%Registration of construction company as builder and developer in FBR

Salient Features of Scheme for Builders and Developers

Under Section 100D of Income Tax Ordinance 2001

• Fixed tax regime for builders and developers.
• Tax liability computed on the basis of square feet/yard, payable in quarterly installments
• New projects as well as existing incomplete project opt for the scheme upto 31.12.2020
• Projects registered with FBR online through IRIS portal
• Existing incomplete projects have to self declare the percentage of completion of project on the
relevant date
• Projects completed by 30.09.2022.
• Exemption from requirement of withholding tax on purchase of building material except cement and
steel
• Exemption from requirement of withholding tax on acquisition of services relating to construction
except those from companies
• Permission to incorporate ten times of fixed tax paid as income in the books of accounts
• 90% reduction in fixed tax liability for low cost housing
• Dividend paid by builder or developer companies shall not be liable to tax and there shall be no
withholding on the payment of these dividends.

حکومت کا اہم اقدام
تعمیراتی شعبے کے لیئے تاریخ ساز ٹیکس مراعات۔
تعمیراتی صنعت کے چلنے سے چالیس دیگر صنعتوں کا پہیہ چلتا ہے اور لاکھوں افراد کے لیئے روزگار کے مواقع پیدا ہوتے ہیں۔ #GovernmentsIncentiveforConstructionIndustry#NayaPakistan@FBRSpokesperson @MoIB_Official pic.twitter.com/Adc4POAOOE

— Govt of Pakistan (@pid_gov) July 12, 2020

Exemption from section 111 of the Income Tax Ordinance 2001, on investment made in new construction projects.

• By individual if:
• Money deposited in a new bank account upto 31.12.2020; or
• Having ownership/title of the land invested as on 17.04.2020.

• by company/AOP if:
• A single purpose company or AOP registered between 17.04.2020 and 31.12.2020
• Money invested through a crossed banking instrument upto 31.12.2020; or
• Land owned by the partner/shareholder transferred to the Company/AOP upto 31.12.2020.

Money or Land invested, utilized in the project

• Project is completed by 30.09.2022:
• In case of builder, Grey structure completed (top roof as per plan is laid)
• In case of developer:
• Landscaping completed and all roads are laid upto sub-grade level
• At least 50% plots sold and at least 40% sale receipts received

Exemption from Section 111 on purchase of:
• Plot, if:-
• plot is before 31.12.2020 (complete payment is made through banking channel before
31.12.2020)
• Construction on such plot is started before 31.12.2020 and completed before the 30.09.2022

Building, if:-
• Purchase is from a registered project and buyer is the first purchaser of the building
• Purchase made before 30.09.2022 (Complete payment is made through banking channel)

Exemption from section 111 is not available for
• Public office holders
• Public companies, REITs and companies whose income is exempt
• Proceeds of crime

“For Complete Information and consultation regarding registration of construction business in FBR under current available scheme of the PTI government, CONTACT US at: CLICK HERE for CONSULTATION”

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