The Punjab government has announced the recovery of a 5% penalty on immovable property purchases made through non-banking transactions, as mandated under the Income Tax Ordinance 2001. The decision aims to enforce compliance with tax regulations and ensure proper documentation of property transactions.

The Board of Revenue (BoR) Punjab has issued a formal directive to the Registrar Cooperative Societies, Punjab, the Director General of the Punjab Land Records Authority, and District Registrars, as well as Deputy Commissioners across the province.

The letter highlights the legal requirement under Section 75A of the Income Tax Ordinance 2001, which stipulates a 5% penalty on property purchases made through non-banking channels if the fair market value of the property exceeds Rs. 5 million, or in the case of other assets if the value exceeds Rs. 1 million.

During a pre-Public Accounts Committee (PAC) meeting chaired by a Senior Member of the Board of Revenue, it was observed that sub-registrars, assistant directors of Land Records, and transferring officers, who act as withholding agents, had failed to collect the penalty on non-banking transactions. The authorities expressed dissatisfaction over the lack of compliance and directed field officers to ensure the recovery of penalties as per the law.

The BoR’s letter instructed all sub-registrars, assistant directors of Land Records, and transferring/attesting officers to strictly enforce the penalty on non-banking transactions. It further warned that failure to collect the penalty would hold the responsible officer accountable. The directive aims to streamline property transaction processes and ensure adherence to the Income Tax Ordinance.