Capital Gain Tax On Property In Pakistan |Implementation & Calculations

Paying tax has now become more complex than before. The reason behind it is that there are different taxes and we are often not well aware about tax types, calculations and implementations. If you are a citizen of Pakistan and you own or intend to own a property, you must know about Capital gain tax on property in Pakistan . There is more risk of being betrayed if you dont know about tax calculation particularly. So, read the article carefully and get yourself aware about updated information to void inconmvenience while filing tax.

What Is Capital Gain Tax?

Profits from the sale or exchange of capital assets are known as capital gains. A capital asset, with few limitations, is often any property you own, like; Investment property or Property held for personal use.

The vendor is responsible for paying this tax. The profit, which is taxed when the seller gains money off of the sale of real estate, gives the term its name. The Finance Act of 2017 states that CGT is only assessed when a property is sold within three years of the original purchase. The tax rate varies depending on when the property is sold: 10% in the first year, 7.5% in the second year, and 5% in the third year. Based on the valuation table provided by FBR, these gains are to be determined in accordance with fair market value. The seller will not be responsible for paying CGT on any property kept for more than three years.

Distinctions Of Capital Gain Tax

There are few things one must understand about capital gain tax :

The seller is the only party subject to capital gains tax. The buyer does not pay capital gains tax.
It is to be deposited at the time of your annual tax returns.
This is only payable on the profits you made; it is not payable on the full amount of the good you sold. The difference between your purchase price and sale price is subject to capital gains tax when selling real estate.

How To Calculate Capital Gain Tax?

Capital gain tax is calculated with the help of three different methods. You can use any of the methods to calculate tax.

Method 1: Using actual values
Method 2: Using old DC rates and new FBR value
Method 3: Using new FBR value

Using New FBR Value
When buying and selling real estate, you must declare the actual price and deposit the capital gains tax due based on the profits you actually realised.
Using Old DC Rates And New FBR Value
Dc rate at the time of purchase – FBR value at the time of sale = Total Profit (5% CGT on profit )
Using New FBR Value
FBR Value at the time of purchase – FBR value at the time of sale = Total Profit (CGT = 10%,7.5%,5% respectively for 1st , 2nd and 3rd year on profit )
However, if you sell it another financial year and the FBR value has changed than you will pay CGT as follows.
FBR Value at the time of purchase – FBR value at the time of sale = Total Profit (CGT = 10%,7.5%,5% respectively for 1st , 2nd and 3rd year on profit )

Properties Exempted From Property Gain Tax

Any immovable property that is allotted to
1. a shaheed or dependents of a shaheed belonging to Pakistan Armed Forces
2. a person or dependents of the person who dies while in the service of Pakistan armed forces or Federal or provincial government
3. a war wounded person while in service of Pakistan armed forces or Federal or provincial government;
4. an ex-serviceman and serving personnel of armed forces or ex-employees or serving personnel of Federal and provincial governments, being original allottees of the capital asset duly certified by the allotment authority;
One fixed asset that belongs to the resident.

Self-owned business space from which individuals listed on the active taxpayers’ registry at any moment during the year conduct their company.
Farmhouse (defined in a certain way) and property annexed thereto are not included in self-owned agricultural land where agriculture activity is performed by a person.
Any real estate that is mobile and from which income is already subject to income tax.
Immovable property that is owned by a local or provincial government.

This is all about Capital gain tax on property. If you re going to file your tax make sure you know everything about it and you have the idea about calculation of tax as well.

Custom Duty On Cars In Pakistan

Do you know that new and even used vehicles are now importable into Pakistan without any hassle? All you have to do is to pay some tax as a customs duty and you can drive your dream car with your family in your own country. Every country charges customs on imported goods and that is decided by the state itself. Likewise, there is a fixed Custom duty on cars in Pakistan .

Before you import a car, make sure you know the procedure and policies. Read the article to the end and know the details and differences between importing new and used vehicles.

What is Cars Custom Duty?

This is the amount paid for your car to be legally driven. Regardless of whether the car is new or used, custom duty must be paid. Nobody is allowed to obtain a vehicle from the port without paying the customs charge. Any vehicle which is imported without paying tax is considered illegal. The customs duty of a car depends on its make year, engine power, and car type.

Schemes For Import Of Cars

New and old vehicles are importable under various schemes:

Import Of New Vehicles:
Under the current import policies and conditions set forth in the Import Policy Order and Customs law, new automobiles can be legally imported into Pakistan by any person after the settlement of applicable taxes.
Import Of Used Vehicles:
According to Appendix-E of the Import Policy Order 2016, which is a legal exception, overseas Pakistanis are permitted to import used vehicles only under the following three schemes:

Personal Baggage
Gift Scheme
Transfer of Residence

Following is the vehicles imported under different schemes

Sr	Schemes	Types Of Vehicles
1	Personal Baggage	Passenger car, bus, van, trucks, pick-ups including 4×4 vehicles, agriculture tractors, bulldozers, laser land levelers and combined harvesters
2	Gift Scheme	Passenger car, bus, van, trucks, pick-ups including 4×4 vehicles, agriculture tractors, bulldozers, laser land levelers and combined harvesters
3	Transfer of Residence	Passenger car, bus, van, trucks, pick-ups including 4×4 vehicles, agriculture tractors, bulldozers,laser land levelers, combined harvesters and motorcycles or scooter.

