08-11-2025, 11:03 AM
Someone posted CVT notice on a what’s app group, this prompted me to go through CVT law as my memory told me the CVT section is empty. So here are few points to remember:
· The CVT law is part of Finance Act 2022 and its rules were issued in September 2022
· Applicable on:
o 1300cc +/ 50kwh+ vehicles; Applicable for a total of first 6 years; 10% depreciation allowed, (CVT Rate 1%)
o Foreign Assets (immovable & movable) of RESIDENT individual if the COST exceeds Rs. 100m – payable with income tax return (Every year); Rate 1%:
1) if cost is known (Cost * Exchange rate on June 30 of relevant tax year)
2) If cost is not known (FMV * Exchange rate on June 30 of relevant tax year)
*** Meaning Value will keep changing as per Exchange rate every year
· In Finance Act 2024, for ICT (Islamabad):
o Farm Houses Rs. 500,000 (2,000 – 4,000 square yards + Covered Area 5000 Sq Ft) and Rs. 1m if it exceeds 4,000 sq yards. Multiple houses in a compound with each area exceeding 2000 Sq Yards are considered Multiple Fams.
o Residential Houses Rs. 1m (1,000 – 2,000 square yards) and Rs. 1.5m if it exceeds 2,000 sq yards
If a house do not fall within definition of FARM HOUSE then it may be considered as a Residential House :: within ICT limits irrespective of Rural or Urban distinction.
· A separate FORM-A needs to be electronically filed on IRIS
· 12% Default Surcharge is payable in case of late payment
· The CVT law is part of Finance Act 2022 and its rules were issued in September 2022
· Applicable on:
o 1300cc +/ 50kwh+ vehicles; Applicable for a total of first 6 years; 10% depreciation allowed, (CVT Rate 1%)
o Foreign Assets (immovable & movable) of RESIDENT individual if the COST exceeds Rs. 100m – payable with income tax return (Every year); Rate 1%:
1) if cost is known (Cost * Exchange rate on June 30 of relevant tax year)
2) If cost is not known (FMV * Exchange rate on June 30 of relevant tax year)
*** Meaning Value will keep changing as per Exchange rate every year
· In Finance Act 2024, for ICT (Islamabad):
o Farm Houses Rs. 500,000 (2,000 – 4,000 square yards + Covered Area 5000 Sq Ft) and Rs. 1m if it exceeds 4,000 sq yards. Multiple houses in a compound with each area exceeding 2000 Sq Yards are considered Multiple Fams.
o Residential Houses Rs. 1m (1,000 – 2,000 square yards) and Rs. 1.5m if it exceeds 2,000 sq yards
If a house do not fall within definition of FARM HOUSE then it may be considered as a Residential House :: within ICT limits irrespective of Rural or Urban distinction.
· A separate FORM-A needs to be electronically filed on IRIS
· 12% Default Surcharge is payable in case of late payment
