Through an SRO, the FBR here on Friday circulated the draft of the mode and manner for collection of tax under sections 7C and 7D from builders and developers through proposed amendments to the Income Tax Rules, 2002. The draft has been circulated for comments of the stakeholders.
The proposed rules would provide for the mode and manner for collection of tax under sections 7C and 7D from builders and developers, the functions and responsibilities of the authorities approving, suspending and cancelling No Objection Certificates (NOC) to sell and the matters connected and ancillary thereto.
Under the draft rules, every builder after obtaining approval of a building plan or of a revised building plan from the authority and NOC to sell, shall furnish on line a copy of building plan and evidence of partial payment of five percent tax to the Chief Commissioner along with computation of final tax liability on the basis of covered area as per rates provided in Division VIIIA of the First Schedule to the Ordinance.
The Chief Commissioner shall, after being satisfied that the rates are applied correctly and after making such inquiry as he thinks fit, shall online issue a schedule of advance tax instalments to be paid by the builder.
Every builder after obtaining approval of a building plan or of a revised building plan from the authority and NOC to sell, shall furnish on line a copy of building plan and evidence of partial payment of five percent tax to the Chief Commissioner along with computation of final tax liability on the basis of covered area as per rates provided.
The Chief Commissioner shall, after being satisfied that the rates are applied correctly and after making such inquiry as he thinks fit, shall online issue a schedule of advance tax instalments to be paid by the builder.
The rules said that no transfer of building or built up units to the buyers shall be effected unless the builder shall furnish NOC from the Chief Commissioner for payment of tax dues. Provisions of sub-rule (1) shall not apply in case a builder pays one hundred and fifty percent of the tax liability to be computed in accordance with Division VIIIA of the First Schedule. Inspector General of Registration shall be responsible to collect and deposit tax and all the provisions of section 161 shall apply mutatis mutandis.
If a building or a land development project is stopped by any court order or by any government agency during construction of building or land development, the payment of subsequent instalments shall stand suspended till the time the stay order is vacated. If a builder or a developer fails to pay three consecutive instalments within due time, the Commissioner shall issue a notice in writing and copy thereof shall be endorsed to Association of Builders and Developers (ABAD). In case of no response or unsatisfactory reply, a committee of three members shall be constituted by the Chief Commissioner which shall comprise one member from ABAD. The committee shall decide further action as deemed fit.
If a building or land development project is disposed off during construction or development, the seller and purchaser shall jointly submit an application in writing to the Chief Commissioner. The Chief Commissioner shall issue NOC after satisfying that the due tax was paid by the seller. The remaining instalments of tax shall be paid by the successor-purchaser of the under construction building or under developed land on the terms of schedule of payment of instalments issued earlier to the predecessor-seller by the Chief Commissioner. There after all the provisions of this schedule shall apply to the successor-purchaser, draft rules added.
Following is the text of the S.R.O.(1)/2016 issued here on Friday: The following draft of certain further amendments in the Income Tax Rules, 2002, which the Federal Board of Revenue proposes to make in exercise of the powers conferred by sub-section (1) of section 237 of the Income Tax Ordinance, 2001 (XLIX of 2001), is hereby published for the information of all persons likely to be affected thereby, as required by sub-section (3) of said section, and notice is hereby given that the draft shall be taken into consideration by the Federal Board of Revenue after seven days of its publication in the official Gazette.
Any objection or suggestion, which may be received from any person, in respect of the said draft, before the expiry of the aforesaid period, shall be considered by the Federal Board of Revenue.
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APPLICATION FOR ISSUANCE OF SCHEDULE OF INSTALLMENTS FOR PAYMENT OF TAX
U/S 7C OF THE INCOME TAX ORDINANCE 2001 READ WITH RULE 13T OF INCOME TAX
RULES 2002
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1. Name of the builder/ owner
2. NTN/ CNIC (Attach copy of CNIC)
3. Name of project/ building (if any)
4. Address of the project/ building
5. Phone number
6. Mobile number of builder/ owner
7. Email Address
8. Name(s), CNIC and office Address(es)
of Member(s)/ Director(s) of AOP/
Company (if applicable)
9. Category (commercial/ residential &
offices/ dual)
10. Commercial area of building
11. Residential area of building
12. Total area of building
13. Total final tax liability Rs.
14. Less tax paid @ 5% on approval Rs.
15. Balance tax to be paid in equal four monthly instalments Rs.
16. Duration of the project in months Months
17. Amount of each installment Rs.
i. 1st installment due on - / - / - Rs.
ii. 2nd installment due on - / - / - Rs.
iii. 3rd installment due on - / - / - Rs.
iv. 4th installment due on - / - / - Rs.
v. Rs.
vii.
viii.
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APPLICATION FOR ISSUANCE OF SCHEDULE OF INSTALLMENTS FOR PAYMENT OF
TAX U/S 7D OF THE INCOME TAX ORDINANCE 2001 READ WITH RULE I3ZA OF
INCOME TAX RULES 2002
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1. Name of the developer
2. NTN/ CNIC (Attach copy of CNIC)
3. Name of land development project (if any)
4. Address of the project
5. Phone number
6. Mobile number of developer/ owner
7. Email Address
8. Name(s), CNIC and office Address(es)
of Member(s)/ Director(s) of
AOP/ Company (if applicable)
9. Category (commercial/ residential & offices/ dual)
10. Commercial area of project (Sq.yd)
11. Residential area of project (Sq.yd)
12. Total development area
13. Final tax liability Rs.
14. Less tax paid @ 5% on approval Rs.
15. Balance tax to be paid in equal four monthly instalments Rs.
16. Duration of the project in months Months
17. Amount of each installment Rs.
i. 1st installment due on - / - / - Rs.
ii. 2nd installment due on - / - / - Rs.
iii. 3rd installment due on - / - / - Rs.
iv. 4th installment due on - / - / - Rs.
v. Rs.
vii.
viii.
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