LAHORE: New tax rates have been implemented for the sale and purchase of property in Punjab as the Punjab Land Record Authority (PLRA) has issued a directive to all revenue officers to enforce the collection of taxes from both buyers and sellers based on the revised tax rates.
The PLRA’s move comes in response to amendments introduced by the Finance Act of 2023, which entail adjustments to the income tax rates and related provisions of sections 236C and 236K of the Income Tax Ordinance 2001.
Under the previous tax regime, individuals involved in property transactions were subjected to tax rates of 2 percent for filers and 4 percent for non-filers, as per section 236C. However, the revised rates now stipulate a tax rate of 3 percent for filers and 6 percent for non-filers on the sales, transfers, and disposals of properties.
Similarly, section 236K, which pertains to property purchases, has also undergone modifications. Previously, filers were required to pay 3 percent in taxes, while non-filers were taxed at a rate of 7 percent. Under the new provisions, the tax rates remain at 3 percent for filers, but non-filers are now subject to a higher tax rate of 10.5 percent for property purchases.
The changes came into effect on July 1, 2023, and are designed to streamline the taxation process associated with property transactions. However, failure to adhere to the revised tax rates and provisions could result in legal consequences, as the Federal Board of Revenue (FBR) is empowered to recover any discrepancies identified through scrutiny from the transferring authorities.
An official of the Board of Revenue Punjab informed this scribe that these adjustments aim to align taxation rates with current economic realities while ensuring that revenue collection remains efficient and equitable.
“These changes underscore the government’s ongoing efforts to enhance revenue generation and ensure a fair taxation system in the real estate sector. The new tax rates will play a pivotal role in shaping property transactions across Punjab and are expected to have a significant impact on the local real estate market,” he said.
first thank you for timely update …. but question is what direction and point are we being pushed too …. poor management and bad planning leads to all this….what is happening now….we pay taxes today with no benefits at all. Soon courts will be seeing millions of applications against any acting govt. in regards to taxation system.
Good step to discourage black money to be parked in real estate sector.
This rise in tax rates is actually punishment to filers. Non filers usually do all business off the record. This increase in tax rates can cause significant drop in real estate business ultimately leading to drop in tax collection
The country is run by land owners and property tycoons
whether these rates apply on gift mutations/ transaction by a real brother in fav3of real brother?
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What is the percentage tax on the land seller?
i purchased zari land 4 year ago i want to sell it now how much tax i have pay please reply
Govt should reduce tax amount to build confidence on people to pay tax regardless of discrimination of filers. As see the example of reducing taxes on licences caused max tax collection and people are encouraged to apply for licences instead of driving without license.
The tax should be on the profits that a seller is making ( capital gain) , and not on the total sale price. eg, if a property was bought for 90 Lakh rupees and then sold for One Crore. The tax should be on the 10 lakh profit ( capital gain). This is particularly important if the property has been used as principal primary residence by the owners.