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CollectionAnd
DeductionOf Tax at Source
(Taxpayers Facilitation Guide)
Prepared by:
FATE Wing
October, 2008
Revenue DivisionFederal Board of Revenue
Government of Pakistan
helpline@fbr.gov.pk0800-00-227, 051-111-227-227www.fbr.gov.pk
mailto:helpline@fbr.gov.pkhttp://www.fbr.gov.pk/http://www.fbr.gov.pk/mailto:helpline@fbr.gov.pk -
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Our VisionTo be a modern, progressive, effective, autonomousand credible organization for optimizing revenue byproviding quality service and promoting compliance
with tax and related laws
Our MissionEnhance the capability of the tax system to collect
due taxes through application of modern techniques,providing taxpayer assistance and by creating amotivated, satisfied, dedicated and professional
workforceOur Values
IntegrityProfessionalism
TeamworkCourtesyFairness
TransparencyResponsiveness
For assistance and information on tax mattersPlease contact our help line center through
Toll Free Telephone 0800-00-227
Telephone 051-111-227-227 or 051-111-227-228Fax 051-9205593
E-mail helpline@fbr.gov.pkor
Visit our tax facilitation center (located in all major cities) or any tax officeor
Visit our website at www.fbr.gov.pk
mailto:helpline@fbr.gov.pkhttp://www.fbr.gov.pk/http://www.fbr.gov.pk/mailto:helpline@fbr.gov.pk -
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Revenue DivisionFederal Board of RevenueGovernment of PakistanOctober, 2008
INTRODUCTION
This brochure explains the provisions of theIncome Tax Ordinance, 2001 governingwithholding tax in a simple and concisemanner. It mainly revolves around theobligations of the withholding agents as tocollection or deduction of tax at source, i.e.
o Identifying the withholding agents;
o Persons from whom tax is to be deductedor collected;
o Applicable rates of withholding taxes;
o Basis of withholding tax;o Time of deduction;o Time of deposit of tax deducted or
collected in the account of FederalGovernment;
o Frequency and time of submitting thestatements of tax deducted or collected;
o Applicable exemptions and reduced rates;and
o Liabilities of the withholding agents andconsequences of non-compliance.
A cross-index of dif ferent tax withholdingagents and the corresponding applicableprovisions of law is also given for quick andeasy reference.This brochure has been arranged sectionwise. Contents of this brochure are alsoavailable at our websitewww.fbr.gov.pk
DISCLAIMER:This brochure is to assist the taxpayers andreflects the legal position at the time ofprinting. In case of any conflict, the legalprovisions of the law shall prevail over thecontents of this brochure.
ContentsIntroduction 1Disclaimer 1Summary of withholding taxes 2Section 7- Shipping and Transport Business 2Section 148 Imports 2Section 149 Salary 4
Section 150 Dividend 4Section 151 (1) (a) -Profit on debt 4Section 152(1)- Payment to Non Residents 6Section 153(1) -Payment for 8
goods and servicesSection 153 (1A) -Payments For 9
Rendering Or Providing ServicesSection 153(A) -Payment to Non Residents 9
Media PersonSection 154(1) -Exports 9Section 155 - Income from Property 12Section 156 -Prizes and Wings 14Section 156A - Payments for 14
Petroleum ProductsSection 156B - Withdrawal 14
from Pension FundSection 231 A - Cash withdrawal form Bank 15
Section 231 B - Purchase of Motor Cars 15Section 233 - Brokerage and Commission 15233A (1)(a)& (b) -Commiss ion of Members of 16
Stock ExchangesSection 233 A (1)(c)- Trading of Shares 16
by the Members of Stock Exchanges.
Section 233 A (1)(d)- Financing of carry over trade 16(Badla) in shares by the membersof stock exchanges.
Section 234- Transport Motor Vehicles 17Section 234A -CNG Stations 17Section 235 -Electricit y Consumptions 18Section 236- Telephone Users. 18
Withholding agents liability to 19
Issue certificate of deduction andCollection of tax.
Withholding agents liability to 19Submit Monthly and annualStatements of tax col lected or deducted
Cross Index withho lding agent wise 21
Comments and suggestionsWe welcome your comments about this brochure andyour suggestions for future editions.
