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If I bought a 4 marla commercial building in dha phase 2 in Feb 2016 and sold it in June 2016 , I understand I’m obliged to pay 5 % CGT but wanna know exactly how it’ll be done in light of new laws and plz if you lot could provide me with exact CGT amount along with method of calculation  …. thankx.

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The CGT is capital gain tax and includes the amount of profit you get on an asset you have purchased. In theory if you purchased a plot at 20 Million and paid 0.5 Million as taxes and commissions , later on you sold it at 25 Million excluding taxes . Your net gain is 4.5 Million and you are liable to pay 10% of CGT i.e 4.5 Lacs.

CGT if you sell property in first year is 10 % , 2nd year it is reduced to 7.5% and in 3rd year it is reduced to 5%.

After 3rd year there is no capital gain tax on your profits.

Now if you have not declared all your money as white while buying the asset , and you donot show all your profits while selling it off . You will only be liable to pay CGT on what you declare. However the remaining undeclared money will remain as black as it has not been taxed.

I do suggest that it is a golden opportunity to pay 5% on your profits and convert all your black money into taxed white money.

Regards

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Bro shukran but what will exact method be that government uses to calculate CGT …. new fbr value for 4 marla commercial in phase 2 from fbr chart minus old DC rate ?

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The declared Fair Market Value has got nothing to do with CGT. This is a common misconception that you have to pay CGT at 10% of declared FBR Value.

CGT is not paid at the transfer of the plot rather it is paid when you file your tax returns annually.

Lets say you showed 6 Million as the purchase amount of a plot , however you paid 20 Million to the seller . So basically 14 Million is the untaxed black money.

Now when you sell it at 25 Million , you can either declare that you have got a profit of 18.5 Million , pay a CGT of 10% over this profit which amounts to 18.50 Lacs and your entire money is now white and taxed.

or

You can show that you sold it for 6 Million and as you have not gained any profit you dont have to pay any CGT. However your 18.5 Million will remain as black untaxed money .

 

  • Shehryar
    Also remember that CGT has been 10% last year as well , just that people do not show that they have gained any profits and thus do not pay any CGT.
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Theekh bhai jee also how does the new fbr valuation table come in the scene then? Its used to do or calculate what?

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Also in your example you sold the plot before 1st July , so you are tech not effected by the new taxes or CGT.

You can always pay taxes as per last year .

The 5% CGT is for plots bought before 1st July 2016 and sold after 1st July 2016 if the time between purchase and selling is max 3 years.

A proper tax lawyer can guide you much better and you should wait till the policies become more clear.

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