ISLAMABAD: The income tax exemption available to Real Estate Investment Trusts (REITs) schemes has been extended up to June 30, 2024.
Under the Finance Bill 2023, the government has announced an extension of exemption for one-year granted to a person to profits and gains on the sale of immovable property or share of special purpose vehicle to any type of REIT scheme, ie, up to 30th June, 2024. The period of exemption on profits and gains on the sale of immoveable property or shares of Special
Purpose Vehicle to any REIT scheme was due to expire on June 30, 2023. The same is now proposed to be extended to June 30, 2024.
RRMC advocates extending income tax exemption to REITs
Advance tax is collected from the purchaser of immovable property at the rate of 2% of fair market value, which is treated as final tax in respect of certain Pakistani expatriates.
It is now proposed that advance tax would not apply if the buyer or transferee is a non-resident individual holding a Pakistan Origin Card (POC) or National Identify Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) who has acquired the said immovable property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan under the foreign exchange.
It is proposed to allow reduction in tax liability by the lower of 10% or Rs. 5 million, on income from business for tax year 2024 to tax year 2026 to a ‘builder’ from a new building construction subject to certain conditions. A new tax credit is introduced for an individual with regard to construction of a new residential house, subject to following conditions: Available for tax year 2024 through tax year 2026.
The said house is completed during the said tax year and completion certificate is furnished along with return. The amount of tax credit shall be lesser of 10% of tax assessed to the person for the tax year; or one million rupees; and the layout plan is approved by the concerned authority on or after the July 1, 2023.
Copyright Business Recorder, 2023
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