You can e-mail us at memberfate@fbr.gov.pkorYou can write to us at the following address:Facilitation and Tax Payer Education Wing,
Aziz Ghani Plaza, Fazal-e-Haq Road, Blue Area,Islamabad.Phone: 051-9202503 or 051-9204604
1
Collection and Deduction of Tax at Source
http://www.fbr.gov.pk/mailto:memberfate@fbr.gov.pkmailto:memberfate@fbr.gov.pkhttp://www.fbr.gov.pk/ -
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Section Person(s)liable tocollect ordeduct tax
Fromwhom
Rate On When Payable to thecredit of FederalGovernment
Statement(s) tax collected deducted
Potassic fertilizers imported inpursuance of EconomicCoordination Committee of thecabinets decision No ECC -155/12/2004 dated 9
thDecember
2004. (Clause: 13-E Part : II 2nd
Schedule
The following items as per (Clause:13-G Part: II 2nd Schedule).
i. Gold;
ii. Mobile telephone sets;iii. Silver;
Collection and Deduction of Tax at Source
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Section Person(s)liable tocollect ordeduct tax
From whom Rate On When PayacredGove
14 9
(Salary)
Employer Employee Annual average rate (to be calculated as perrate card subject to applicable reductions intax)
( For details see FBRs brochure Taxationof Income from Salary)
Salary chargeable to
tax
At the time the
salary isactually paid
On
ded(Whe
by anthe .RuleWithi
ded
(In ot
150(Dividend)
Company Shareholders 10%
Reduced rates
7.5% - Paid by a purchaser of a powerproject privatized by WAPDA [Clause
(17) of Part II of 2nd Schedule].7.5% - Paid by a company set up for
power generation [Clause (20) of Part IIof 2nd Schedule].
Gross amount ofdividend
At the time thedividend is
actually paid
Withfro
of
for
Ru
151(1)(a)
(Profit ondebt)
Persons paying
yield or profit(profit on debt)on an account,
deposit or acertificate underthe NationalSavings Scheme
or Post OfficeSavings Account
Recipient of
yield or profit(profit ondebt)
10% Yield or profit
(profit on debt)on an account,
deposit or a
certificate underthe National
Savings Scheme
or Post Office
Savings Account
as reduced by
amount of Zakat,if any, paid by the
recipient underthe Zakat andUshr Ordinance,
1980
At the time the
yield orprofit (profit
on debt) is
credited tothe account
of the
recipient or
is actually
paid,
whichever isearlier.
On
deRule
Collection and Deduction of Tax at Source
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Section Person(s)liable tocollect ordeduct tax
From whom Rate On When Payable to thecredit ofFederalGovernment
151(1)(b)(Profit ondebt)
Banking
Company
FinancialInstitution
Recipient of
profit on debt
on an account
or deposit
10% Profit on debt on an
account or deposit
maintained as reduced
by amount of Zakat, ifany, paid by therecipient under the
Zakat and Ushr
Ordinance, 1980
At the time the profit on debt is
credited to the account of the
recipient or is actually paid,
whichever is earlier
Within 7 days
from the end of
each fortnight.
Rule : 43(b)
151(1)(c)(Profit ondebt)
Federal
Government
Provincial
GovernmentLocal
Authority
Recipient of
profit on any
security
(profit on
debt)
10% Profit on debt on any
security (other than
those covered under
section 151(1)(a))
issued by the FederalGovernment or a
Provincial
Government or a localauthority as reducedby amount of Zakat, if
any, paid by the
recipient under the
Zakat and UshrOrdinance, 1980
At the time the profit on debt is
credited to the account of the
recipient or is actually paid,
whichever is earlier
On the day
deducted
(Where deducted
by and onbehalf of the
Government)
Rule:43(b)
Collection and Deduction of Tax at Source
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Section Person(s) liableto collect ordeduct tax
From whom Rate On When Payable tthe credit oFederalGovernment
151(1)(d)(Profit on
debt)
Banking CompanyFinancial Institution
Company as
defined in the
Companies
Ordinance, 1984Body Corporate
formed by or
under any law in
force in PakistanFinance Society
Recipient ofProfit on debt
other than
financial
Institution.
