Dear Ali,

Yes you can declare any price, actual or FBR which ever is more suiteable.

Jazak Allah

This is correct. where it is advised?  as per tax consultant and property lawers,  if you have paid tax on FBR value, you can not declare a higher or actually paid price which is always higher in the case of DHA, in the returns, else it’s tax evasion.  for example

You paid 45000 for 10 marla agains 4.5million while purchse price is 9million. either you pay 90000 tax to declare actual price or your price reduce to 4.5million. In the latter case, there is huge implications that our agents have no knowledge. unless you sell this property after 4 years, you will huge capital gain or part of you money will remain undeclared if you again declare less sale price. I have gone through this trouble. Moreover, for people who are dual national, the captical gain tax is flat 20%. mean in such case one had to pay 20 lak tax in forign too.. so please discuss and consult righ people else its lot stress at later stage. thanks

I meant “This is NOT correct’  the advice provided is incorrect… typo

The information provided is correct, however there are tax complications involved in your case. Firstly you can declare any price without paying additional tax on it. Meaning you can only pay FBR Tax but declare complete white money in your tax returns without paying any further tax on it.

We never had any issues with any such declartaions and we do hundreds a year if not thousands. However the infomration Muhammad has provided is also correct, if you declare FBR value it will have tax implications if you sell it before 4 years. Also if Govt policies change regarding CGT such as increase time period or taxes that will impact you as well.

If this is your white money, it is best to declare it 100%.

Jazak Allah

Capt sb what you referred when said ‘there are complications in your case’?

Secondly, ‘facing no issue by doing 100 transctions’ is not a legal standing/justification or establish that all done is by books.

In-country like Pakistan sometimes lawmakers do not know what is the interpretation and implications how could tax office can aware so quickly. However on the face of it, this is not a correct declaration in my understanding while law states tax has to be 1% (for filler) on property value ( not on FBR value- while FBR value is the minimum threshold) so why somebody would prefer to save 35,000 on 8 million property purchase by paying 45000 on FBR rate and make 3.5 million an undeclared money while all money is white with the source.  This only happens when this whole set up is run by agents doing same thing day in day out without any knowledge but only due to the reasons they know other do same or society told them.. will DHA respond on behald of buyer in 5 or 8 years time even there won’t be any capitcal gain implication are void. I think you people should guide customer the real picture. not everyone is with dirty wealth.

His complication is

” Moreover, being dual nation It will cost me 20% captial gain in abroad as well.”

He is safe as far as Pakistan is confirmed, we always declare FBR value for taxation and full price for declaration without giving any additional taxes. Lawyers try to create confusion in this process but than they fail to answer how a non filer is able to buy a plot by paying just a bit more tax.

It is completely legal and no questions asked.

Jazak Allah

Again is this enough to support that “we always declare FBR value for taxation and full price for declaration without giving any additional taxes”

can we provide a single reference-one liner from FBR circular, or tax act document, stating that “advance tax to be paid on FBR value” despite the fact that actual transaction / paid price (price to be documented in the wealth statement) is higher/double to the FBR value???

Regarding your point on non-filer, they are not better off anyway as I explain below;

Say when a non-filer (such as housewife with zero or below 4 lakh income- legally not required to be tax filer) bought property on her name for 10 million and paid 90,000 advance tax (2% of FBR value – the minimum threshold to be able to buy a property), this is all good and no issue if nothing to be done further with this purchase. However, if she is selling this property in 2 years at 1.2 million, now she is legally bound to be a filler due to income (capital gain of 7.5million as her case, as the property, was never documented earlier for 10 million and tax paid 2% was for 4.5 million, moreover 5.5 m will be undeclared in this case). While a filer might pay 100,000 (1% of the purchase value) but capital will be just 3 million instead of 7.5miilion and hence lower capital gain plus all wealth of 10 million and 1.3 million is declared and while in this case. hope this answer this query.. why non-filer is better off in any case. please treat this food for thought..