The FBR and the New Pakistan Housing Development Authority have once again assured the public and investors interest in the construction industry. Construction package announced by the Prime Minister for builders and developers had made a significant progress. ۔
Changes in tax laws
The package came into force under Section 100D of the Income Tax Ordinance 2001 and the Eleventh Schedule Amendment under the Tax Laws Amendment Ordinance 2020.
Applicable to land builders, developers & new/existing industrial / development projects
Construction package is applicable to land builders and developers and covers both new and existing industrial and development projects. Builders and developers can get tax benefits on residential and commercial construction. These benefits also accrue to individuals, associations of individuals and companies.
90% Tax Relief on low cost housing projects
Under this package, fixed tax rate will be applicable for builders and developers per square foot and square yards. Under this package, in case of low cost housing projects, tax will be reduced by 90%. For the convenience of the shareholders of the companies, no tax will be levied on the profits. Under this package, significant withholding tax exemption has also been given.
There will be no questioning of investment income on fulfillment of conditions for builders and developers and property buyers to promote investment.
Conditions to apply for construction package
There is a very simple way to benefit from this package. Builders and developers must register on FBR’s Iris software by December 31, 2020. Builders and developers will have to ensure completion of the project by September 30, 2022. Registration will require bank account, ownership documents and approved plan details.
The FBR system is also facilitating temporary registration while the project plan is in the process of approval. Online support is being provided to facilitate builders, developers and buyers. Featured banners and web pages have been created on the FBR website. Specific e-mail addresses are provided for answers to questions and complete registration guidelines are uploaded.
Progress of the construction package
So far, 57 frequently asked questions have been answered and uploaded. The construction package has been widely advertised in newspapers and electronic media and several webinar sessions have been organized in collaboration with the FBR and the New Pakistan Housing Development Authority.
Seminars have been organized with the Association of Builders, Developers and Real Estate Agents. So far 348 people have registered 389 projects with a total value of Rs 157 billion.
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