Federal government has imposed advance tax ranging from Rs 50,000 to Rs 200,000 on the individual, who will sell their new car within three months of purchase to tackle the menace of own money.
The president has promulgated the Tax Laws (Amendment) Ordinance 2021 in this regard, according to which the government has imposed taxes along with the exemption of taxes on different categories.
As per the details, mentioned in the documents, every motor vehicle registering authority of the Excise and Taxation Department is required to collect advance tax. Also, the concerned authorities will collect this tax from buyers of locally assembled new cars, who subsequently sell them within 90 days of delivery, whether before registration or after.
The tax amounting to Rs 50,000 will be for up to a 1000cc vehicle, and Rs 100,000 from 1000cc to 2000cc and Rs 200,000 from 2000cc and above engine capacity vehicles; the tax is adjustable and applicable till June 30, 2021, only.
It is being said that the advance tax has been introduced in order to discourage the ‘own money’ culture, which has become the major factor in car price hikes over the past years.
The advance tax has also been imposed on the sale or transfer of immovable property under the tax law, ordinance. “If the seller or transferor is a non-resident individual holding POC, NICOP or NIC, who had acquired the immovable property through an FCVA or an NRVA maintained with authorized banks in Pakistan shall be final tax in lieu of capital gains earned by the seller or transferor from the property so disposed of”.
According to the newly introduced ordinance, every banking company maintaining a Foreign Currency Value Account (FCVA) or a non-resident Pakistani Rupee Value Account (NRVA) of a non-resident individual holding Pakistan Origin Card (POC) or NIC for Overseas Pakistanis (NICOP) or computerized NIC will deduct tax at 10 percent on capital gain arising on the disposal of debt instruments and government securities and certificates, that includes Shariah-compliant variant invested through FCVA and NRVA, and this will be a final tax liability for such non-resident persons.