Islamabad June 28 2024: Pakistan imposed tax on income of individuals involved in construction, development and sale of plots or buildings, according to amendments made in Finance Bill 2024.
“Portion of Gross receipts shall be treated as taxable income for every person deriving income from the business of Construction and sale of residential, commercial or other buildings; development and sale of residential commercial or other plots” states the amendments.
Taxable profit shall be 10 percent of gross receipts for person derving income from construction and sale of residential, commerical or other buildings, whereas it will be 15 percent for development and sale of residential commericial or other buildings. Moreover, 12 percent of gross receipts shall be treated as taxable income if the person is involved in both construction and development of realestate.
These person shall also be liable to Super tax of 10 percent if their income is more than PKR 10 million, which is in addtion to normal tax ranging from 6.5 percent to 40 percent.
For the removal of doubt, it is clarified that the provisions of this section shall only apply in respect of income accruing from gross receipts from activities specified in sub-section (1) and shall not be applicable to income or incomes from any other source or under any head of income.
Where a taxpayer, while explaining the nature and source of the amount credited or the investment made, money or valuable article owned or the funds from which the expenditure was made, takes into account any source of income which is subject to tax under this section, the taxpayer shall not be allowed to take credit of any sum as is in excess of taxable profit.
Provided that where taxable income under section 9 is more than the taxable profit under this section, taxpayer shall be entitled to take credit of such taxable income subject to the payment of tax at the rate specified in Division I or II of Part I of First Schedule.
This section shall not apply to a builder or developer established by an Act of the Parliament or a Provincial Assembly or by a Presidential Order and who is engaged in activities for the benefit of its employees or otherwise including activities for the planning and development of and for providing and regulating housing and ancillary facilities in a specified or notified area.
