Prepared By:

Nadeem Butt (FCA)

Chartered Accountant
• Chairman LTBA - Tax Academy (2019-20, 2018-19 & 2017-18)
• Vice Chairman LTBA - Tax Academy (2016-17)
• Member Sales Tax, Finance & Taxation Committee LCCI (2020, 2019 & 2018)
• Member ICAP Publications Committee (2017-18)
• Member Practice Support Committee of NRC ICAP (2019 & 2018)
•Financial Advisor of DAWAT -E- ISLAMI
• 25+ years experience as professional Author & Teacher of Taxation

Taj Arcade, 3rd Floor, Office # 06, Opposite Services Hospital, 73-Main Jail Road, Lahore – Pakistan
Ph: +92-42-35408635-36, Fax: +92-42-35408641 Mob: 0333 / 0301-4245240
E-mail: nbco2007 @ yahoo / gmail / hotmail.com website: www.nbandco.com
TAXES UPDATES

PRESENTER: NADEEM BUTT (FCA,FPFA)

Member Sales Tax, Finance & Taxation Committee LCCI (2020, 2019 & 2018)
Chairman LTBA - Tax Academy (2020, 2019 & 2018)
Principal : Institute of Taxation & Finance
CELL: 0333 4245240

Ph: +92-42- 35408638

[email protected]
www.itfpakistan.com

2
 An
ORDINANCE
further to amend certain tax laws
PARTICULARS
WHEREAS, the COVID-19 pandemic has created a worldwide crisis due to
which industries, businesses, offices, services have been shut down in
Pakistan and economic activity is at a stand-still;

And WHEREAS, the said situation has adversely affected Pakistan’s economy
and all segments of its society and population are suffering economic
hardship;
And WHEREAS, in the existing circumstances, the poor and most
vulnerable segments of the population, including the daily wagers in
Pakistan are at most risk of suffering and facing danger to their livelihood;

And WHEREAS, in order to protect and revive the economy of Pakistan, it is

essential and critical to give incentives for revival of the construction industry
with certain conditions as provided for in this Ordinance;
 And WHEREAS it is expedient to amend certain
tax laws for the purposes hereinafter appearing;

And WHEREAS, the Senate and the National Assembly

are not in session and the President of the Islamic
Republic of Pakistan is satisfied that circumstances
exist which render it necessary to take immediate
action;
EXERCISE Now, THEREFORE, in exercise of the powers conferred
OF POWERS
U/C (1) OF by clause (1) of Article 89 of the Constitution of the
ARTICLE 89 Islamic Republic of Pakistan, the President of the
OF THE
CONSTITUTI Islamic Republic of Pakistan is pleased to make and
ON promulgate the following Ordinance: —
 Construction industry: Ordinance
promulgated
SR. PARTICULARS LINK
1. Short title and commencement 1. Short title and
commencement
2. Amendment in Definition of industrial undertaking for builders & Amendment in
developers to the extent of import of plant & machinery [Section
2(29C)]
Definition of
industrial u...
SPECIAL PROVISIONS RELATING TO BUILDERS AND Slide 11
DEVELOPERS [Section 100D]
3. In the First Schedule, in Part IV, in Division VIII, the following Slide 26
proviso shall be added, namely:-
Provided that in case of immovable property sold by auction, the rate of collection
of tax under this section shall be 5% of the gross sale price
4. In the Second Schedule,– in Part I, after the omitted clause Slide 27
(114A), a new clause shall be inserted, namely:– (114AA)
Exemption on capital Gain to resident individual on sales of residential
property subject to fulfillment of pre-conditions
(b) in Part III, after clause (9A), the following new clause shall Slide 28
be inserted, namely:-
Reduction in tax liability for developed or approved low cost
housing projects by 90%
5. ELEVENTH SCHEDULE Slide 30
RULES FOR COMPUTATION OF PROFITS & GAINS OF BUILDERS &
DEVELOPERS AND & PAYABLE THEREON
 1. Short title and commencement
Sr. HEADING PARTICULARS

1. TITLE OF
THE This Ordinance shall be called the Tax
ORDINANCE
Laws (Amendment) Ordinance, 2020.

2. APPLICATIO
N OF THIS It shall come into force at once.
ORDINANCE
Amendments in the Income Tax Ordinance, 2001
(Ordinance XLIX of 2001)

