TAX ON PROPERTY PURCHASE AND RESALE

[haroon]

A salaried person purchases a house for own residence and then re-sells it after a few months as a good offer is received.Is this Profit on reselling considered as taxable income?. If YES under what section/clause?.If NO then further consider the following example.

The same person buys a new house and a few months latter he again receives a good offer for the second home and re-sells it at a handsome profit. In this situation as he has resold 2 properties at profit wikk this be considered as business ets? and chargeable to tax along with the profit from first transaction?.

[zubair]

are you looking for an answer under pakistans tax laws or UK tax laws.

[haroon]

I want the answer under the Pakistani LAw ITO 2001

[n/a1]

zubair bhai give him information.............by the way ....... how did you presume that he was talking about UK law

[zubair]

Quite often, I find people discussing UK tax laws cuz, they are ACCA students. I myself specialise in UK tax laws.
Ok here is my opinion.

Tax has alwasys been a grey area. Thats where we fight with Revenue and earn our fees.
But the scanerio under discussion is pretty much clear. There is no Capital Gains Tax (CGT) on buying and selling of house used by tax payer as his main and only residence (becuase of the PRR - Private residence relief).

Selling one house buying the second one and then selling the second one again no CGT... if the Revenue attempts to tax it,..block the atempt and you will win.

NExt stage is if it becomes habitual to buy houses for living and selling ,,, a good tax expert can help you escape CGT under law.

It is next to impossible to start buying and selling houses and remain self employed under schedule D case 1.... this activity will not come under schedule D, it will come under Investment income causing great problems of CGT.

[Sarfaraz]

yaar yahan par exemption milli hai to aap ne mazaq hi bana liya hai
arz kia hai

log toot jate hain aik ghar banane main
tum taras nahin khate bastian jalane main


agar aap itne ziada ghar badlain gain to aap ki ghar wali aap ko khud hi pooch le gee cbr wale to baad ki baat hai<img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle>

There is a will there is a way.