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February 25, 2021

Tax collection surges 90pc on property transactions

Business

February 25, 2021

KARACHI: Income tax collection from the sale and purchase of immovable properties registered a sharp growth of 90 percent to touch Rs784 million during the first seven months (July–January) of 2020/21, owing to relaxation in restrictions related to coronavirus, sources said on Wednesday.

The income tax collection from the sale and purchase of immovable properties during the corresponding months of the last fiscal year was Rs412 million, the sources at the Regional Tax Office (RTO)-I Karachi said.

The property transactions had witnessed a rise since the start of the current fiscal year, the sources said, adding that the government relaxed the restrictions related to coronavirus pandemic in June 2020.

The second wave of the coronavirus in October last year created some fears of reimposition of lockdown, but the government decided not to impose strict lockdown. Now the infection cases are declining, they added.

The increased momentum was witnessed in the purchase of property during the first seven months of the current fiscal year. The income tax collection from property purchase witnessed 95 percent growth to Rs660 million during the period under review, compared with Rs339 million in the corresponding months of the last fiscal year, the sources said.

The provincial property registrars collect one percent of the transaction value from purchasers under Section 236K of the Income Tax Ordinance, 2001. The registrars collect the income tax on behalf of the Federal Board of Revenue.

A 70 percent growth was seen in the income tax collection from the sale of immovable properties. The collection under this head grew to Rs124 million during the first seven months of the current fiscal year, compared with Rs73 million in the corresponding months of the last fiscal year, the sources said.

The provincial property registrars collect one percent of the consideration from sellers of the immovable property under Section 236C of the Income Tax Ordinance, 2001.