Clarification on Changes in Sections 236C and 236K through Finance Act 2022

Changes in the Income Tax Ordinance, 2001, through Finance Act, 2022

Clarification on Changes in Sections 236C and 236K: It is brought in your kind notice that the following changes have been made with respect to section 236C and 236K of Income Tax Ordinance, 2001 through Finance Act, 2022: 

Change in Rates for tax collection under section 236C and 236K

The rates for section 236C and 236K have been amended as under:

 Note: The new rates shall apply to all transfers that are executed on or after July, 2022 which means that the official document issued by the transferring authority must certify execution of transfer on or after lst July, 2022.

Section 236C: Removal of time limit for collection of withholding tax u/s 236C:

Sub Section (3) of Section 236C has now been omitted. Hence, withholding tax under Section 236C shall now be collected from every seller irrespective of the holding period.

Further, as already in vogue, tax rate for 236C shall be increased by 100% in the case of Non-filers as per the Rule-1 of Tenth Schedule of Income Tax Ordinance, 2001 as indicated in the rate table above.

Increased withholding tax u/s 236K for Persons Not Appearing on ATL

Tax rate for 236K shall be increased by 250% in the case of Non-filers as per the amended Rule-1 of Tenth Schedule of Income Tax Ordinance, 2001 as indicated in the table above.

Clarification on Changes in Sections 236C and 236K

This letter is issued with approval of FBR Policy Wing. Any explanation or clarification issued by any sub-ordinated authority within FBR field formations shall stand modified to the extent clarified above.

You are therefore, requested to ensure that the aforesaid changes are strictly followed by all property registration authorities under your control for correct collection and deposit of withholding taxes accordingly.

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