OKARA: The increase in stamp duties by the Punjab Revenue Department on 19 articles in property sale/purchase deals is likely to increase financial woes of the masses hit hard by inflation.

After an amendment to rules in the provincial budget, the increase in stamp duties ranged from 100pc to 300pc. Similarly, the rules relating to the capital gains tax (CGT) of the Punjab Finance Act (PFA) 2013 have also been amended in the recent budget after less than a year to increase the tax amount. Both the moves are likely to affect the poor sections of the society who are already suffering from the burden of indirect taxes.

The Board of Revenue (BoR) Punjab Stamp Wing, vide its notification No. 1929-2014/964-ST (I) dated: 26-06-2014, revised the rates of stamp duty through the Punjab Finance Act 2014. The articles which saw the extraordinary raised stamp duty include various agreements (from Rs100 to Rs1,200), five different types of contacts (from Rs100 to Rs1,000) and partnership deal (from Rs100 to Rs200 and Rs500 to Rs1,000 according to the amount involved).

Regarding the registration of some immoveable property (sale deeds), there are a number of taxes on the sale deeds to be paid by the purchaser, including the stamp duty, municipal transfer fee, registration fee, sale deed per page fee, mutation fee, capital value tax (CVT) and capital gains tax (CGT).

Last year, the Punjab government had amended the Punjab Finance Act 2013. According to the previous amendment, the seller of any property would have to pay CGT on the acquisition of property (gained in inheritance) by 5pc if he/she sold the property a year of the acquisition, 4pc after two years, 3pc after three years, 2pc after four years and 1pc if sold after four years but less than five year.

In the current provincial budget, the government has again amended the finance act and the difference of CGT according to period after the acquisition has been washed away. Instead, the CGT has to be paid according to value of the property regardless of the period of acquisition and the amount of the CGT has been fixed at 1pc if the seller is a tax payer with national tax number (NTN) and 2pc in case of a person without an NTN.

After the provincial budget implemented from July 1, 2014, the functioning of the local revenue offices of all the three tehsils of the district has been affected as there is no clarity among the officials regarding various taxes enhanced in the provincial budget. The property dealers, stamp venders and sale deeds scriber have urged the Punjab government to review the burdensome taxing on the property sale and purchase.

Published in Dawn, July 22nd , 2014