5% Penalty On Property Buyers in Punjab For Non-Banking Property Transactions

Property transactions in Punjab are becoming more challenging as GoP imposes 5% penalty on property buyers in Punjab for non-banking property transactions. The authorities has started the crack down on non-banking transactions to improve tax compliance and transparency in the real estate sector. Buyers and sellers of immovable properties now face a 5% penalty if they opt for non-banking methods such as cash for transactions exceeding specified thresholds.
Under Section 75A of the Income Tax Ordinance, 2001, the penalty applies when the fair market value of a property exceeds Rs. 5 million or for other assets worth more than Rs. 1 million. The move aims to curb tax evasion and ensure adherence to formal financial channels.
5% Penalty on The Property Buyers if Not Paid via Bank
پنجاب میں بنک کے بغیر جائیداد کی خریداری پر 5 فیصد جرمانہ عائد کر دیا گیا ہے، جس کا اطلاق ان لین دین پر ہوگا جن جائیدادوں کی مارکیٹ ویلیو 50 لاکھ روپے یا دیگر اثاثے کی صورت مارکیٹ ویلیو 10 لاکھ روپے سے زیادہ ہو۔
یہ اقدام ٹیکس چوری کو روکنے اور مالیاتی شفافیت کو یقینی بنانے کے لیے کیا گیا ہے۔ متعلقہ حکام کو جرمانے کی وصولی کو یقینی بنانے کی ہدایت دی گئی ہے، اور عدم تعمیل کی صورت میں ذمہ دار افسران کے خلاف تادیبی کارروائی کی جائے گی۔ مزید برآں، جائیداد کے دیگر ٹیکسز، جیسے کیپیٹل گین ٹیکس اور ایڈوانس پراپرٹی ٹیکس، کے ساتھ ساتھ وفاقی ایکسائز ڈیوٹی کے قوانین بھی سخت کر دیے گئے ہیں۔
5% Penalty on Property Buyers, Enforcement Measures in Place
The Punjab Board of Revenue has directed sub-registrars, assistant directors of Land Records, and transferring officers to enforce the collection of penalties during property transactions. Failure to collect the penalty will hold these officials accountable for non-compliance, signaling a stricter stance on tax enforcement.
In a recent pre-Public Accounts Committee (PAC) meeting, chaired by a senior member of the Board of Revenue, authorities expressed dissatisfaction over the lack of enforcement. Field officers were instructed to prioritize compliance and streamline the recovery of penalties.
Impact on Real Estate Market
The imposition of this penalty adds to the already significant tax burden faced by buyers and sellers. Key tax rates affecting property transactions now include:
Property Transaction Tax
• Filers: 15%
• Non-filers: 45%
Capital Gains Tax (CGT)
• Filers: 15%
• Non-filers: 15–45%, depending on property value
Advance Property Tax
• Up to Rs. 50 million: Filers 3%, Non-filers 12%
• Rs. 50–100 million: Filers 3.5%, Non-filers 16%
• Over Rs. 100 million: Filers 4%, Non-filers 20%
• Federal Excise Duty (FED):
• 5% duty on property transfers or allotments.
Broader Reforms in Property Taxation
The Punjab government is also considering shifting from a rental-based to a capital value-based property tax system to align with other tax frameworks like stamp duty and capital gains tax. The National Tax Council (NTC) has emphasized the need for a unified property taxation system across provinces to enhance revenue generation and streamline processes.
With the implementation of these measures, the real estate sector in Punjab faces a critical juncture, as both buyers and sellers must adapt to stricter regulations and increased financial scrutiny. These steps reflect the government’s broader strategy to promote transparency and reduce the use of informal financial channels in property dealings.
Read more about the Real Estate, Economy, Taxation, Finance, and News here.