For new construction projects the maximum estimated project life has been extended as from 2.5 years to more as 3.5 years that is for the developers and builders under the Income Tax Ordinance, 2021.
However, sharing the salient features of this recent promulgated ordinance, Mr Asif S Kasbati, leading tax expert of Karachi and the ICAP Fiscal Laws Committee Members just highlighted that this construction release scheme is not applicable for the Tax of the Year 2020, after the declaration of Income Tax Ordinance (Amendment) of 2021.
First purchaser of the building or of a single unit of the building will get the immunity from this new project or the existing project that are subject to the full or the remaining payments have been extended like from 30, September, 2020 to 31, March, 2023 under the Income Tax Ordinance(Amendment), 2021.
He also said that the significant changes are made in the section of 100D and in 11th Schedule. In the section of 100D the special provisions that are relating to the builders and also the developers are following amendments:
(a) For new project completion the completion deadline has been extended just from 30, Sept, 2022 to 30 Sept, 2023.
(b) For an incomplete project that currently exists the completion date of it has been extended for 1 year from 30, September, 2022 to 30, September, 2023.
(c) Tax Year of 2020 income, the profits as well as the gains of any builder or the developer of any incomplete existing project that was earned for that the Amnesty will surely not be applicable.
For developers and the builders, the deadline has just been extended from 30th Sept 2022 to 30th Sept 2023 that is for a certification of the grey structure for these builders and landscapes in the case of the developer.
Deadline for the developer for their certification from a firm is at least 50% of the plots that have been booked like for sale and at least 40% of the sale that proceeds to have received, has also been extended from 30th Sept 2022 to 30 Sept 2023.
As for the amendments that are in the Eleventh Schedule, the Kasbati clearly highlighted that for the new projects, project life that is estimated to maximum has been extended like for 1 year that is from 2.5 years to total 3.5 years.
However for the existing projects, estimated project life to maximum has been extended for 1 year that is from three years to the maximum of four years. Any builder or the developer can now easily electronically register the project on the IRIS through the website of FBR by 31st December 2021.
