FBR Enforces New Verification Form Mandatory For Property Sellers Under Section 236C (2A)
Federal Board Revenue (FBR) again strikes out with a new regulation on property. A FBR Enforces New Verification Form Mandatory For Property Sellers Under Section 236C (2A). This new rule restricts property sellers to submit a verification form to the registering authority before any transfer of immovable property can happen. This form contains crucial information about the property, the seller, and tax-related aspects of the transaction.
Verification Form Details
The new verification form includes key details like the seller’s name, address, and either the National Tax Number (NTN) or Computerized National Identity Card (CNIC). It also covers information about the property, such as its type (plot for sale , apartment for sale, or constructed premises), its location, the province it lies in. Moreover, information as well as the district and tehsil or town will also be in the form entries.
Instructions For Seller On the Form
The seller is required to declare the amount subject to Section 7E, the fair market value of the property as stated in their income tax return in the form. The property seller will also have to mention the tax amount paid under Section 7E for that specific property. The Commissioner Inland Revenue will review and confirm. Whether the taxpayer has properly followed the rules of Section 7E for the relevant tax year. Or if they are exempt from this rule.
Note For Property Transferee
Section 236C of the Income Tax Ordinance 2001 designates the entity responsible for registering, recording, or confirming the transfer of immovable property as the “transferring authority.” This authority is now tasked with collecting advance adjustable income tax from the seller or transferor.
The tax rate for this collection is 3% of the total consideration received by the property seller or transferor, provided they are listed as Active Taxpayers. If they are not on this list, the tax rate rises to 6%. Same applies to house for sale.
Background of Section 7E
Section 7E was introduce through the Finance Act 2022. Its purpose is to treat every resident person. As having earned income equal to 5% of the fair market value. Of the capital asset within Pakistan with some exceptions. The tax rate for this estimated income is 20%, effectively making up 1% of the fair market value of the immovable property.
Nexthome.pk is here to assist you in filling and filing the FBR new verification law. To get assist, explore our property blogs, or dial 0304-111-0309. Our professional team of property consultants will help you understand the property tax and laws. Moreover, we also provide you consultancy to the most ROI-potential the real estate projects for investment.