The budget for the year 2023 has brought a wave of positive news for the construction industry, as the government aims to stimulate economic development and encourage construction activities. This blog will explore the tax reliefs and incentives announced in the budget to benefit builders, individuals, and other sectors.
Extension of Income Tax Exemption for REITs Schemes
Real Estate Investment Trusts (REITs) schemes have been granted an extended income tax exemption until June 30, 2024. This move aims to encourage investment in the real estate sector and provide long-term benefits to investors.
Tax Relief for Builders
Acknowledging the crucial role of builders in the construction industry, the government has introduced tax relief measures. Builders will now enjoy a tax relief of 10 percent or up to Rs. 5 million on their business income for the next three years. This incentive aims to promote construction activities and support builders in their projects.
Tax Relief for Individuals:
Individuals involved in construction projects will also receive significant tax relief. They will enjoy a tax exemption of 10 percent or up to Rs. 1 million for the next three years. If you start construction in Park View City Islamabad, you will get good relief in construction. This relief applies to construction projects initiated after July 1, 2023. It encourages individuals to invest in new construction ventures and boosts economic growth.
Extension of Concessional Tax Rate for Banks
The government introduced a lower tax rate for banks lending to these sectors to boost construction, agriculture, and SMEs. Initially set for 2020-2023, the scheme taxed such income at 20% instead of 39%. Good news: the government plans to extend this tax rate for two more years until 2025. This will encourage banks to provide favorable loans and support these industries. For more details and good real estate projects, contact Real Estate Consultant for a better future.
Conclusion
The budget for 2023 has introduced several tax exemptions and reliefs to boost the construction industry and stimulate economic growth. Builders and individuals undertaking construction projects will benefit from the tax relief measures, encouraging investment and development in the sector. Additionally, extending the concessional tax rate for banks supporting the construction industry, agriculture, and SMEs will provide further impetus to these sectors. These initiatives are crucial to fostering the country's thriving and resilient real estate and construction industry.
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