10% Profit on debt onany bond,
certificate,
debenture,
security or
instrument ofany kind asreduced by
amount of Zakat,
if any, paid bythe recipient
under the Zakat
and Ushr
Ordinance, 1980
At the time the profit ondebt is credited to the
account of the
recipient or is actually
paid, whichever is
earlier
Within 7 dayfrom the en
of eac
fortnight.
Rule:43(b)
152(1)
Payment
to Non
Residents
Every Person
paying royalty or
fee for technical
services to a non-resident
Non-Resident
Person
15% or lower
rate as per
agreement
foravoidance ofdouble
taxation
Gross amount of
royalty or fee for
technical
services
At the time the royalty
or fee for technical
services is actually
paid
On the da
deducted
(Where
deducted band on behaof th
Government)
Rule:43(a)
Within 7 day
from the en
of eacfortnight
(In other cases
Rule:43(b)
Collection and Deduction of Tax at Source
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Section Person(s)liable tocollect ordeduct tax
Fromwhom
Rate On When Payable to thcredit of FederaGovernment
152(1A)Payment
to Non
Residents
Every Personmaking
payment for
execution of
contract etc.,
to a non-resident
Non-Resident
Person
6% or lower rateas per agreement
for avoidance of
double taxation
Gross amount of paymenton account of execution of
a contract or sub-contract
under a construction,
assembly or installation
project in Pakistan,including a contract forthe supply of supervisory
activities in relation to
such project; or
A contract for
advertisement servicesrendered by Television
Satellite Channels
Any other contract for the
construction or servicesrendered, relating thereto.
At the time theamount is
actually paid
On the dadeducted
(Where deducted b
and on behalf of th
Government)
Rule:43(a)
Within 7 days from
the end of eac
fortnight(In other cases)
Rule:43(b)
152(1AA)
Paymentto Non
Residents
Every Person
makingPayment of
Insurance
premium are
re- insurance
premium
Non-
ResidentPerson
5% of the gross
amount
Gross amount paid as
insurance premium or re-insurance premium.
At the time the
amount isactually paid
On the da
deducted(Where deducted b
and on behalf of th
Government)
Rule:43(a)
Within 7 days from
the end of eac
fortnight(In other cases)
Rule:43(b)
Collection and Deduction of Tax at Source
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Section Person(s)liable tocollect ordeduct tax
From whom Rate On When Payable credit of Governm
152(2)
Paymentto Non
Residents
Every Person
making apayment to anon-resident(other than
royalty or fee fortechnical servicesor on executionof contract.
Non-resident
Person
30% or lower rate as per
agreement for avoidance ofdouble taxation
Gross amount of
any paymentchargeable totax including
profit on debts
but excludingroyalty and feefor technicalservices
At the time the
amount isactually paid
On the
deducte(Where
by and on the Govern
Rule:43(a)
Within 7 dthe endfortnigh
(In other caRule:43(b)
153(1)Payment forgoods and
services
FederalGovernment
Company
Association ofPersonsconstituted by,or under, law
ForeignContractor orConsultant
Consortium or
Joint Venture
Resident PersonPermanent
Establishmentin Pakistan of a
Non-Resident
Person
Sale of: Rice, cottonseed or
edible oils
1.5%
Any other goods3.5%
Services rendered orprovided 6%
Execution of contract6%
Reduced rateTransport 2%
Gross amount ofpayment onaccount of:
Sale of goods(inclusive ofsales tax);
Rendering orproviding ofservices; and
Execution of acontract, otherthan a contractfor the sale of
goods orrendering ofservices.
At the time theamount isactually paid
On thededucte
(Where
by and on the GovernRule:43(a)
Within 7 dthe endfortnigh
(In other ca
Rule:43(b)
Collection and Deduction of Tax at Source
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Section Person(s)liable tocollect or
deduct tax
From whom Rate On When Payable to thcredit of FederGovernment
153(1A)Payment
forRenderingor
providingandservices
Every Exporter
or an Export
House
Resident Person and
Permanent Establish-
ment in Pakistan of anon-Resident
0.5%Gross amount of
payment on account
of rendering orproviding of
services of stitching,
dying, printing,
embroidery,washing, sizing and
weaving
At the time the
amount is actually
paid
On the day deducted
(Where deducted b
and on behalf of thGovernment)
Rule:43(a)
Within 7 days fro
the end of eac
fortnight
(In other cases)
Rule:43(b)
153(A)Payment
to non
residentmedia
person
Every person Non resident mediaperson relaying from
outside Pakistan
10% Gross amount paidfor advertisement
services.
