The Finance Act 2023 has amended section 147 of the Income Tax Ordinance 2001 to require builders and developers to pay advance tax on a project-by-project basis. The advance tax is payable in four equal instalments, and the rates are aligned with the tax rates applicable to builders and developers who opted to be taxed under section 100D read with Eleventh Schedule.
This amendment is aimed at ensuring that builders and developers make a financial contribution towards the development of the country. It will also help to collect revenue in advance, which will be used to finance government projects.
Here are some of the key points to note about the advance tax on construction and disposal of buildings in Pakistan:
- The advance tax is payable by builders and developers who derive income from the construction and disposal of residential, commercial, and other buildings.
- The advance tax is payable in four equal instalments.
- The rates of advance tax are aligned with the tax rates applicable to builders and developers who opted to be taxed under section 100D read with Eleventh Schedule.
- The advance tax is payable on a project-by-project basis.
