Withholding Tax & Capital Gain Tax on Sale-Purchase of Property

Property investors in Pakistan often need clarification on property taxes. It is especially baffling to get the idea of withholding tax and capital gain tax on the sale and purchase of Property property in the country. Nexthome.pk will elaborate on the facts and information on the property taxes and the real estate properties. Let’s know today how you stand with these taxes.

What are the Property Taxes?

Two types of taxes evolve at the time of the sale and purchase of Property. Many people get confused that Withholding Tax is called Gain Tax. Property buyers need to start understanding that, generally, people do not know what withholding tax is and what gain tax is.

Property Gain Tax

Now people have remembered that taxes are collected in 236K and 236C. However, they do not have an idea about it and then gain tax. What is gain tax? Basically, it is a tax on the gain; you do not pay at the time of sale and purchase, but when you make sales, the difference will be between the purchase value and the sale value after the period of hold. The tax that has to be paid and that tax is according to the years, how many years the holding period, how much gain has been made and the gain that you have to declare; try to pay it in the bank through crossed check so that you can justify it properly.

Difference B/W Withholding and Gain Tax

If you sell a property for profit, this is our gain; then there is a difference between gain tax and withholding tax. What is withholding tax? Withholding tax is adjusted payable. Adjustment is payable against gain tax also. The withheld tax that you have paid at the time of sale is your capital. The gain tax that will be made will be adjusted against it. It is an adjustable tax. Whether it is in millions or crores on purchase, both will be adjusted against your gain.

Property Taxes on Buyers and Purchasers

Those who do frequent business other than builders see builders as a completely different scheme. We will discuss it separately. We will talk about the common taxpayer who buys or sells any property and pays tax at the time of its sale and purchase, and then, when he sells it, the profit he earns on it. If tax is levied, it also has a time period; earlier, it was four years, then it became six years. Hence, it keeps changing. You need to stay updated with this, and before selling or purchasing, consult your legal advisor so that you know exactly.

How much gain tax will you have to pay for Property?

Gain tax is annual, and you will pay it with your return. The amount you pay at the time of sale or purchase is withholding tax. It is based on your property’s worth and sale amount. You need to consult with the legal property advisor to know how much tax you need to pay for Property to be sold.