Taxation of Builders and Developers.
There is a complete package covering tax impact from all aspects. Taxpayer is eligible to take the immunity for the same has to be made by June 30, 2021 previously it was December 31, 2020. Benefits to builders and developers as per section 100D of Income Tax Ordinance are as under:
Fixed Tax Regime
A scheduler based fixed tax regime for builders and developers, which can be opted for eligible projects being either new or existing incomplete projects.
No need to disclose source of investment
The tax authorities are not permitted to require any explanation regarding the nature and source of capital investments in new projects by investors and to the first purchasers of building including units therein in new and existing incomplete projects and for plot purchasers.
“Tax amnesty scheme for builders and developers ending at December 31 2020“: ALSO READ
Amount of profits
Facility for builders and developers to incorporate their profits and gains in books of accounts up to ten times the amount of fixed tax paid under the regime on eligible projects.
Exemption from tax on Dividend
Exemption from tax on Dividend distributed by Corporate builder or developer out of the profits and gains of eligible projects, with specific exemption from tax withholding on such distribution.
Exempted from withholding tax under section 153
Builders and developers exempted from withholding tax under section 153 of the Ordinance on purchase of materials (except steel and cement) and services (plumbing, electrification, shuttering and other similar and allied services) provided by non-corporate service providers.
“Tax measures & reliefs in response to COVID-19 in 2020 by Pakistan” ALSO READ
Tax Rates for Builders, Developers,
| Area in | Karachi, Lahore and Islamabad | Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbotabad, Quetta | Urban Areas not specified in column (2) and (3) |
|---|---|---|---|
| 1 | 2 | 3 | 4 |
| Tax on Builders – For Commercial Buildings | |||
| Any size | Rs. 250 per sq. ft. | Rs. 230 per sq. ft. | Rs. 210 per sq. ft |
| Tax on Builders – For Residential Buildings | |||
| Up to 3,000 sq. ft. | Rs 80 per sq. ft. | Rs 65 per sq. ft. | Rs 50 per sq. ft. |
| 3,000 sq. ft. and above | Rs 125 per sq. ft. | Rs 110 per sq. ft. | Rs 100 per sq. ft. |
| Tax on Developers (Entire Project) | |||
| Any size | Rs 150 per sq. yd. | Rs 130 per sq. yd. | Rs 100 per sq. yd. |
| For Development of Industrial Area | |||
| Any size | Rs 20 per sq. yd. | Rs 20 per sq. yd. | Rs 10 per sq. yd. |
Source | BUILDERS | DEVELOPERS | TAXATION | FIXED TAX REGIME | FBR |
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