At the time ofpayment
On the day deducted(Where deducted b
and on behalf of th
Government)Rule:43(a)
Within 7 days fro
the end of eacfortnight
(In other cases)
Rule:43(b)
154(1)
Exports
Authorized
dealer inforeign
exchange
Exporter of goods 1% Foreign Exchange
proceeds
At the time of
realization ofexport proceeds
or indenting
commission
Within 7 days fro
the end of eacfortnight.Rule43(b
Collection and Deduction of Tax at Source
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Section Person(s)
liable tocollect ordeduct tax
From whom Rate On When Payable t
the credit oFederalGovernment
154 (2)
Exports
Authorized
dealer in
foreignexchange
Foreign indenting
commission
agents
Foreign indenting commission
5.00%
Reduced rates
Foreign
indenting
commission
At the time of
realization of
exportproceeds or
indenting
commission
Within 7 day
from the en
of eacfortnight.
Rule43(b)Export indenting commission on
export of goods. 5%
[Clause (5) of Part II of 2nd
Schedule]
Collection and Deduction of Tax at Source
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Section Person(s)liable tocollect ordeduct tax
Fromwhom
Rate On When Payable to the credit ofFederal Government
Statemcollecdeduc
154(3)
Exports
Banking
Company
Every
Person
1%
Realization of
proceeds on account
of sale of goods to anexporter under aninland back-to-back
letter of credit
Realization ofpayments made
through crossed
cheques to indirectexporters against
Standard Purchase
Order in the format
prescribed by the
State Bank ofPakistan
At the time of
realization
of the saleproceeds
Within 7 days from the end of
each fortnight
Rule:43(b)
Monthdays (
(2) AnAnnuamonth
154(3A)
Exports
The Export
Processing
ZoneAuthority
Industrial
undertaking
s located inExport
Processing
Zones
1% Proceeds of the export
of goods
At the time of
export of
goods
Within 7 days from the end of
each fortnight
Rule:43(b)
Monthdays ((2)AndAnnuamonth
154(3B)
Exports
Direct
Exporter or
Export Houseregistered
under DTRE
Rules, 2001
Indirect
exporter
(definedunder sub-
chapter 7 of
Chapter XIIof the
Customs
Rules, 2001
1% Payment against a firm
contract
At the time the
amount is
actually paid
Within 7 days from the end of
each fortnight
Monthdays (
Rule:43(b) (2) AnAnnuamonth
Collection and Deduction of Tax at Source
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Section Person(s) liableto collect ordeduct tax
From whom Rate On When Payable credit oGovernm
155IncomefromProperty
Federal GovernmentProvincial
Government
Local AuthorityCompanyNon-Profit
Organization
Diplomatic Missionof a foreign state
Recipient of rent ofimmovable
property
a) The rate of tax to be deducted undersection 155, in the case of an individualand association of persons, shall be-
S.No Gross amountof rent
Rate of Tax
1 Where thegross amountof rent doesnot exceedRs.150,000.
Nil
2 Where thegross amountof rent exceeds
Rs.150,000 butdoes notexceedRs.400,000.
5 per cent ofthe grossamount
exceedingRs.150,000.
3 Where thegross amountof rent exceedsRs.400,000 butdoes notexceedRs.1,000,000.
Rs.12,500 plus[7.5] percent ofthe grossamountexceedingRs.400,000.
4 Where thegross amountof rent exceedsRs.1,000,000.
Rs.57,500]plus 10 percent of thegross amountexceedingRs.1,000,000.
