Tax treatment of immovable properties for July 2016 as per old law
ISLAMABAD: A presidential order has amended income tax laws related to transaction of immovable properties with effect from July 31. While the amendment made through Finance Act, 2016 will not be applicable to Section 68 of Income Tax Ordinance, 2001.
According to the Finance Act, 2016 an amendment was introduced under which approved valuers of State Bank of Pakistan (SBP) would determine fair market value of immovable property effective from July 01, 2016.
However, this has been down away with promulgation of the ordinance on July 31 and Federal Board of Revenue has been allowed to determine fair market value.
According to the ordinance: “the Board may, from time to time, by notification in the official Gazette, determine the fair market value of immovable property of the area or areas as may be specified in the notification.”
Tax experts said that since rules for SBP approved valuers were not notified therefore old law as before July 01, 2016 would prevail for the valuation and calculation of capital gain tax.