KARACHI: The Federal Board of Revenue (FBR) has started scrutiny of real estate transactions under one-time tax amnesty to see if they complied with the valuation table, The News reported.
“Any amount paid under the scheme that is higher than the FBR valuation and is not disclosed in annual return by a person will be treated as concealed income,” a senior official at Regional Tax Office (RTO–II) Karachi quoted in the report said.
Sources quoted in the report said the FBR started scrutiny of payment made by purchasers of properties while availing immunity from disclosing source of income. The media report said the FBR had dispatched thousands of cases to tax offices in the country to examine the total amount paid by individuals, who availed the immunity for the purchase of property.
In December 2016, the government introduced a new section of 236W, through Income Tax (Fourth Amendment) Act 2016, under which the buyers were allowed to pay three percent of tax to whiten money for the purchase of properties. However, the concession was available to the invested money in property purchased to the extent of valuation table notified by the FBR.
“In the next phase, the tax offices have started sending notices to the property purchasers to file their annual returns and wealth statements,” the official quoted in the report said. “The tax offices had also started obtaining data from banks of individual buyers to check the actual payment made for the transaction.”
He added that the FBR introduced valuation of properties for various cities in August 2016. The valuation tables were aimed at collecting withholding tax to boost revenue because rates notified by the provincial governments were much lower than the fair market value.
Official statistics showed that the scheme remained applicable between December 12, 2016 and June 30, 2019. An estimated amount of Rs350 billion was whitened on the real estate transactions during the period, while the FBR collected around Rs10.2 billion as taxes.