In the Income Tax Ordinance, 2001 (XLIX of 2001), the

following further amendments shall be made, namely:—
 Amendment in Definition of industrial undertaking
for builders & developers to the extent of import of
plant & machinery
HEADING PARTICULARS
New sub (1) in section 2, in clause (29C),–
clause added
in section (a) in sub-clause (a), in para (iv), the word "and" shall be
2(29C) omitted; and
(b) after sub-clause (a), amended as aforesaid, the
following new sub-clause shall be inserted, namely,–
"(aa) from the 1st day of May, 2020, a person directly
involved in the construction of buildings, roads,
bridges and other such structures or the development
of land, to the extent and for the purpose of import of
plant and machinery to be utilized in such activity,
subject to such conditions as may be notified by
the Board; and ";
100D. SPECIAL PROVISIONS RELATING TO
BUILDERS AND DEVELOPERS
HEADING PARTICULARS
TO WHOM (1) For tax year 2020 and onwards, the tax payable by a builder or a developer,
AVAILABLE
as defined in sub-section (9), who opts to pay tax under this section shall be
computed and paid in accordance with the rules in the 11th Schedule on a
project by project basis on the income, profits and gains derived from the
sale of buildings or sale of plots, as the case may be, from–
a) a new project to be completed by 30-9-2022; or
b) an incomplete existing project to be completed by 30-9-2022:
Taxability Provided that any income, profits and gains of a builder or developer of
of profits &
gains of
an incomplete existing project earned up to tax year 2019 shall be subject to
builders & the provisions of the Ordinance as were in force prior to the commencement
developers of the Tax Laws (Amendment) Ordinance, 2020:
up to tax
year 2019
Taxability Provided further that any income of a builder or developer other than
of any other income, profits and gains subject to this section shall be subject to tax as per
income of
builders &
the provisions of the Ordinance.
developers
(2) Where sub-section (1) applies, —
HEADING PARTICULARS
The income shall not a) the income shall not be chargeable to tax under any head of
be taxable under any
HOI
income in computing the taxable income of the person;
No deduction of any b) no deduction shall be allowed under the Ordinance for any
expenditure shall be
allowed
expenditure incurred in deriving the income;
Income shall be not c) the amount of the income shall not be reduced by —
reduced by any
deductible allowance (i) any deductible allowance under Part IX of Chapter III; or
or set off of any loss
(ii) the set off of any loss;
No tax credit shall be d) no tax credit shall be allowed against the tax payable under sub-
allowed except tax
paid u/s 236K on
section (1) except credit for tax under section 236K collected
purchase of from the builder or developer after the commencement of the Tax
immoveable property Laws (Amendment) Ordinance, 2020 on purchase of
after the application immoveable property utilized in a project;
of this Ordinance
No refund of any tax e) there shall be no refund of any tax collected or deducted under
collected or
deducted under the
the Ordinance;
Ordinance
Non payment or f) if the tax payable has not been paid or short paid, the said
short payment shall
be recovered
amount of tax may be recovered and all the provisions of the
Ordinance shall apply accordingly; and
Minimum tax and g) sections 113 and 113C shall not apply on the turnover, income,
 HEADING PARTICULARS

Non (3) The provisions of section 111 shall not apply

application
of section to capital investment made in a new project
111 on under clause (a) of sub-section (1) in the form of money
capital or land, subject to the following conditions,
investment
by an namely:–
individual (a) if the investment is made by a builder or
developer being an individual –
In case of i) in the form of money, such builder or developer shall
money
invested open a new bank account and deposit such amount
in it on or before the 31st day of December, 2020; or

