Punjab imposes 5% penalty
on non-banking transactions
Property buyers and sellers in
Punjab, the country’s most populous province, are facing stricter regulations,
with a new 5% penalty on property transactions conducted outside of banking
channels. This penalty comes as part of ongoing efforts by authorities to clamp
down on tax evasion and increase transparency in the real estate market.
According to a recent report, the
penalty will apply to property purchases with a market value exceeding Rs 50
lakh or any other assets valued above Rs 1 million if the transaction is
completed through non-banking methods, such as cash payments.
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This penalty adds to the existing
tax burden on property transactions, presenting a new challenge for real estate
buyers and sellers who must now comply with these stricter provisions. The
penalty will be imposed directly during property transactions conducted outside
banking channels.
In a recent meeting, tax authorities
expressed concerns over the lack of enforcement of this penalty and instructed
field officers to ensure its collection as per the law. This move is part of a
broader strategy to reduce non-banking property transactions and enhance
accountability within the sector.
Key Tax Changes for Property
Transactions:
- Property Transaction Tax
Filers: 15%
Non-filers: 45% - Capital Gains Tax (CGT)
Filers: 15%
Non-filers: 15-45%, depending on property value - Advance Property Tax
- Up to Rs 50 million: Filers 3%, Non-filers 12%
- Rs 50 million to Rs 100 million: Filers 3.5%,
Non-filers 16%
- Over Rs 100 million: Filers 4%, Non-filers 20%
- Non-filer Sellers:
10% regardless of property value
- Federal Excise Duty (FED):
5% duty on property transfers or allotments
Source: Daily Pakistan