The federal cabinet has approved an ordinance for construction industry under which special tax incentives will be given to builders and land developers. The implementation of the tax incentives will begin with the issuance of the ordinance, after which no question regarding source of income will be asked for investment in construction projects.
Under the ordinance, Builders & Land Developers will have to deposit this capital in bank accounts by December 31, however, Builder & Land Developers will be able to withdraw capital from bank accounts and use it in construction projects.
Builders and Land Developers will be able to use this capital through cross-cheque by September 30, 2022, while under the ordinance, builders and land developers will be exempt from income tax and capital gains tax.
The ordinance for construction industry will apply to projects completed by September 2022, and under the ordinance, builders and land developers will be exempt from the withholding tax on cement and other materials, while the construction sector will receive industry status. A new tax scheme will be introduced.
In addition, the ordinance passed by the Federal Cabinet also states that the investment in the New Pakistan Housing Scheme will be 90% tax deducted and capital gains tax will not be applicable for selling the house.
According to the ordinance, the Construction Industry Development Board will be established. It may be recalled that a few days ago, Prime Minister Imran Khan announced special concessions for the construction industry.