Rent ofimmovable
property(including
rent offurnitureandfixtures,and
amounts forservicesrelating tosuch
property)
At the timethe rent isactually
paid
On the day (Where dedon behalGovernmen
Rule:43(a)
Within 7 dend of ea
(In other ca
Rule:43(b)
Collection and Deduction of Tax at Source
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Section Person(s) liableto collect ordeduct tax
From whom Rate On When Payable credit oGovernm
b) The rate of tax to be deducted undersection 155, in the case of a company,shall be-
S.No Gross amountof rent
Rate of Tax
1 Where thegrossamountof rent doesnot exceed
5 per cent ofthe grossamount of rent.
Rs.400,000.
2 Where the
grossamountof rentexceedsRs.400,000but does notexceedRs.1,000,000..
Rs.20,000 plus
[7.5] percent of thegross amountof rentexceedingRs.400,000.
3 Where thegrossamountof rentexceeds
Rs.1,000,000..
Rs.65,000 plus10per cent of thegrossamount of rent
exceedingRs.1,000,000.
Collection and Deduction of Tax at Source
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Section Person(s)liable tocollect ordeduct tax
From whom Rate On When Payable to the cof FedGovernment
156
Prizes andWinnings
Every person
paying a prizeor winnings
Recipient of
prizes orwinnings
10% - On
prize of aprize bond20% - OnPrize or
winningsfrom araffle,lottery, quiz
or crosswordpuzzle; orprizeoffered by
companiesfor
promotion ofsale.
Prize on a prize bond;
Prize or winnings from araffle, lottery, quiz orcrossword puzzle;Prize offered by
companies forpromotion of sale
At the time the
prize orwinnings areactually paid
On the day deducted
(Where deducted byand on behalf of theGovernment)Rule:43(a)
Within 7 days fromthe end of eachfortnight(In other cases)
Rule:43(b)
156 A
Petroleumproducts
Every person
sellingpetroleumproducts to
petrol pumpoperator.
Petrol pump
operators
10% The amount of
commission/discountallowed to the petrol pumpoperator.
At the time of receiving
the amount of soldpetroleum products
On the day deducted (W
deducted by and on bof the Government)Rule:43(a)
Within 7 days from thof each fortnight (Incases)
Rule:43(b)
156B Pension FundManager
Recipient ofamount fromindividual
pension accountmaintained
under anyApproved
Pension Fund
Average rateof tax on thetaxableincome of 3
preceding
years
Any amount withdrawnbefore the retirement age; or
In excess of 25% of theaccumulated balance
withdrawn on or after theretirement age
At the time of makingthe payment
(Withdrawal)
Within 7 days from the each fortnightWithdrawal
frompensionfunds
Rule:43(b)
Collection and Deduction of Tax at Source
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Section Person(s) liableto collect ordeduct tax
From whom Rate On When Payable to theof FGovernment
231ACashWithdrawals from
banks
Banking Company Every Person makinga cash withdrawalexceeding Rs. 25,000
per day
0.3% Amountwithdrawn inexcess of Rs.25,000 per
day
At the time of makingthe payment
(Withdrawal)
Within 7 days frend of each fortn
Rule:43(b)
231 BPurchase
of MotorCars andJeeps
RegistrationAuthority
Every Person
EngineCapacity
Amount ofTax
upto850cc
Rs.7,500
851cc to1000cc
Rs.10,500
1001ccto1300cc
Rs.16,875
1301ccto1600cc
Rs.16,875
1601ccto1800cc
Rs.22,500
1801ccto2000cc
Rs.16,875
Above2000cc
Rs.50,000
Engine Capacity At the time ofRegistration
On the day d(Where deduc
and on behalfGovernment)
Rule:43(a)
233Brokerage and
Commission
FederalGovernmentProvincial
GovernmentLocal AuthorityCompany
Recipient ofbrokerage orcommission
10%
Association of
Personsconstituted by,or under, law
Reducedrate
AdvertisingAgents 5.0%[Clause (26) of Part II of2ndSchedule]
Brokerage andCommission
At the time thebrokerage orcommission is
actually paidOrAt the time of receiving
payment where the
agent retains thebrokerage orcommission out of
proceeds remitted
On the day deducte(Where deducted on behalf o
Government)Rule:43(a)Within 7 days fr
end of each fortn
Collection and Deduction of Tax at Source
