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New Taxes on Property,

(102141)
   MALIK28®
Sunday, June 5, 2016 04:59 AM 
Reply: >
Dear CMY
Please educate us on the imposition of tax in the budget spec Capital Gain Tax (CGT) and its effects on seller as well as purchaser.
Best regards
Maqsood replied on Sunday, June 5, 2016 05:25 AM 

I also want to learn about this although CMY sb has already explained this.
Let me give an example and please correct me if I am wrong.
Today I bought a 1 kanal plot in DHA Lahore worth 10 million rupees. However DC rate for that plot in today's date is 4 million rupees. If I'll sell this plot after 5 June 2021, there will no CGT. However if I'll sell this plot on 5 June 2020, say real plot price is 20 million rupees. I have to check for DC rate for that date. Say its 4.6 million rupees. I'll pay 10 percent of 0.6 million (4.6 mil -4.0 mil) which is 60,000 rupees.
If its true, then keeping in view that DC rates are normally much lower than actual market price, one wont pay very high CGT.
Salman replied on Sunday, June 5, 2016 05:31 AM 

What is the current Capital Gains tax rate?

Is it not already 10%?
Sachaadmi replied on Sunday, June 5, 2016 05:37 AM 

Logic of CGT is very simple , don't sell PLOT before 5 years if so then pay 10% of DC value.
For example: 1 kanal PLOT in Phase 8, DC rate is 33 lacs so we have to pay CGT = 3 lacs and 30 thousand if u wanna sale PLOT before 5 years.
Maqsood replied on Sunday, June 5, 2016 05:41 AM 

@Sachaadmi...I dont think this tax is on absolute price but on the difference aka "Capital Gain".
CGT formula is (Selling DC rate - Buying DC rate)*0.1
Boy® replied on Sunday, June 5, 2016 05:54 AM 

Maqsood you explained it totally right !
MNQ replied on Sunday, June 5, 2016 06:47 AM 

what about the file and non filer tax percentage that has been doubled
SIM replied on Sunday, June 5, 2016 06:54 AM 

How can overseas Pakistanis avoid this non filer tax? Has there been a withholding tax on property and rentals also?
tahir replied on Sunday, June 5, 2016 07:02 AM 

I think DC rates are value of property announced by Govt. So there is no selling and buying DC rates

So 10 % flat tax on DC rates will be deducted

I think after 30 June this should be 4 lac flat on selling of one kanal prism plot
Irfan UAE® replied on Sunday, June 5, 2016 07:15 AM 

What is this DC rate, please some one can explain?
Maqsood replied on Sunday, June 5, 2016 07:55 AM 

@tahir Let me make this easier for you.
"Gain" means profit. It means no profit no tax. It is a tax on profit only. Simple!
CGT = (DC rate on selling date - DC rate on buying date)*0.1
Can't make it easier than this.
User_P1876® replied on Sunday, June 5, 2016 08:17 AM 

Maqsood is absolutely correct.

Other ones Guys , please do not confuse a very simple thing - which is capital gain Tax , its only on Gain/Profit , not on actual value
kashif replied on Sunday, June 5, 2016 09:52 AM 

The problem is if you are selling at DC value then you will not be able to justify the actual selling price and DC value difference.

Your plot selling DC Value:40
Actual selling price: 100

How you will justify the remaining 60? Now FBR has started tracking thru bank channels. Will you take the risk of cash???
IM786® replied on Sunday, June 5, 2016 04:04 PM 

Yes Kashif sb. This is the big problem. In that case 60 lac will be black money. Also buyer and seller both have to agree to show less value. Also Maqsood sb you said nothing is changed. Dear taxes has been doibled as mentioned by you.
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