Variation In Custom Duties

Duty amounts varies depending on engine power. Here are the engine displacements that are subject to the same customs payment requirements:

660cc to800cc cars = same customs duty.
801cc to 1000cc = equal.
1001cc to 1300cc cars =same custom charges.
1301cc to 1500cc cars = equal in custom duty.
1501cc to 1800cc cars = same custom charges.

How To Calculate Custom Duty Of Cars?

Custom obligation and current dollar rate are closely related. For calculating custom duty on cars you have to know a few basic details and you can simply do it yourself as follows:

Find out how much your car is worth in dollars.
Multiply the amount by the traditions’ current exchange rate.
Multiply it by the level of duty to be paid, which is 35%.
Multiply the complete surface duty by 138.
Include the cost of transportation and terminal fees.

How To Pay Custom Duty On Cars In Pakistan?

You can easily check custom duty online. Customs fees are paid with WeBOC. A Log-In ID and password will be provided by the collector after the application is approved. These are used to create a Payment Slip ID (PSID) for e-payment in order to access the profile where the customs duty will be paid electronically. The process you will follow to pay for your imported car is as follows:

- In order to proceed, you must first supply the necessary documentation, such as a bill of lading, a receipt for the purchase of a car, personal information, etc.
- You must input your login information on the WeBOC website in order to create a PSID. Click the Goods Declaration link on the left-hand side of the homepage when you arrive there.
- Choose the Consignment Category and Declaration Type from the pop-up menu that displays after it.
- Once the Goods Declaration form appears, complete it with the necessary details in each box before submitting.
- Choose the E-Payment option from the payment through the drop-down menu.
- Complete the form with all the necessary customs and other import fee information, then submit it.

Once you have entered your payment information, a page with payment details will appear.
You will then receive a generated PSID page with all the details of your custom payment.

You can get your desired car and drive that with convenience in Pakistan now. Just follow the guidelines provided here and do not miss any points to avoid inconvenience.

What Is Federal Excise Duty In Pakistan?

Did you hear about Central excise duty? If you are familiar with this term, it will be more convenient for you to understand Federal excise duty in Pakistan. The word ‘federal’ replaces ‘central’ and is better described by the Federal excise act, 2005.

Its basic information is mandatory for you if you are concerned with manufacturing and sales of goods and services, either directly or indirectly. You should learn about FED basics to do your tasks accurately.

Stay tuned and increase the accuracy of your work!

Federal Excise Duty Act

Deducting the amount of duty paid on goods used to make or produce other goods from the amount of duty due on those other goods in the prescribed manner is Federal excise duty. It is best described by the Federal excise act 2005. It revokes the Central Excises Act of 1944. Following are the amendments made in this Act:

The word “Central” was changed to “Federal.” That makes the name “Federal Excise Duty” more applicable than the “Central Excise Duty.”
Contrary to the previous method, clearances do not require gate passes.
Adjustment of the excise duty paid on the input products used directly in producing excisable items is permitted, and double taxation has been removed.
All clearances will now be self-assessed, and no prior approval for clearance will be necessary, thanks to the complete elimination of the physical supervision system.
On various services and items, FED is payable in VAT more, i.e., by the Sales Tax Act of 1990’s provisions. See the link on this page labeled “Goods/Services Liable to Excise Duty” for more information.
The duty on all clearances made during the month is due by the 15th of the following month.
The duty is paid every month. In contrast, the earlier requirement that duty was supposed to be paid before the clearance.

What Are The Non-Tariff Areas?

Some areas to which this Act does not apply; are non-tariff areas. These areas also include;

Azad Jammu and Kashmir
Northern Areas

What Are The Dutiable Goods?

FED is payable on the following goods:

Goods Produced Or Manufactured In Pakistan
Goods Imported Into Pakistan
Services, provided or rendered in Pakistan
Good produced in or manufactured
Non-tariff areas and sold in tariff areas

What Is Special Excise Duty?

A particular FED of 1% has been imposed on items produced or imported in Pakistan. The Federal Excise Act of 2005’s First Schedule specifies FED in addition to this charge. For a list of items not subject to this particular duty.

Exemption Of Good And Services ____ Section 16

The following are the exemptions:

The goods and services listed in the First Schedule are subject to the rates and conditions of Federal Excise Duty set forth therein.
No adjustment in accordance with section 6 shall be admissible in respect of goods exempt from the duty of excise, whether conditionally or otherwise. The goods and services specified in the Third Schedule shall be exempt from duty subject to such conditions and restrictions, if any, specified therein.
The commodities listed in the Second Schedule shall be subject to FED in accordance with Section 7 of the Federal Excise Act of 2005 and the Sales Tax Act of 1990.

Before you file tax, whether it is FED, Property Tax In Pakistan, or any other tax, ensure you get complete information. Calculate the tax yourself and follow the proper procedure to file the tax.