Law to whiten black money of property imposed

ISLAMABAD: President Mamnoon Hussain has signed the Income Tax Amendment Bill 2016 and now this bill has become an Act and formally imposed across the country. Through this new Act, the buyers can convert black money of their immovable property into white money by paying three percent additional tax.

Before becoming an Act, this bill was approved by the National Assembly and was sent to the president for signing. The buyers of the property will have to pay three percent of the difference between the rate of the Federal Board of Revenue (FBR) and DC’s rate, and the FBR will not ask about the source of their income.  The government will also benefit as the buyers will become a filer. The FBR will get three percent tax from the realty sector.

The amendment removes a gap between the basic rates at which most of the registries are signed at the deputy commissioner’s office (called DC Rates) and the valuation by the FBR determining the price of the property.  On the filer investor, two percent has been imposed by the government while the non-filer investor will have to pay to four percent tax on purchasing or selling any property.

A capital gain of five percent has been imposed on the sale of immovable property within three years; however, there will be no capital gain tax after three years. Legal heirs of the martyrs of armed forces, Levies force and police are exempted from the withholding tax.