The advance tax on immovable property has been increased by 100%

The advance tax on immovable property has been increased by 100%

The rate of advance tax on the sale and purchase of real estate has increased by 100%. Through the Finance Act of 2022, the tax rate on real estate transactions has been raised.

 

To clarify significant changes made to the Income Tax Ordinance of 2001 by the Finance Act of 2022, the FBR released Income Tax Circular No. 15 of 2022-23.

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According to the FBR, the advance tax rate on the sale, transfer, and purchase or transfer of property has increased from 1% to 2%.

Change in tax rates under section 236C and 236K

The rates for section 236C and 236K have been amended as under

Previous Rates:-

                Section                  Filer/ATL                              Non-Filer / Non-ATL

                236C                        1%                                                 2%

 

Section                  Filer/ATL                              Non-Filer / Non-ATL

                236K                      1%                                                  2%

 

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 New Rates:-

Advance tax under section 236C on the sale of immovable property has increased by 100%.

                Section                 Filer/ATL                              Non-Filer / Non-ATL

                236C                          2%                                               4%

 

Advance tax on Purchase of immovable property has increased by 100% for filer and 250% for non-filer.

                Section                 Filer/ATL                              Non-Filer / Non-ATL

                236K                          2%                                                7%

Advance tax u/s 236C & 236K for Non-resident  

Advance tax under section 236C & 236K for Non-resident with NICOP or POC are as follows:-

                236C                          2%

                236K                          2%

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Section 236C Removal of time Limitation:

Income tax ordinance Sub-section (3) of Section 236C has now been omitted, hence withholding tax under section 236C shall be paid every seller irrespective of the holding period.

As per Rule 1 of the Tenth Schedule of the Income Tax Ordinance 2001, the tax rates 236C shall be increased by 100% in the case of non-filers, as per FBR's further explain.

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 Increased in advance Tax 236K for Non-Filer:

Advance tax under section 236K shall be increase by 250% in case non-filers As per Rule 1 of the Tenth Schedule of the Income Tax Ordinance 2001, the tax rates 236C shall be increased by 250% in the case of non-filers, as indicate above.

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