11/06/2022
Amendment For Tax year 2022-2023
profit on debt derived from investment in Federal Government securities will now be taxed at applicable rates as against 15% as a final discharge of tax liability. Banking companies and insurance companies were already being taxed on such income at applicable rates.
Deductible allowance in respect of profit on debt on housing loans is proposed to be withdrawn.
Following tax credits are proposed to be withdrawn •
a.Investment in shares and insurance
b.Investment in health insurance
C.Contribution to an Approved Pension Fund
However, the accumulated balance received from the voluntary pension system offered by a pension fund manager under the Voluntary Pension System Rules, 2005 will now be fully exempt from tax without any conditions.
Educational institutions are no longer required to collect 5% advance tax from non-filers on the amount of fee.
Any amount received as flying allowance or submarine allowance by concerned individuals is now proposed to be taxed at full rate as against reduced rates. Similarly, allowances received by pilots of Pakistan airlines will also be taxed at full rates.
Subject to certain exceptions, a resident person is deemed to receive rent equal to 5% of the fair market value of an immovable property situated in Pakistan. Such deemed income is proposed to be taxed for tax year 2022 and onwards at the rate of 20%.
Taxability of capital gains arising on disposal of immovable property proposed to be revised, depending upon the holding period and the category of the immovable property vis open plot, constructed property and flats. Further, no tax was payable where the property was held for more than four years. This period has now been extended to six
years.
Capital gain is exempt upto 25% if the capital asset is disposed off after one year. This exemption is proposed to be
withdrawn.
Advance tax from seller of immovable property under section 236C is proposed to be collected if the property is sold within ten years of its acquisition. Previously, no tax was to be collected from seller of property if the period of holding exceeded four years. Further, such tax collection is proposed to be increased from 1% to 2%. The rate of tax to be collected under section 236K on purchase of immovable property is proposed to be increased
from 1% to 2%. Further, such rate will be 5% in case of persons not appearing on the active taxpayers list.
Payment to non-resident person on account of fee for money transfer operations, card network services, payment gateway services, interbank financial telecommunication services is proposed to be taxed at 10%. Moreover, payment to non-resident person on account of fee for offshore digital service is proposed to be increased from 5% to10%.
Baking companies are required to collect tax at the rate of 10%, as a final discharge of tax liability. This tax is applied to payments to card network company, payment gateway or any other person on account of any transaction fee.licensing fee, service charges, commission or fee by whatever name called or interbank financial telecommunication
services.
Banks are required to collect tax at the rate of 1% on remittance outside Pakistan in respect of transactions made through credit card, debit card or prepaid card.
The value of passenger vehicles not plying for hire will now be eligible for tax deprecation upto PKR 5 million instead
of PKR2.5 million. Initial allowance is proposed to be extended to immovable property or structural improvement to the immovable
property.
