Property buyers and sellers in Punjab are now confronting a new challenge as authorities begin enforcing penalties for immovable property transactions conducted outside the banking system.
This comes in the wake of heightened taxation and revised property valuations introduced by the Federal Board of Revenue (FBR).
Under Section 75A of the Income Tax Ordinance, 2001, a 5% penalty applies to non-banking transactions involving immovable property if the fair market value exceeds Rs5 million or, in the case of other assets, Rs1 million. Industry insiders note that this measure is adding to the compliance burden for both buyers and sellers.
The Punjab Board of Revenue has recently directed sub-registrars, assistant directors of the Land Records Authority, and transfer officers to enforce the recovery of penalties for such transactions. During a pre-Public Accounts Committee (PAC) meeting, chaired by the Senior Member of the Board of Revenue, Punjab, concerns were raised about withholding agents’ failure to collect these penalties. Authorities expressed dissatisfaction and instructed field officers to ensure compliance.
The Punjab Revenue Board has stressed that the responsibility for enforcing these penalties lies with sub-registrars, assistant directors of Land Records, and transfer or attesting officers. Officials who fail to enforce compliance will face accountability measures.
This directive aims to strengthen tax enforcement, curb evasion within the real estate sector, and ensure adherence to the provisions of the Income Tax Ordinance, ultimately safeguarding government revenues.