In case of ii) in the form of land, such builder or developer

land
invested shall have the ownership title of the land at the
time of commencement of the Tax Laws
(Amendment) Ordinance, 2020;
 HEADING PARTICULARS
Formation as 3(b) if the investment is made by a person in a project through a
single object company or an association of persons (AOP),–
company or
i. such company or AOP shall be a single object (builder or
AOP with SECP
or formation of developer) company or AOP registered under the Companies
AOP with ROF Act, 2017 (XIX of 2017) or the Partnership Act, 1932 (IX of 1932),
for non as the case may be, after the date of commencement of the
application of Tax Laws (Amendment) Ordinance, 2020 and before the 31st day
section 111 on of December, 2020; and
capital
ii. the person shall be a member or shareholder of such AOP or
investment
company, as the case may be;
In case of and if the capital investment is made,–
money
invested i. in the form of money, such amount shall be invested through a
crossed banking instrument deposited in the bank account of
such AOP or company, as the case may be, on or before the 31-12-
2020; or
In case of ii. in the form of land, such land shall be transferred to such AOP or
land invested company, as the case may be, on or before the 31-12-2020:
Title of land Provided that the person shall have the ownership title of the land at
to be in the the time of commencement of the Tax Laws (Amendment)
name of Ordinance, 2020;
person
 HEADING PARTICULARS
SUBMISSION OF (c) a person making an investment under clause (a) or (b) shall submit a
PRESCRIBED
FORM ON IRIS prescribed form on IRIS web portal;
MONEY OR LAND d) the money or land invested under clause (a) or (b) shall be wholly
INVESTED SHALL
BE USED utilized in a project; and
WHOLLY IN THE
PROJECT
MANNER FOR e) completion of the project shall be certified in the following
CERTIFICATION
OF COMPLETION manner, namely:-
OF PROJECT

In case of builder i. in case of a builder, the map approving authority or NESPAK

certification of shall certify that grey structure as per the approved map has
grey structure as
per approved Map been completed by the builder on or before the 30-9-2022; and

In case of ii. in case of a developer,–

Developer A. The map approving authority or NESPAK shall certify that
certification of
landscaping, 50% landscaping has been completed on or before the 30-9-2022;
of plots booked B. a firm of chartered accountants having an ICAP QCR rating of
for sale and 40%
of sale proceeds ‘satisfactory’, notified by the Board for this purpose, shall certify
received and 50% that at least 50% of the plots have been booked for sale and at least
of roads laid up
to sub-grade level 40% of the sale proceeds have been received by the 30-9-2022;
and
C. at least 50% of the roads have been laid up to sub-grade level as
certified by the approving authority or NESPAK.
 (4) The provisions of section 111 shall also not
apply to [following (a) and (b) cases]
HEADING PARTICULARS
FIRST
PURCHASER
4(a) the first purchaser of a building or a
OF A unit of the building purchased from the builder in
BUILDING
OR A UNIT respect of purchase price of the building or unit of the
OF THE
BUILDING building subject to the following conditions, namely:–
IN CASE
THE
i. full payment is made through a crossed banking
PURCHASE instrument to the builder during a period starting
IS FROM A
NEW from the date of registration of the project with the
PROJECT
Board under this section and ending on 30-9-2022;
and
IN CASE
THE
ii. Full or balance amount of payment is made
PURCHASE through a crossed banking instrument to the builder
IS FROM AN
EXISTING during a period starting from the date of registration
INCOMPLET
E PROJECT of the project with the Board under this section and
ending on 30-9-2022; and
 The provisions of section 111 shall also not apply to
4(b) the purchaser of a plot who intends to
construct a building thereon, if –
HEADING PARTICULARS
Purchase of
plot, full i. the purchase is made on or before the 31-
payment
through
12-2020;
crossed
banking
ii. the full payment is made on or before 31-
instruments
and
12-2020 through a crossed banking
constructio instrument;
n to be
started on iii. construction on such plot is commenced on
or before
31-12-2020 or before the 31-12-2020;
Deadline for
completion
iv. such construction is completed on or before 30-9-
of 2022; and
constructio
n and v. the person registers himself with the Board on the
registration online IRIS web portal.
with the
Board
 HEADING PARTICULARS
Value or price
of land or (5) Where sub-section (3) or (4)
building for sub
section (3) & apply, the value or price of land or
(4) above
building, as the case may be, shall be
the higher of clause (a) or (b) below:–
130% of FMV
as determined
a) 130% of the FMV as determined by
by FBR the Board under sub-section (4) of
section 68; or
Lower of the
values as b) at the option of the person making
determined by
at least two investment, the lower of the values as
independent
valuers opted
by the person
determined by at least two
from the
approved list of
independent valuers from the list of
valuers by SBP
valuers approved by the SBP.
(6) Sub-sections (3) and (4) shall not apply to –
HEADING PARTICULARS

