LAHORE: The Punjab government on Wednesday increased the stamp duty from one to two per cent on urban immovable properties, and revised the one-time tax on construction of luxury houses of two kanal and above.
According to the budget document, it continued the tax relaxations of 95 per cent for registration and token tax of the electric vehicles in the proposed finance bill 2022. These steps, the government claimed, would create a fiscal space of over Rs20 billion.
According to the proposed bill, the government has increased the rate of tax on residential houses of two-kanal and above after eight years. Last time, it was revised in 2014. According to the proposed tax rate, it will be applicable on the completion of the construction of luxury houses from July 1, 2022. However, the old rates would be applied on luxury houses which submitted the completion till June 30 this year.
According to the new proposed rates, the tax rate for the Lahore District has increased to Rs300,000 per kanal to maximum 2.5 million from Rs200,000 per kanal to Rs2 million maximum on two-kanal or above with covered area more than six thousand square feet of luxury houses. For eight kanal and above with covered area more than 12,000 square feet, the new tax rate is 400,000 per kanal to maximum Rs4 million from 300,000/kanal to maximum 3.6 million.
Further, the exemptions given by the government in the past years for payment of taxes through e-payment system will continue in the tax year 2022-23. The discount equal to five per cent of the tax being paid shall be allowed on payment of tax through e-payment system. The tax paid on yearly basis or half yearly basis as the assessee may choose on the such later date as the Government may, by notification, determine; and, for financial year 2022-23, the tax shall be collected as follows, i) in first quarter with five percent rebate in the amount of annual tax; (ii) in second quarter, the amount of annual tax without any rebate; and (iii) in third and fourth quarters, the amount of annual tax with one percent surcharge per month on the gross payable tax.
The objective to increase the stamp duty is to generate revenue from multiplication in transactions and move towards parity with rates in rural areas. The rate of stamp duty is proposed to be increased from the existing rate of one per cent to two per cent in urban areas.
Published in Dawn, June 16th, 2022