A.   Background (BG)

This refers to the related Important TLQCs in trail, blue, italic and double line (a) 3024 of 3.2.25 about Immovable Property Taxation under Model Treaty, Pakistan Tax & KCW (b) 3006 of 20.1.25 about Resident Pakistanis in UAE & UK – Rent & Capital gain not taxable- ATIR DB (c) 2997 of 11.1.25 about International Information Exchange = 20 Counties Banks, Property, Tax Fraud, etc Data sought

2.   We also refer to several Other TLQC including (a) 2993 of 8.1.25 about Pakistani tax residents' UAE & UK Property Capital gain & Rent taxability Conflicting ATIR orders (b) 2757 of 27.5.24 about Dubai Leaks: Legal Aspects of Dubai Leaks Ex Minister & Ex FBR Chairman

B.   Updated Commentary

Further to BG, Finance Act Workshops & KQU 3213, being an important matter, we would inform you about Collection Of Penalty Chargeable Under Income Tax Ordinance, 2001 On Purchase Of Property Through Non- Banking Transactions (Attachment 3034.1) being letter No 2954-2024/2133 of early dated 12.12.24 of Board of Revenue Punjab (found from reliable resources recently) in the ensuing paragraphs in Italics, with emphasis in bold & Underline for quick reading.

2.   Under section 75A of the ITO, 2001 read with entry no 21 of Chapter X, a penalty at the rate of five percent shall be charged in case of purchase of property through non-banking transaction if the value of immovable property having fair market value is greater than five million rupees or any other assets having fair market value more than one million rupees

3.   During Pre-PAC meeting dated 2.12.24 held under the chairmanship of Senior Member, Board of Revenue, Punjab to review the progress of compliance on Proposed Draft Paras, it was observed that the Sub-Registrars, Assistant Directors Land Records and Transferring Officers as withholding agents, have not collected the penalty on non-banking transactions. The SMBR showed his displeasure over non-recovery of penalty on such transactions and directed to circulate instructions to all the field formations to collect the requisite penalty

4.   I am directed to request to issue directions to all the Sub-Registrars, Assistant Director Land Records and transferring/attesting officers working under your respective jurisdiction to collect the penalty in case of non-banking transaction as per cited law. In case of failure to collect the penalty chargeable on non-banking transactions the concerned transferring/attesting officer shall be responsible.

C.   Kasbati & Co Workshop planner about Property & related matters

C.   Further Details & Services 

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisor