ISLAMABAD: The Punjab Federation of Realtors (FOR) has demanded the government withdraw an amendment in the budget relating to taxable gain on disposal of immovable property.
As per the amendment in Section 37 of the Finance Bill 2021, if taxable gain on disposal of immovable property exceeds five million rupees, it shall be chargeable to tax under the normal income tax rates. These rates can go as high as 30 percent.
“This has changed the gain on capital income and brought it under the normal tax regime,” said Muhammad Ahsan Malik, Vice President FOR, speaking to Geo News.
“On the one hand, the government says it is not imposing any new tax and then this happens,” he added.
Malik lamented that Finance Minister Shaukat Tareen did not even mention the real estate sector during his budget speech, adding that the sector has been paying a sizable amount of tax to the government each year.
The amendment also states that for persons habitually engaged in transaction of sale and purchase of immovable property, their income will fall under the business income category.
Malik opposed the move, adding that as per the amendment, the tax rate for this income can go as high as 30 percent. “The least they could have done was define the word habitual,” he said.
When asked how the realtor sector was reacting to the amendment, Malik said people had not properly read through the budget document. However, he said the move would have an adverse impact on the sector and as a result, on the economy, once people get to know about the amendment.
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