(a) holder of any public office as defined in the

Immu Voluntary Declaration of Domestic Assets Act, 2018
or his benamidar as defined in the Benami
nity Transactions (Prohibition) Act, 2017 (V of 2017) or
his spouse or dependents;
shall (b) a public listed company, a real estate investment
not trust or a company whose income is exempt under
any provision of the Ordinance; or
be (c) any proceeds derived from the commission of
a criminal offence including the crimes of money
availa laundering, extortion or terror financing but
excluding the offences under the Ordinance.
ble to
 HEADING PARTICULARS

Exemption
to
(7) Dividend income paid to a
recipient person by a builder or
of dividend
income developer being a company
from such
company
out of the profits and gains
being as derived from a project shall be
builder or
developer exempt from tax.
HEADING PARTICULARS
THE RETURN
OR (8) Notwithstanding anything contained in
DECLARATIO
N SHALL BE this section or the 11th Schedule, where a return
VOID, IF THE
SAME IS ON or declaration has been made through
ACCOUNT OF
MISREPRESE misrepresentation or suppression of facts, such
NTATION OR
SUPPRESSIO return or declaration shall be void and all the
N OF FACTS
provisions of the Ordinance shall apply:
No action if
misreprese
Provided that no action under this sub-
ntation is a
bona fide
section shall be taken if such misrepresentation
mistake has been made on account of a bona fide
mistake:
No action
without
Provided further that no action under this
opportunity
of being
sub-section shall be taken without providing an
heard and opportunity of being heard and without prior
without the
approval of approval of the Board.
FBR
 (9) In this section,–
Sr. HEADING PARTICULARS

a. Builder means a person who is registered as a

builder with the Board and is engaged in
the construction and disposal of
residential or commercial buildings;
b. Capital means investment as equity resources and
investment
does not include borrowed funds;
c. Developer means a person who is registered as a
developer with the Board and is engaged
in the development of land in the form of
plots of any kind either for itself or
otherwise;
Sr. HEADING PARTICULARS

d. Existing means a construction or development project,

project which
i. has commenced before the date of
commencement of the Tax Laws (Amendment)
Ordinance, 2020;
ii. is incomplete;
iii. is completed on or before the 30-9-2022; and
iv. a declaration is provided in the registration
form under 11th Schedule to the effect of
percentage of the project completed up to the
last day of the accounting period pertaining
to tax year 2019;
e. First means a person who purchases a building or a unit,
purchaser
as the case may be, directly from the builder and
does not include a subsequent or a substituted
purchaser;
Sr. HEADING PARTICULARS

f. New means a construction or development project, which –

project
i. is commenced during the period starting from
the date of commencement of the Tax Laws
(Amendment) Ordinance, 2020 & ending on 31-
12-2020; and
ii. is completed on or before the 30-9-2022;

g. Project means a project for construction of a building with

the object of disposal, or a project for development
of land into plots with the object of disposal or
otherwise;
h. Register means registered after submission of form on
ed with project-by-project basis on the online IRIS web
the
Board
portal;
Application of all other consistent provisions
related to builders & developers of the ITO, 2001
that are not dealt here

(10) The provisions of the Ordinance not

specifically dealt with in this section or
the rules made there under shall apply
mutatis mutandis to builders and
developers in so far as they are not
inconsistent with this section or the rules
made there under.”;
(3) In the First Schedule, in Part IV, in
Division VIII, for full stop at the end a colon shall
be substituted by a colon; and thereafter the
following proviso shall be added, namely:-
“Provided that in case of immovable property sold by
auction, the rate of collection of tax under this section
shall be 5% of the gross sale price.”;
Comment: The rate of collection of tax u/s 236A shall
be 5% instead of 10% for sale of immoveable property
by auction.
(4) In the Second Schedule,–
Exemption on capital gain to resident individual on
sales of constructed residential property subject to
fulfillment of pre-conditions
(a) in Part I, after the omitted clause (114A), the following new
clause shall be inserted, namely:–
“(114AA)Any income chargeable under the head “capital gains” derived
by a resident individual from the sale of constructed
residential property:
Provided that exemption under this clause shall only apply, if –
a) at the time of sale, the residential property was being used
for the purpose of personal accommodation by the resident
individual, his spouse or dependents and for which any of the
utility bills is issued in the name of such individual;
b) the land area of the property does not exceed 500 Sq yards in case
of a house and 4000 square feet in case of a flat; and
c) exemption under this clause has not previously been availed
by the individual, his spouse or dependents.”; and
Reduction in tax liability for developed or
approved low cost housing projects by 90%
(b) in Part III, after clause (9A), the following
new clause shall be inserted, namely:-

