ISLAMABAD: The government has expanded the scope of withholding tax exemption on the sale of government-allotted immovable properties, by serving and retired armed forces personnel and federal and provincial government employees from July 1, 2024.

This withholding tax exemption would be available on the first sale of immovable properties acquired from or allotted by the federal government or provincial government.

The Federal Board of Revenue (FBR) has amended Section 236C of the Income Tax Ordinance, 2001, through the Finance Act, 2024.

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Sources told Business Recorder that the original exemption was granted in 2016. This exemption was limited to the first sale of immovable properties by dependents of a Shaheed.

Since then, the withholding tax exemption was granted on the first sale of immovable property of dependant of a Shaheed belonging to Pakistan Armed Forces or a person who dies while in the service of the Pakistan Armed Forces or the service of federal or provincial government, in respect of first sale of immovable property acquired from or allotted by the federal government or provincial government or any authority duly certified by the official allotment authority, and the property acquired or allotted is in recognition of or for services rendered by the Shaheed or the person who dies in service.

Now the scope of the said exemption has been expanded under the Finance Act, 2024. Through the Finance Act, 2024, the withholding tax exemption on first sales of immovable properties would be available to war-wounded person while in service of the Pakistan Armed Forces or federal or provincial government or an ex-serviceman and serving personnel of armed forces or ex-employees or serving personnel of federal and provincial government.

The other day while responding to a question at a press conference pertaining to the exemption of withholding tax on property sales for families of deceased military personnel (“Shuhada”) and retired high-ranking bureaucrats (Grade-22), Information Minister Ataullah Tarar explained that the armed forces provide for the families of Shuhada and this tax break offers additional support.

For bureaucrats who dedicated their careers to public service and received a single plot of land upon retirement, the exemption is a form of recognition of their lifetime of service, he had elaborated.

Copyright Business Recorder, 2024