Sunday, June 19, 2011

RAC FBR thinks deeply about CGT over immovable property

Revenue Advisory Council (RAC) of the Federal Board of Revenue (FBR) has begun contemplating for imposing Capital Gains Tax (CGT) on the sale of immoveable properties to increase revenue potential of the real estate sector in the country, official sources informed.
The federal govt has already decided to continue exploring new avenues for the generation of domestic resources for the country, and RAC meetings are to continue in the next fiscal year despite announcement of the federal budget 2011-12.
Legal wing of the FBR brought it to the notice of members of the RAC that passage of the 18th Amendment did not impose any restriction on the imposition of CGT on the sale of immoveable property.
After the fact was brought to its notice RAC was given this task to examine the rate of CGT on the sale of newly purchased immoveable property and the rate of tax on the sale of immoveable properties purchased few decades ago.

The sources also informed that real issue in the imposition of CGT is the real valuation of such properties, as sellers and buyers of immoveable properties conceal actual present value and complete sale deeds on value some 3 times lesser than the present day value of immoveable properties in all big cities.