“(9B) The tax payable on the income, profits and gains of

projects of ‘low cost housing’ developed or approved
by Naya Pakistan Housing and Development
Authority (NAPHDA) or under the Ehsaas
Programme shall be reduced by 90%.”;
(5) after the Tenth Schedule, the following new Schedule
shall be inserted, namely:–
 ELEVENTH SCHEDULE
RULES FOR COMPUTATION OF PROFITS & GAINS OF BUILDERS &
DEVELOPERS AND & PAYABLE THEREON
SR. PARTICULARS LINK
1. Eligibility Slide 29

2. Scope and payment of tax Slide 30

3. Registration and filing of return Slide 32
4. Certification Slide 33
5. Advance tax Slide 34
6. Incorporation of profits and gains for computation of Slide 35
income
7. Exemption from withholding of tax under sections Slide 36
150 and 153
8. Restriction on change in pattern of ownership of Slide 37
a builder or developer before completion of a
project
9. Definitions Slide 38
10. Rate and computation of tax liability Slide 44
(5) after the Tenth Schedule, the following new
Schedule shall be inserted, namely:–

“ELEVENTH SCHEDULE
[See section 100D]
RULES FOR COMPUTATION OF PROFITS AND
GAINS OF BUILDERS AND
DEVELOPERS AND TAX PAYABLE THEREON
1. Eligibility.

These rules shall apply to projects undertaken by

builders and developers under section 100D.
2. Scope and payment of tax

(1) Income computed and tax payable thereon shall be

on Project-by-Project basis which shall be computed
and paid at the rates provided in rule 10.
 Computation / payment of annual tax liability )

Sr. HEADING PARTICULARS

2a. Formula to The above-referred rates shall be applicable for computing tax
compute
annual tax
liability for the project on annual basis. The annual tax liability
liability shall be worked out as under:
Tax liability as per the rates in rule 10
Estimated project life in years
2b. For new projects Estimated project life
The estimated project life for tax purposes shall not exceed two
and a half (2.5) years:
For existing
incomplete
projects up to Tax Provided that in case of existing incomplete projects, the
year 2019
estimated project life shall be treated as 3 years from tax year 2020
through tax year 2022, and the tax payable shall be reduced by the
percentage of completion up to the last day of the accounting
Tax liability for period pertaining to tax year 2019 as declared in registration form:
tax year 2020 to
be paid with the Provided further that tax liability of tax year 2020 shall be paid
ITR
along with return.
2c. Year will include Year shall include fraction of a year; and
fraction of a year

2d. Tax paid under The tax liability so calculated and paid shall be final tax.
this section shall
be final
 3. Registration and filing of return
Sr. HEADING PARTICULARS

1. Deadline for A builder or developer shall electronically register a project on

electronic IRIS through FBR website on or before 31-12-2020 through
registration & submission of –
furnishing of
a) registration form as may be prescribed which shall include,
information
inter alia, details of a member or shareholder of a builder or
developer, as the case may be:
If a developer is Provided that a developer who is also a builder in case of a
also a builder
then furnish two project shall submit two separate forms for registration as a
separate forms developer and as a builder; and
for registration
Filing of b) an irrevocable option to be assessed under this
irrevocable
option for each
Schedule in respect of each project.
project

2. Electronic A builder or developer availing this scheme shall electronically file

filing of ITR a return of income and wealth statement as may be prescribed
with WS & accompanied with evidence of payment of due tax which shall be
evidence of tax
taken for all purposes of the Ordinance to be an assessment order
payment to be
treated as issued to the taxpayer by the CIR to the extent of income
assessment computed under these rules.
order
 4. Certification
HEADING PARTICULARS
Furnishing Every builder or developer shall be required to obtain
of
certificate and provide to the Board in the prescribed manner a
to the FBR certificate from approving authority or map approving
from any of
the authority or NESPAK, as the case may be, to the
specified following effect, namely:-
persons in
respect of
applicable
information

