The government will allow unconditional investment of undisclosed money in the real estate sector in a bid to boost investment and bring the undisclosed money into the economy in face of the economic setback caused by the coronavirus pandemic.
Towards this direction, the government is going to bring a change in income tax ordinance by adding a new section in the finance bill for the budget for 2020-21 fiscal.Sources at National Board of Revenue (NBR) and Finance Ministry said the volume of undisclosed or untaxed money is gradually rising every year and this is a high time that the money is brought to the mainstream economy.
Under the new section (19-AAAAA) in the income tax ordinance, investors will have to pay different amounts of taxes to invest undisclosed money depending on the location of real estate properties.
For lands situated in Gulshan Model Town, Banani, Baridhara, Motijheel Commercial Area and Dilkusha Commercial Area of Dhaka, the investors will have to pay Tk 20,000 tax per square meter.
Tk 15,500 will have to be paid as taxes for the land situated in Dhanmondi, Defence Officers Housing Society (DOHS), Mahakhali, Lalmatia Housing Society, Uttara Model Town, Bashundhara, Dhaka Cantonment, Sidheshwary, Kawran Bazar, Bijaynagar, Wari, Segunbagicha, Nikunja of Dhaka, and Panchlaish, Khulshi, Agrabad and Nasirabad Area of Chittagong.
For land situated in the area of a Paurasabha or any district headquarters, the investors of undisclosed money will have to pay Tk 1500 on per square meter while Tk 500 will need to be paid as tax for lands situated in the other areas of the country while investing undisclosed money.
Tk 4,000 will be levied on per square meter for building or apartment, the plinth area of which does not exceed two hundred square meters, situated in Gulshan, Banani, Baridhara, Motijheel and Dilkusha of Dhaka.Tax amounting Tk 3000 on per square meter will be imposed for building or apartment, the plinth area of which does not exceed two hundred square meters, in Dhanmondi, DOHS, Mohakhali, Lalmatia, Uttara, Bashundhara, Dhaka Cantonment, Sidheshwary, Kawran Bazar, Banasree, Bijaynagar, Wari, Segunbagicha, Nikunja of Dhaka, and Panchlaish, Khulshi, Agrabad and Nasirabad Area of Chittagong.
In the new provision, no question as to the source of any undisclosed movable property and immovable property shall be raised by any authority if an individual assesses pays, before the submission of return.
Real estate sector is the biggest sector in the country’s private sector where 6 million workers have been involved.
Besides, 20,000 construction managers, 10,000 diploma engineers, 3,000 undergraduate engineers and about 500 architects are also employed in the real estate sector.
Around 458 types of industries are directly linked to the real estate sector. These sub-sectors including brick, sand, rod, cement, construction, glass, aluminium, cable, lighting and many others large and small industries are in the brink of collapse due to a slump in demand amid the Covid-19 crisis.
Owing to the fact, housing and real estate entrepreneurs have suggested allowing investment of undisclosed money in the real estate sector to mobilize revenue and investment.
Encouraging investment in the housing sector would result in huge infrastructure development that will ultimately discourage the money flight abroad.