ISLAMABAD: The National Assembly on Wednesday approved an amnesty scheme for the realty sector by allowing the buyer to clean up their huge undeclared transaction amount.

The amendment to the income tax law was approved by the lower house amid boycott of the session by the opposition parties.

“The bill is acceptable to all stakeholders, including real estate agents, builders and developers and even the tax collection body,” said Qaiser Ahmed Sheikh, chairman of the National Assembly’s Standing Committee on Finance.

The amendment removes a gap between the basic rates at which most of the registries are signed at the deputy commissioner’s office (called DC rates) and the valuation by the Federal Board of Revenue (FBR) determining the price of the property.

The bill approved by the assembly states that the formula for computing the amount is ‘A-B’, where ‘A’ is the value of the immovable property determined by the valuators of the FBR, and ‘B’ is the value recorded by the authority registering or attesting the transfer, which is the deputy commissioner’s office.

However, this formula will be applicable only if the value A is higher.

The buyer of the property will have to pay three per cent of the difference between the A and B, and the FBR will not ask about the source of their income.

“Under the amnesty scheme those worried about disclosing their source of income will be exempted from this query after they pay the three per cent tax on differential,” Mr Sheikh said.

“The government will also benefit as the buyer will become a filer. The FBR is happy because they are getting this three per cent tax from a sector which was paying nothing.”

Published in Dawn, December 1st, 2016