Chapter VI (Special Industries), Part II
[100D. Special provisions relating to builders and developers. – (1) For tax year 2020 and onwards, the tax payable by a builder or a developer, as defined in sub-section (9), who opt to pay tax under this section shall be computed and paid in accordance with the rules in the Eleventh Schedule on a project by project basis on the income, profits and gains derived from the sale of buildings or sale of plots, as the case may be, from–
(a) a new project to be completed by the 30th day of September, 2023; or
(b) an incomplete existing project to be completed by the 30th day of September, 2023:
Eleventh Schedule [See section 100D]
Rules for computation of profits and gains of builders and developers and tax payable thereon
1. Eligibility.–These rules shall apply to projects undertaken by builders and developers under section 100D.
2. Scope and payment of tax.—(1) Income computed and tax payable thereon shall be on Project-by-Project basis which shall be computed and paid at the rates provided in rule 10.
(2) (a) The above-referred rates shall be applicable for computing tax liability for the project on annual basis. The annual tax liability shall be worked out as under:
Tax liability as per the rates in rule 10
Estimated project life in years
(b) The estimated project life for tax purposes shall not exceed three and a half years:
[Provided that in case of existing incomplete projects, the estimated project life shall be treated as four years maximum from tax year 2020 through tax year 2023 and the tax payable shall be reduced by the percentage of completion up to the last day of accounting period pertaining to tax year 2019 or tax year 2020 as declared in the registration form.]
10. Rate and computation of tax liability. -(1) The rate of tax under section 100D shall be computed in accordance with the Table below, namely
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Rate in Respect of |
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1 |
2 |
3 |
4 |
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Area in |
Karachi, Lahore and Islamabad |
Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbotabbad, Quetta |
Urban Areas not specified in columns (2) and (3) |
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Tax on builders for commercial buildings |
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Sq ft |
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Any Size |
Rs. 250 per square ft |
Rs. 230 per square ft |
Rs. 210 per square ft |
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For Residential Buildings |
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Sq ft |
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Upto 3000ft |
Rs.80 per square ft |
Rs.65 per square ft |
Rs.50 per square ft |
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3000 and above |
Rs.125 per square ft |
Rs.110 per square ft |
Rs.100 per square ft |
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Tax on Developers on the entire project for any size in square yards |
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Sq Yds |
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Any Size |
Rs.150 per square yd |
Rs.130 per square yd |
Rs.100 per square yd |
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For Development of Industrial Area |
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Sq Yds |
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Any Size |
Rs.20 per square yd |
Rs.20 per square yd |
Rs.10 per square yd |
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(2) In case of mixed use buildings having both commercial and residential areas, respective rates mentioned above shall apply.
(3) In case of development of plots and constructing buildings on the same plots as one project, both rates shall apply.
Provided that in the case of low cost housing' and all projects developed by NAPHDA, the higher rates shall apply.
Source:
Income Tax Ordinance 2001, Section 100D and Rule 10 of the Eleventh Schedule
https://fbr.gov.pk/Categ/Income-Tax-Ordinance/326