(a) ‘total land area’ in square yards;

(b) ‘covered area’ in square feet;
(c) ‘saleable area’ in square feet; and
(d) type (commercial, residential or industrial) of
saleable area or the total land area, as the case may be.
 5. Advance tax
HEADING PARTICULARS
Payment of
advance tax
A builder or developer falling under this
u/s 147 in 4 scheme shall pay advance tax equal to 1/4th of
equal
installments
the tax liability for the year as determined in
accordance with sub-rule (1) of rule 2 in 4
equal installments in the manner laid down in
section 147 of the Ordinance.
Important
Note from
The tax under this Ordinance for the tax year
my End 2020 shall be paid with the return as stated in
second proviso of Rule 2(b) of these Rules.
6. Incorporation of profits and gains for
computation of income
HEADING PARTICULARS
Upper Cap
on
A builder or developer opting for taxation
incorporat under section 100D shall not be
ion of
profit & allowed to incorporate profits and
gains in gains accruing from such projects in
the books
of excess of 10 times of the tax paid under
account
rule 2.

Important
Note from
Excess profits over and above 10 times of
my End tax paid shall be taxable under NTR.
 7. Exemption from withholding of tax under
sections 150 and 153
Sr. HEADING PARTICULARS
1. Non The provisions of section 153 shall not apply to
application
of section builders and developers on –
153 0n (1) the purchase of building material except
purchase of steel and cement;
specified
building a) services of plumbing, electrification,
material & shuttering and other similar services other
specified than those provided by companies
services

2. Non The provisions of section 150 shall not apply

application
of section to payment of dividend exempt under sub-
150 0n section (7) of section 100D.
payment of
dividend
 8. Restriction on change in pattern of ownership of a
builder or developer before completion of a project.–
Where exemption from the provisions of section 111 has been claimed
under sub-section (3) of section 100D, the following restrictions shall
apply, namely:-
Sr. HEADING PARTICULARS
PRE
a. CONDITIONS a shareholder or a partner of a builder or developer shall not be
IN CHANGE IN
OWNERSHIP
allowed a change in ownership of an incomplete project
FOR
INCOMPLETE
except where at least 50% of the total project cost, as certified by
PROJECTS a firm of chartered accountants having an ICAP QCR rating of
‘satisfactory’, notified by the Board for this purpose, has been
incurred up to the date of change of ownership;
SUCCESSION
b. TO LEGAL The succession to legal heirs in case of deceased shareholder or
HEIRS
ALLOWED
a partner shall be allowed;
INTRODUCTIO
c. N OF NEW The additional partners or shareholders in a builder or developer
PARTNERS
AFTER
after the 31-12-2020 may join but additional partners or
DEADLINE
DATE SHALL
shareholders shall not be eligible for exemption provided under
NOT subsection (4) of section 100D.
ALLOWED
IMMUNITY
9. Definitions.– (1) In these rules, unless there is
anything repugnant in the subject or context, –
Sr. HEADING PARTICULARS

a. Area Means
(i)in case of a builder, –
a. in case of a commercial or a residential building
excluding a house, the saleable area of the
building; and
b. in case of a house, the covered area of house;

(ii) in case of a developer, the total land area of

the project;
Sr. HEADING PARTICULARS
b. Building means a residential or commercial building
or unit thereof;

c. Commerci includes any building or part thereof which

al building is to be used for commercial purposes in
accordance with the relevant laws;
Sr. HEADING PARTICULARS
d. Commence means,–
ment of i. in case of a construction project, when layout
project
plan is approved by the concerned authority;
and
ii. in case of a development project, when the
development plan is approved by the
concerned authority:
Provisionally Provided that where the builder or developer
acceptance of
project by the has taken all actions and done all things which
FBR where are required and necessary to procure any
delay beyond
30 days is not approvals but any such approval is delayed
on the part of beyond a period of 30 days from date of relevant
the Builder or
developer & application and the cutoff date of 31-12-2020 is
cutoff date is not adhered to by the builder or developer,
not adhered
the Board may provisionally accept
commencement of such project on a case to case
basis;
(e) “completion of project” means. -
Sr. HEADING PARTICULARS
i. in the case the date on which the grey structure is completed:
of a builder,

