a property which had to be filed, and if he doesn’t return tax amount in the given time, the commissioner will send a temporary statement/notice and he will be given time to make files again, and if he still doesn’t pay, 45 days after the notice, considering it the final statement the government can take action against him within 30 days.

7.) If the non-filer pays tax return within 45 days of issuing a temporary statement, considering it the final statement, the temporary one will be discarded, and no action will be taken by the government.

8.) On buying property greater than 50 lakhs, payment will be done by payment cross-check, pay order or demand draft. Otherwise, the cash form of payment will not be accepted. If cash transaction is found, a fine of 5% will be charged.

9.)  Fair market value means FBR notified rates or DC value (more value considered), and payment cross-check, demand draft or pay order will be made according to them. Payment more than this can be made on cash, but it will not be considered a part of the payment of property so in calculating the gain, cash transaction will be subtracted.

10.) The foreign remittances were 10 million American dollars before 1^st July 2019, which were reduced to 5 million since 30 June 2019. Hence on money more than 5 million, you may be asked about your source of income. although there is no restriction on transfer of money more than 5 million.

11.) On buying property, till 1^st July 2019, a filer had to pay value tax of 2% to the FBR, and a non-filer of 4% which has been reduced to 1% and 2% respectively since 30 June 2019. U/S 236-K

12.) Ending section 236-W, you do not have to pay 3% (amnesty tax/deference tax).

13.)Ending section 227-C the non-filer can now buy a property of any cost as before, he could not buy property greater than 50 lakh rupees.

14.) The time span of gain/profit on buying property is increased by 3 years which was 3 years before the budget 2019 and for an open plot, 8 years and 4 years for the constructed property. Similarly, the gain/profit ratio has also been changed as follows.

The tax ratio for unusual property has been applied as follows by 1^st July 2019

Serial #	Gain or profit	Ratio tax
1.	Gain or profit is 50 lakh or less	5%
2.	Gain or profit more than 50 lakh and less than 1 crore rupees	10%
3.	Gain or profit more than 1 crore and less than 1.5 crore rupees	15%
4.	Gain or profit more than 1.5 crore	20%

15.) In the 2019 budget, the gain/profit ratio is presented in a new way based on the holding parade which is as follows:

Serial #	Holding profit of open plot	Gain/profit
1.	In case of an open plot, if the property is sold within one year	A
2.	If sold after one year and within 8 years	A* ¾
3.	If plot sold after 8 years	0

In case of constructed property

Serial #	Holding profit of open plot	Gain/profit
1.	In case of a constructed property, where the time period of ownership is not greater than 1 year.	A
2.	Where constructed property-owning time, the period is greater than 1 year and lesser than 4 years.	A*¾
3.	Where the constructed property-owning time, the period is greater than 4 years.	0

 

Come, let’s understand this formula by an example.

Example:

According to FBR Real Estate Taxes If you bought a plot on 1^st July 2019, and if you sold the plot before 1^st July 2020, so the plot price is subtracted from the sold price and the tax is taken from 100% of the profit/gain which means that if the gain/profit is50 lakh rupee, on 50 lakh rupees you get a 5% tax but if you sell a plot after one year and within 8 years, ¾ of the profit will be taxed which means a profit of 50 lakhs by ¾ will be considered 375,0000/- and you have to pay 1875,000/- tax.

Note: Based on the formula given above, in the profit/gain 1% advance tax is adjustable and 1% advance tax will be returned if you sell the property within 5 years. After 5 years, this 1% advance tax will finish which ends in the first 3 years.

16.) In the 2019 budget proposal, a new tax was introduced by the name of common tax which was a combination of the income tax and capital gain tax, the ratio of which is minimum of 5% and a maximum of 35% which is now removed under the finance act 2019. Income tax and capital gain tax are based on separate ratios.

All information about FBR Real Estate Taxes 2019-2020 is provided above and if you have any query about it then Contact us Now.