Punjab to Impose Huge Penalty on Property Transactions Done Without Banks

The Punjab government has decided to recover a 5 percent penalty from immovable property purchases made through non-banking transactions within the Punjab under the Income Tax Ordinance 2001. The issue is related to the collection of penalty chargeability under the Income Tax Ordinance 2001 on the purchase of property through non-banking transactions. Board of Revenue of Punjab has written a letter addressed to the Registrar Cooperative Societies, Punjab, and Director General, Punjab Land Records Authority and District Registrars, Deputy Commissioners in Punjab. According to the letter, under Section 75A of the Income Tax Ordinance, 2001 read with entry no 21 of Chapter X, a penalty at the rate of five percent shall be charged in case of the purchase of property through non-banking transaction if the value of immovable property having fair market value is greater than five million rupees or any other assets having fair market value more than one million rupees. The letter said that during a pre-PAC meeting held under the chairmanship of a Senior Member, the Board of Revenue, Punjab to review the progress of compliance on proposed draft paras, it was observed that the sub-registrars, assistant directors of Land Records and transferring officers as withholding agents have not collected the penalty on non-banking transactions. The concerned authorities showed their displeasure over the non-recovery of penalty on such transactions and directed them to circulate instructions to all the field formations to collect the requisite penalty. The Board of Revenue of Punjab’s letter said that the instructions have been issued to all the sub-registrars, assistant director Land Records, and transferring/ attesting officers working under respective jurisdictions to collect the penalty in case of non-banking transactions as per cited law. In case of failure to collect the penalty chargeable on non-banking transactions the concerned transferring attesting officer shall be responsible, the letter added.