ByThe Federal Board of Revenue (FBR) has been granted significant new powers under the Tax Laws (Amendment) Bill 2024. One of the most notable provisions is the introduction of Section 14AD, which empowers the tax authorities to bar the transfer of immovable property for individuals who have failed to register for tax purposes.
What Does Section 14AD Mean for Property Owners?
Section 14AD allows the Commissioner of Inland Revenue to issue a written order to the property registering authority, such as the sub-registrar, to halt the transfer of property belonging to a non-registrant. This means that if an individual has not obtained a National Tax Number (NTN) or has not filed their income tax return, they may face difficulties in selling or transferring their property.
The Process of Restricting Property Transfers:
- Identification of Non-Registrants: The FBR will identify individuals who have not registered for tax purposes.
- Issuance of Barring Order: The Commissioner will issue a written order to the property registering authority.
- Imposition of Bar: The property registering authority will then refuse to register any property transfer involving the non-registrant.
Lifting the Bar:
Once the individual obtains the necessary tax registration and complies with their tax obligations, the Commissioner can issue an order to lift the bar on property transfers. This process is typically completed within two working days.
Implications for Property Transactions:
This new provision has several implications for property transactions in Pakistan:
- Delayed Property Transfers: Non-registrants may face delays in completing property transactions.
- Increased Scrutiny: Property registrars will be more vigilant in verifying the tax status of individuals involved in property deals.
- Potential Legal Issues: Non-compliance with tax laws can lead to legal consequences, including penalties and fines.
To avoid such issues, it is crucial for property owners to ensure that they are registered with the FBR and have fulfilled their tax obligations. By complying with tax laws, individuals can protect their property rights and avoid potential legal hurdles.
