Fixed tax Regime for Builders and Developers

Fixed tax Regime for Builders and Developers

Fixed tax Regime for Builders and Developers: Salient Features of Scheme u/s 100D of ITO2001

  • Fixed tax regime for builders and developers
  • Tax liability computed on the basis of square feet/yard, to be paid in quarterly installments
  • New projects as well as existing incomplete project can opt for the scheme up to 31.12.2021,however in order to avail immunity from provisions of Section 111 of the Income Tax Ordinance, 2001, the project must be registered by 30.06.2021
  • Projects to be registered with FBR online through IRIS portal
  • Existing incomplete projects have to self declare the percentage of completion of project on the relevant date
  • Projects must be completed by 30.09.2023.
  • Exemption from requirement of withholding tax on purchase of building material except cement and steel
  • Exemption from requirement of withholding tax on acquisition of services relating to construction except those from companies
  • Permission to incorporate ten times of fixed tax paid as income in the books of accounts
  • 90% reduction in fixed tax liability for low cost housing
  • Dividend paid by builder or developer companies shall not be liable to tax and there shall be no withholding on the payment of these dividends
  • Exemption from section 111 on investment made in new construction projects
  • By individual if:
  • Money is deposited in a new bank account upto 30.06.2021; or
  • Having ownership/title of the land invested as on 17.04.2020.
  • by company/AOP if:
  • A single purpose company or AOP is registered between 17.04.2020 and 30.06.2021
  • Money is invested through a crossed banking instrument upto 30.06.2021; or
  • Land owned by the partner/shareholder is transferred to the Company/AOP upto 30.06.2021.
  • Money or Land invested is utilized in the project
  • Project is completed by 30.09.2023
  • In case of builder, Grey structure is completed (top roof as per plan is laid)
  • In case of developer
  • Landscaping is completed and all roads are laid upto sub-grade level
  • At least 50% plots have been sold and at least 40% sale receipts have been received
  • Exemption from Section 111 on purchase of:
  • Plot, if:-
    • plot is purchased before 30.06.2021 (complete payment is made through banking channel before 30.06.2021)
    • Construction on such plot is started before 31.12.2021 and completed before the 30.09.2023
  • Building, if:-
    • Purchase is from a registered project and buyer is the first purchaser of the building
    • Purchase is made before 30.09.2022 (Complete payment is made through banking channel)
  • Exemption from section 111 is not available for
    • Public office holders
    • Public companies, REITs and companies whose income is exempt
    • Proceeds of crime

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