Application Of Tax Amnesty 236 W

The circular said that Section 236W inserted through the Income Tax (Amendment) Act, 2016 mandates that every person responsible for registering or attesting transfer of any immovable property, shall, at the time of registering or attesting the transfer collect from the purchaser or transferee an advance tax at the rate of 3 percent of the amount representing the differential between the value of immovable property notified by the FBR and the value recorded by the authority registering or attesting the transfer, provided that the value of immovable property notified by the FBR is greater than the value recorded by the authority registering or attesting the transfer.
The tax collected under section 236W shall not be adjustable in the hands of the purchaser. The FBR also clarified that collection of tax under section 236W of the Ordinance is in addition to collection of withholding tax under section 236C and 236K of the Ordinance. For the sake of clarity, illustrations/examples regarding computation of tax to be collected under section 236W is as under :-

Example 1 (taxpayer is a filer)
(a) Amount at which Seller and Purchaser have agreed (in the Agreement to Sell etc): Rs. 5 million
(b) District Collector Rate: Rs. 7 million
(c) Amount at which the property is to be registered [higher of (a) or (b)] i.e. registered value: Rs. 7 million
(d) FBR Rate: Rs. 10 million
(e) Taxes u/s 236C (one percent of Rs 10 million) or Rs.100,000
(f) Tax u/s 236K (2 percent of Rs. 10 million) or Rs.200,000
(g) Tax u/s 236W [3 percent of Rs. 3 million (d-c)] or Rs.90,000
Example 2 (taxpayer is a filer)
(a) Amount at which Seller and Purchaser have agreed (in the Agreement to Sell etc): Rs 1 million
(b) District Collector Rate: Rs. 2 million
(c) Amount at which the property is to be registered [higher of (a) or (b)] i.e. registered value: Rs. 2 million
(d) FBR Rate: Rs. 3 million
(e) Taxes u/s 236C (1 percent of Rs. 3 million) or Rs.30,000
(f) Tax u/s 236K (Not applicable as less than Rs 4 million)
(g) Tax u/s 236W [3 percent of Rs. 1 million (d-c)] or Rs.30,000
Example 3 (where taxpayer is a non-filer)
(a) Amount at which Seller and Purchaser have agreed (in the Agreement to Sell etc): Rs. 5 million
(b) District Collector Rate: Rs. 7 million
(c) Amount at which the property is to be registered [higher of (a) or (b)] i.e. registered value: Rs. 7 million
(d) FBR Rate: Rs. 10 million
(e) Taxes u/s 236C (2 percent of Rs. 10 million) or Rs.200,000
(f) Tax u/s 236K (4 percent of Rs. 10 million) or Rs.400,000
(g) Tax u/s 236W [3 percent of Rs. 3 million (d-c)] or Rs.90,000
Example 4 (taxpayer is a filer)
(a) Amount at which Seller and Purchaser have agreed (in the agreement to Sell etc): Rs. 12 million
(b) District Collector Rate: Rs. 7 million
(c) Amount at which the property is to be registered [higher of (a) or (b)] i.e. registered value: Rs. 12 million
(d) FBR Rate: Rs. 10 million
(e) Taxes u/s 236C (1 percent of Rs. 10 million) or Rs.100,000
(f) Tax u/s 236K(2 percent of Rs. 10 million) or Rs.200,000
(g) Tax uls 236W is not applicable since FBR value is less than the registered value.
Example 5 (taxpayer is a filer)
(a) Amount at which Seller and Purchaser have agreed (in the Agreement to Sell etc): Rs. 7 million
(b) District Collector Rate: Rs. 5 million
(c) Amount at which the property is to be Registered [higher of (a) or (b)] i.e. registered value: Rs. 7 million
(d) FBR Rate: Rs. 9 million
(e) Taxes u/s 236C (1 percent of Rs. 9 million) or Rs90,000
(f) Tax uls 236K (2 percent of Rs. 9 million) or Rs.180,000
(g) Tax u/s 236W [3 percent of Rs. 2 million (d-c)] or Rs.60,000
Example 6 (taxpayer is a filer)
(a) Amount at which seller and purchaser have agreed (in the agreement to sell etc): Rs4 million
(b) District Collector Rate: Rs6 million
(c) Amount at which the property is to be registered [higher of (a) or (b)] i.e. registered value: Rs 6 million
(d) FBR Rate: Rs6 million
(e) Taxes u/s 236C (1 percent of Rs6 million) or Rs60,000
(f) Tax u/s 236K (2 percent of Rs6 million) or Rs120,000
(g) Tax u/s 236W [3 percent of Rs. 0 million (d-c)] or no amount
Example 7 (taxpayer is a filer)
(a) Amount at which seller and purchaser have agreed (in the agreement to sell etc): Rs4 million
(b) District Collector Rate: 6 million
(c) Amount at which the property is to be registered [higher of (a) or (b)] i.e. registered value: Rs6 million
(d) FBR Rate: Rs6 million
(e) Taxes u/s 236C (seller dependent of Shaheed): no withholding tax
(f) Tax u/s 236K (2 percent of Rs 6 million) or Rs120,000
(g) Tax u/s 236W [3 percent of Rs. 0 million (d-c)] no amount of tax to be collected.

Source

http://www.fbr.gov.pk/ShowDocument.aspx?type=Doc&Actionid=14765

http://www.pkrevenue.com/inland-revenue/fbr-explains-application-of-tax-rate-under-amnesty-for-property-transactions-withholding-tax-rates/