RPGT: New Section 16A - Discharge of Double Assessments

The Real Property Gains Tax Act 1976 is amended by inserting the following section after section 16:

“Discharge of double assessments"

16A. Where two or more assessments have been made with respect to a person on the same gain in respect of the same chargeable asset for a year of assessment, the Director General may discharge such assessments as need to be discharged in order to ensure that the gain is charged to tax only once for that year.

Finance (No. 2) Bill 2023

Introducing new Section 16A in the Real Property Gains Tax Act 1976 addresses situations where multiple assessments have been issued to an individual for the same gain related to a specific chargeable asset in a given assessment year.

The amendment empowers the Director General to discharge or revoke certain assessments as necessary to ensure that the gain is subject to tax only once for that particular year.

Explanation:

Suppose an individual owns a property and, due to certain circumstances, multiple assessments are conducted by the tax authorities for the same gain associated with that property in a given assessment year.

Section 16A allows the Director General to review these assessments and discharge any redundant ones, ensuring that the gain is subjected to taxation only once.

This provision is implemented to streamline the tax assessment process and avoid imposing excessive tax liabilities on the individual.

Tax Impact:

The tax impact of this provision is beneficial for the taxpayer, as it prevents the duplication of tax obligations on the same gain.

By discharging redundant assessments, the taxpayer is relieved from potential undue tax burdens, promoting fairness and accuracy in the tax system.

Example: Let's consider a scenario where an individual sells a property, and two separate assessments are initiated for the same gain related to that property in a specific assessment year.

Without Section 16A, the individual might be liable to pay taxes based on both assessments, leading to an unfair and excessive tax burden.

However, with the new provision, the Director General can discharge one of the assessments, ensuring that the gain is taxed only once, thus alleviating the taxpayer from potential financial strain.

Note: The examples provided are for illustrative purposes and may not represent specific real-world cases. The actual tax impact may vary based on individual circumstances and applicable tax regulations.