ISLMABAD: The government has introduced changes to Section 114C of the Income Tax Act through the Finance Bill amendment, making it mandatory for buyers to obtain an eligibility certificate from the Federal Board of Revenue (FBR) before purchasing vehicles, property, or other high-value assets.
Under the new rules, buyers must register their details on the FBR website and get their purchases ratified. However, no certificate will be required for vehicles costing up to Rs 7 million. Similarly, properties worth up to Rs 5 crore and commercial plots up to Rs 10 crore will also be exempt from the requirement. Purchases exceeding these limits will need FBR approval.
Additionally, from July 1, the withholding tax on property sales will increase by 1.5%. For properties sold for up to Rs 50 million, the tax will rise from 3% to 4.5%. Sales between Rs 50 million and Rs 100 million will be taxed at 5%, while properties sold for over Rs 100 million will face a 5.5% withholding tax.
On the other hand, the withholding tax on property purchases has been reduced by 1.5% in the new Finance Bill, providing some relief to buyers. These changes aim to streamline tax compliance and increase revenue collection from high-value transactions.