15
(In other cases)Rule:43(b)
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Section Person(s) liableto collect ordeduct tax
From whom Rate On- When Payable to thecredit ofFederalGovernment
233A(1)(a)and
233A(1)(b)
Commission
of Membersof Stock
Exchange
Stock Exchangeregistered in
Pakistan
Members ofthe stock
exchange
0.01% Purchase and/or salevalue of the shares
At the time ofmaking the
payment or
receiving the
payment
Within 7 daysfrom the end of
each fortnight
Rule:43(b)
233A)1)(c)
Trading ofShares
Stock Exchange
registered in
Pakistan
Sellers of
shares
throughmembers of
the stock
exchange
0.01% Value of the shares
traded (Sale)
At the time of
making the
payment
Within 7 days
from the end of
each fortnightRule:43(b)
233(A)(1)(d)Financing of
carryover
trade in
shares
Stock Exchangeregistered in
Pakistan
Financiersthrough
members of
the stock
exchange
10% Amount of carry overcharge
At the time ofmaking the
payment
Within 7 daysfrom the end of
each fortnight
Rule:43(b)
Collection and Deduction of Tax at Source
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Section Person(s)liable tocollect ordeduct tax
Fromwhom
Rate On When Payable tothe credit ofFederalGovernment
Sttaxde
234Tax onMotorVehicles
Personcollectingmotorvehicle tax
Owner ofmotorvehicle
In the case of goodstransport vehiclesranging from Rs. 1,200to Rs. 36,000 perannum
In case of passengertransport vehiclesplying for hire rangingfrom Rs. 25 to Rs. 100per seat per annum
Other private motor carsranging from Rs. 750 toRs. 8,000 per annum
Reduced rate Rs. 1,200Goods transportvehicles with ladenweight of 8120
kilograms or more aftera period of ten yearsfrom the date of firstregistration of thevehicle in Pakistan[Paragraph (1A) ofDivision III of Part IV of1st Schedule].
Registered ladenweight oftransportvehicles
Registered
seating capacityof passengertransportvehicles plyingfor hire
Engine capacity ofother privatemotorcars
At the time ofcollectingmotor vehicletax (if motorvehicle tax is
collected ininstallments,the tax is alsocollected ininstallments)
On the daycollected
Moda(2Anm
44
234ACNGStation
GasMarketingCompanies
CNGStationOperator
4% On the amount ofgas bill.
At the time ofpreparing thegas bill.
On the daycollected.
Moda(2Anm44
Collection and Deduction of Tax at Source
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Collection and Deduction of Tax at Source
18
Section Person(s)liable tocollect ordeduct tax
From whom Rate On When Payable the crediFederalGovernm
235ElectricityConsumption
Personpreparingelectricityconsumption bill
CommercialandIndustrialconsumersof electricity
Ranging from Rs. 60to Rs. 1500 of themonthly bill (monthlybill Not exceeding20000)
_______________
Bill exceeding Rs20000 @ 10 %
Amount ofelectricityconsumptioncharges
Alongwith paymentof electricityconsumptioncharges
Within 7 dfrom end of efortnight
236Telephones
Personpreparingtelephonebill
Personissuing orsellingprepaidcards fortelephone
Telephonesubscriber
Purchaser ofprepaidtelephone
cards
In case of telephonesubscriber (Otherthen mobile phonewhere the amountexceeds Rs 1000 =
@ 10 % of theexceedingamount).
In the case ofsubscriber ofmobile telephoneand prepaidtelephone card =10% of the amountof bill or sales priceof pre-paidtelephone card
Amount of bill orsale price of apre-paid card
Alongwith paymentof telephone billor at the time ofissuance or saleof pre-paid cards
Within 7 dfrom end of efortnight
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Withholding agents liability to issuecertificate of deduction and collection of tax
Every withholding agent (person obliged tocollect or deduct tax at source) collecting ordeducting tax under the provisions of the Income
Tax Ordinance, 2001 is obliged to issuecertificate of tax collected or deducted, induplicate and serially numbered, in theprescribed form to the person from whom suchtax has been collected or deducted.
