Amendments in the Section 8 of the Finance Act, 2022
Amendments in the Section 8 of the Finance Act, 2022: Finance Act, 2024 — Explanation regarding Important Amendments made in the Income Tax Ordinance, 2001
Important amendments made in Income Tax Ordinance, 2001 (“the Ordinance”) through Finance Act, 2024 are explained in the subsequent paragraphs.
Amendments in the Section 8 of the Finance Act, 2022
Finance Act, 2024 has enhanced the scope of capital value tax (CVT), imposed under section 8 of the Finance Act, 2022, to levy CVT on farmhouses and residential houses located within the territorial limits of Islamabad Capital Territory.
New proviso to sub-section (1) of section 8 has been inserted to provide that CVT on farmhouses and residential houses located within the territorial limits of the Islamabad Capital Territory shall be levied, charged, collected, and paid on the basis of the area of the farmhouse and residential house irrespective of their value.
Two clauses (ab) and (ac) have been inserted in sub-section (2) of section 8 whereby scope of CVT has been increased to include farmhouses and residential houses within the territorial limits of Islamabad Capital Territory as assets, whereon CVT has been levied.
Sub-section (4) of section 8 provides for the manner in which the CVT shall be collected or paid. Amendments have been made in clause (g) of subsection (4) to provide that the persons holding the farmhouses and residential houses within the Territorial Limits of Islamabad Capital Territory shall pay CVT at the time the income tax return for the tax year is due.
Amendments have been made in the First Schedule to section 8 of the
Finance Act, 2022 to provide for the rate of CVT on farmhouses and residential houses, which are as under:
Assets mentioned in 500,000 rupees, for the farmhouse with an clause (ab) of sub- area between 2,000 square yards and 4,000 section (1) square yards and 1,000,000 rupees if the area exceeds 4,000 square yards
Assets mentioned in clause (ac) of sub-section (1)
1,000,000 rupees, for the residential house with an area between 1,000 square yards to 2,000 square yards, and 1,500,000 rupees if the area exceeds 2,000 square yards
Read full text of Explanation of Finance Act, 2024 Amendments made in the Income Tax Ordinance, 2001 for more updates on taxes from FBR click here.