Provided that such grey structure shall only be considered as

completed when the roof of the top floor has been
laid as per the approved plan;

ii. in the case the date on which –

of a
developer,
A. at least 50% of the total plots have been booked in name
of buyers;
B. at least 40% of the sale proceeds have been received;
C. landscaping has been completed; and
D. at least 50% of the roads have been laid up to sub grade
level as certified by the approving authority or NESPAK;
(f) 'low cost housing' means a housing scheme as developed or
approved by NAPHDA or under the ‘Ehsaas Programme’;
(g) “NAPHDA” means Naya Pakistan Housing and Development
Authority;
(h) “NESPAK” means National Engineering Services Pakistan
(Private) Limited;
(i) “residential building” means a building which is not a
commercial building but does not include buildings used for
industrial purposes;
(j) “saleable area” in case of buildings, means saleable area
as determined by the approving authority or map approving
authority or NESPAK under the relevant laws;
(k) “unit” means a self-contained or independent building or
part thereof including houses, apartments, shops, offices, etc.
2. All other expressions used but not defined in these
rules shall have the same meaning as assigned to them
under the Ordinance.
10. Rate and computation of tax liability

(1) The rate of tax under section 100D shall be computed

in accordance with the Table below, namely:-
 TABLE
Rate in respect of
(1) (2) (3) (4)
Area in Karachi, Hyderabad, Sukkur, Multan, Urban Areas not
Lahore and Faisalabad, Rawalpindi, Gujranwala, specified in
Islamabad (3 Sahiwal, Peshawar, Mardan, columns (2) and
cities urban Abbottabad, Quetta (11 cities urban (3)
area) areas)
TAX ON BUILDERS
FOR COMMERCIAL BUILDINGS
Sq. Ft. - - -
Any size Rs.250 per Rs.230 per Sq. ft Rs.210 per Sq. ft
Sq. ft
FOR RESIDENTIAL BUILDINGS
Sq. Ft. - - -
upto 3000 Rs.80 per Sq. Rs.65 per Sq. ft Rs.50 per Sq. ft
ft
3000 and Rs.125 per Rs.110 per Sq. ft Rs.100 per Sq. ft
above Sq. ft
 TABLE
Rate in respect of
(1) (2) (3) (4)
Area in Karachi, Hyderabad, Sukkur, Multan, Urban Areas not
Lahore and Faisalabad, Rawalpindi, Gujranwala, specified in
Islamabad Sahiwal, Peshawar, Mardan, columns (2) and
(3 cities) Abbottabad, Quetta (11 cities) (3)
TAX ON DEVELOPERS (ENTIRE PROJECT)
Sq. Yds. - - -
Any size Rs.150 per Rs.130 per Sq. yd Rs.100 per Sq. yd
Sq. yd
FOR DEVELOPMENT OF INDUSTRIAL AREA
Sq. Yds. - - -
Any size Rs.20 per Rs.20 per Sq. yd Rs.20 per Sq. yd
Sq. yd
2) In case of mixed use buildings having both
commercial and residential areas, respective rates
mentioned above shall apply.
3) In case of development of plots and constructing
buildings on the same plots as one project, both rates
shall apply:
Provided that in the case of ‘low cost housing’ and all
projects developed by NAPHDA, the higher rates
shall apply.

DR. ARIF ALVI,

President
FURTHER POINTS
1. SALES TAX PROTECTION NOT DISCUSSED.
2. HOW MONEY FOR INCOMPLETE PROJECTES WILL
BE INVESTED AND IS PROTECTION GIVEN FROM
SECTION 111 TO THE SAME THAT IS NOT EVIDENT
FROM SECTION 3 AND 4 OF THIS ORDINANCE.
3. CHANGE IN PATTERN OF OWNERSHIP IN RULE 8
FOR INDIVIDUL BEING OWNER AND INVESTOR
HAS NOT BEEN DISCUSSED.
4. DISCUSSION ON TOTAL AREA, CONVERED AREA,
CONSTRUCTD AREA AND SALE ABLE AREA.
5. SHARE COMPUTATION OF TAX LIABILITY UNDER
THIS ORDINANCE FOR BUILDERS AND
DEVELOPERS FOR COMPLETED PROJECTS AND FOR
INCOMPLETE PROJECTES.