Where the tax is deducted from salary undersection 149 of the Income Tax Ordinance, 2001:
(a) The certificate of tax deducted is to beissued within 45 days from the end of eachfinancial year. Rule:41(1)
(b) Where the employment ceases before the
end of the financial year, the certificate is tobe issued for the period of employment inthat year within 7 days of the ceasing of theemployment or at the time of makingpayment of final settlement whichever islater.Rule:41(2)
Where the tax is collected or deducted under anyother provisions of the Income Tax ordinance,2001:(a) The certificate of collection or deduction is
to be issued within 15 days from the end ofeach financial year or discontinuation of
business, etc.Rule:42(1)
(b) If the person from whom tax has beencollected or deducted requests for theissuance of the certificate before the end ofthe financial year, the certificate is to beissued for the period in that year within 7days of the request made.Rule:42(2)
Where a certificate issued has been lost, stolenor destroyed, the recipient of the certificate mayrequest, in writing, that the issuer of the certificateissue a duplicate certificate.Rule41(3)
Where a request has been made, the issuer ofthe certificate shall comply with the request andthe certificate so issued shall be clearly markedduplicate.Rule:41(4)
All taxes collected or deducted are payable to theCommissioner of Income Tax by way of credit tothe Federal Government by remittance to theGovernment Treasury or deposit in an authorized
branch of the State Bank of Pakistan or theNational Bank of Pakistan.
Withholding agents liability to submitMonthly and annual statements of taxcollected or deducted
Every withholding agent (person obliged tocollect or deduct tax at source) under theprovisions of the Income Tax Ordinance, 2001 isrequired to submit necessary details andinformation after each month and annually.
A single consolidated statement for each month isto be submitted within 15 days from the end of theeach month in the prescribed form accompaniedwith evidence of deposit of tax collected ordeducted to the credit of the Federal Government.
Two separate annual statements are prescribed:
(a) One for the withholding agents obliged todeduct tax from salary under section 149 ofthe Income Tax Ordinance, 2001; and
(b) The other for withholding agents obliged tocollect or deduct tax under any otherprovision of the Income Tax Ordinance,2001.
Withholding agents liability to reconcile theMonthly and annual statements
Every withholding agent (person obliged tocollect or deduct tax at source) wherever requiredby the Commissioner, is obliged to furnish areconciliation of the amounts mentioned in theannual and monthly statements with the amounts
mentioned in the return of income, statements,related annexes and other documents submittedfrom time to time.
Consequences of non-compliance
The Income Tax Ordinance, 2001 takes amplecare for non-compliance of the provisions of lawrelating to withholding taxes and filing of monthlyand annual statements of tax collected anddeducted. These are explained below:
Deductions not allowed [Section 21]
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In case of not withholding tax at source thefollowing expenditures are not allowed asdeduction for the purpose of computing income:
o Salaryo Rent
o Brokerage or commissiono Profit on debto Payment to non-residento Payment for services or fee
Recovery of tax not collected or deducted
The person responsible for collecting ordeducting the tax at source as a withholdingagent, is personally liable for the amount of taxnot collected or deducted andpayable/recoverable as if it is due under anassessment order under the Income Tax
ordinance, 2001.
Recovery of tax col lected or deducted but notdeposited/paid
Similarly, the tax collected or deducted, if not paidis also payable/recoverable as if it is due underan assessment order under the Income Taxordinance, 2001 personally from the personresponsible to collect or deduct the tax as sourceas a withholding agent.
Charge of additional tax
In addition to the principal amount of the tax to becollected or deducted at source by the
withholding agent, a further tax additional tax isalso payable/recoverable at the rate of 12% perannum on the amount of tax not collected ordeducted or having collected or deducted notpaid computed for the period commencing on thedate the amount was required to be collected ordeducted and ending on the date on which it ispaid.
Prosecution
Any person who, without reasonable excuse, failsto comply with the obligation to collect or deducttax or having collected or deducted fails to paythe tax shall tantamount to committing an offencepunishable on conviction with a fine orimprisonment for a term not exceeding one year,or both.
