ISLAMABAD: Senate of Pakistan has recommended that tax amnesty i.e. immunity from explaining source of income for builders and developers should be extended up to June 30, 2021.
The investment in the construction sector have been granted immunity from Section 111 of Income Tax Ordinance, 2001 and investor as an individual is required to open a new bank account and deposit such amount in it on or before December 31, 2020.
In case of corporate shareholder/partner, such amount shall be invested through a crossed banking instrument deposited in the bank account of such association of persons or company, as the case may be, on or before December 31, 2020.
The upper house recommended the National Assembly following amendments in the package for the construction industry announced by the federal government:
a. Acquisition of plots, approvals of maps, and initial mobilization cannot completed till December 31, 2020, it has to be revised to June 20, 2021 considering COVID spread in the country and delays in all process.
b. Builders and developers both must be given completion dates till December 31, 2023, as construction projects of reasonable size needs minimum three years to complete from start of construction activity. Pact of project construction entirely depends upon installments flow.
c. Builders and developers must be allowed to transfer ownership of land under this package by June 30, 2021 (individuals or member of company or partner in AOP).
d. Immunity under section 111 of the Income Tax Ordinance, 2001 to be extended till June 30, 2021 for developers and builders and purchasers.
e. Time limit shall not be imposed on purchaser to complete construction by September 30, 2020 as his contributions of installments by him are directly helping developers to claim benefits of this package. Economic contributions from purchasers start from payment of first installment.
f. Approval from NESPAK on completion of construction projects, percentage of development, road laid and grid must be withdrawn as local authorities exist in all cities which require completion under applicable laws.
g. Certification from a chartered firm on 50 percent booking of plots and 40 percent receipt of installment must also be withdrawn as failed investment shall cost business losses to individuals, AOP and company accordingly.