Tax Amnesty on Money Invested by Builders, Developers Available Till 31st Dec

A tax amnesty to be granted to builders and developers for new housing projects is available till December 31, 2020. The procedure to avail the tax amnesty to builders and developers is available under Section 100D of Income Tax Ordinance, 2001.

Section 100D, Special provisions relating to Builders and Developers, states that;

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, 2022; or

b) an incomplete existing project to be completed by the 30th day of September, 2022;

Provided that any income, profits and gains of a builder or developer of an incomplete existing project earned up to tax year 2019 shall be subject to the provisions of this Ordinance as were in force prior to the commencement of the Tax Laws (Amendment) Ordinance, 2020 (Ordinance I of 2020).

Furthermore, provided that any income of a builders or developer other than income profits and gains subject to this section shall be subject to tax as per the provisions of this Ordinance.

2) Where sub-section (1) applies;

a) the income shall not be chargeable to tax under any head of income in computing the taxable income of the person.

b) no deduction shall be allowed under this Ordinance for any expenditure incurred in deriving the income.

c) the amount of the income shall not be reduced by;

i) any deductible allowance under Part IX of Chapter III.

ii) the set off of any loss.

d) no tax credit shall be allowed against the tax payable under sub-section (1) except credit for tax under section 236A or 236K collected from the builder or developer after the commencement of the Tax Law (Amendment) Ordinance, 2020 (1 of 2020) on purchase of immoveable property utilized in a project.

e) there shall be no refund of any tax collected or deducted under this Ordinance.

f) if the tax payable has not been paid or short paid, the said amount of tax may be recovered and all the provisions of this Ordinance shall apply accordingly.

g) section 113 and 113C shall not apply on the turnover, income, profits and gains of a builder or developer from a project.