ISLAMABAD: The government has announced progressive tax rates on purchases and sales of properties, categorised into three categories: filers, late-filers, and non-filers.
According to the Finance Bill 2024, on purchase of property by filers, the rates of tax would be 3% for values of properties up to Rs50 million, 3.5% for values of properties between Rs50 million and Rs100 million, and 4% for value of properties above Rs100 million.
Late-filers would face slightly higher rates: 6%, 7%, and 8%, respectively for the same property value brackets. Non-filers would experience significantly higher rates, set at 12% for properties up to Rs50 million, 16% for Rs50-100 million, and 20% for properties exceeding Rs100 million.
The proposed progressive advance tax rates at source for filers on sale of immovable property are 3% for properties valued up to Rs50 million. For properties valued between Rs50 million and Rs100 million, the withholding tax rate is 4%, and for properties valued above Rs100 million, the rate is 5%. For non-filers, the rate is 10% for properties of any value. Further, for late filers, the rate of tax will be 6%, 7% and 8%, respectively depending on the value of property.
Finance Bill 2024 further revealed that a flat 15% rate of tax on gains from the disposal of immovable property acquired on or after July 1, 2024 by filers regardless of the holding period is proposed, and for non-filers, progressive tax rates based on the prescribed slab rates in Division I of Part I of the First Schedule, with a minimum tax rate of 15% is proposed.
At present, capital gains on sale of securities is taxed on the basis of holding period with maximum rate at 15% and no tax if the holding period exceeds 06 years. Now, for the securities acquired on or after July 1, 2024, the capital gain on sale of such securities will be taxed at flat rate of 15% for filers, and for non-filers, the gain will be taxed at normal rates with minimum rate of 15% and maximum rate of 45%.
Further capital gains income from mutual funds and collective investment schemes is also enhanced from 10% to 15%.
Dividend income from mutual funds is taxed @ 15% at present. However, in order to reduce the arbitrage between individual persons deriving income from profit on debt and persons earning dividend income from mutual funds deriving income from profit on debt, it is proposed that rate of dividend derived from a mutual fund which earns 50% or more of its income from profit on debt be enhanced from 15% to 25 percent, Finance Bill added.
Copyright Business Recorder, 2024