Payment of Advance Tax under Section 147 by Builders and Developers
Payment of Advance Tax under section 147 by Builders and developers: Finance Act 2023 to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, and to amend certain laws WHEREAS, it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, and to amend certain laws for the purposes hereinafter appearing;
A new sub-section (5C) has been inserted in section 147 through Finance Act, 2023 whereby builders and developers, instead of discharging advance tax liability on the basis of tax payable to turnover ratio, are now required to compute their advance tax liability on the basis of area and size of the building or land development project and the liability so computed will be paid in terms of other provisions of the section 147 of the Ordinance.
The rates of tax for the purpose of sub-section (5C) of section 147 have been provided in Part LIB of First Schedule to the Ordinance. The advance tax will be computed by builders and developers on the basis of rates provided in aforementioned division which will be paid in four equal quarterly installments and shall be paid in terms of sub-sections (5) and (5A) of section 147.
Furthermore, the builder and developer will compute and pay the advance under this section on project-to-project basis. Rules for the purpose of sub-section (5C) of section 147 will be notified accordingly.
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