Penalty for failure to furnish statement(s) of
tax collected or deducted
Any person responsible for collection ordeduction of tax at source as a withholding agent,without reasonable excuse, fails to furnish, withinthe time allowed for this purpose, anystatement(s) of tax collected or deducted is liablefor a penalty of Rs. 2,000.Sec:182(2)
If the default of not furnishing the statement(s)continues even after the imposition of penalty ofRs. 2,000, mentioned above, an additionalpenalty of Rs. 200 for each day of is also
attracted.Sec:182(3)
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Cross Index withholding agent wise
Persons liable to collect or deduct tax (Withholdingagents)
Applicable sect ions of the Income TaxOrdinance, 2001
Shipping agent 07,8, 143,169
Airline Agents 07,8, 144,169Gas Company 234A, 169Authorized dealer in foreign exchange 149, 154(1), 154(2)Association of persons 149, 152(1), 152(1A), 152(2), 153(1A),156,
233Association of persons constituted by, or under, law 149, 152(1), 152(1A), 152(2), 153(1),
153(1A), 156, 233Banking Company 149, 151(1)(a), 151(1)(b), 151(1)(d), 152(1),
152(1A), 152(2), 153(1), 154(1), 154(2),154(3), 155, 156, 231A, 233,
Body corporate formed by or under any law in force inPakistan
149, 151(1)(d), 152(1), 152(1A), 152(2),153(1), 153(1A), 155, 156, 233
Body incorporated by or under the law of a country outside
Pakistan relating to incorporation of companies
149, 152(1), 152(1A), 152(2), 153(1), 155,
156, 233Collector of Customs 148Company as defined under the Companies Ordinance, 1984 149, 151(1)(d), 152(1), 152(1A), 152(2),
153(1), 153(1A), 155, 156, 233Consortium 149, 152(1), 152(1A), 152(2), 153(1),
153(1A), 156Co-operative Society 149, 152(1), 152(1A), 152(2), 153(1),
153(1A), 155, 156, 233Diplomatic mission of a foreign state 155Direct Exporter 153(1A), 154(3B)Electricity Consumption Bill Preparing Authority 235Export House registered under DTRE Rule, 2001 153(1A), 154(3B)Export Processing Zone Authority 154(3A)
Federal Government 149, 151(1)(a), 151(1)(c), 152(1), 152(1A),152(2), 153(1), 153(1A), 155, 156, 233
Finance society 149, 151(1)(d), 152(1), 152(1A), 152(2),153(1), 155, 156, 233
Financial Institution 149, 151(1)(b), 151(1)(d), 152(1), 152(1A),152(2), 153(1), 154(1), 154(2), 155, 156, 233
Foreign association, whether incorporated or not, declaredto be a company by the Federal Board of Revenue
149, 152(1), 152(1A), 152(2), 153(1), 155,156, 233
Foreign consultant 149, 152(1), 152(1A), 152(2), 153(1), 156,233
Foreign contractor 149, 152(1), 152(1A), 152(2), 153(1), 156,233
Individual 149, 152(1), 152(1A), 152(2), 153(1A), 156
J oint Venture 149, 152(1), 152(1A), 152(2), 153(1), 156Local Authority 149, 151(1)(c), 152(1), 152(1A), 152(2),
153(1), 155, 156, 233Modaraba 149, 152(1), 152(1A), 152(2), 153(1), 155,
156, 233Motor Vehicle Tax Collection Authority 234Non-profit organization 149, 152(1), 152(1A), 152(2), 153(1), 155,
156, 233Pension Fund Manager 156B
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Person paying profit on debt on National Saving Schemesof Directorate of National Savings or Post Office SavingAccount
151(1)(a)
Persons selling petroleum products to petrol pump operators 156ATrust 149, 152(1), 152(1A), 152(2), 153(1), 155,
156, 233
Prepaid Card Selling Person 236Provincial Government 149, 151(1)(c), 152(1), 152(1A), 152(2),153(1), 153(1A), 155, 156, 233
Resident Company 150Society established or constituted by or under any law forthe time being in force
149, 152(1), 152(1A), 152(2), 153(1), 155,156, 233
Stock Exchanges Registered in Pakistan 233ATelephone Bill Preparing Person 236
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Other Facilitation and Tax Education Material Produced byFederal Board of Revenue
Publications
Brochure Universal self-assessment and record keeping
Brochure Business accounts, documents and records
Brochure Taxation of income from salary
Brochure -- Frequently asked questions about Taxation of Salary
Brochure Collection and deduction of tax at source
Brochure Charitable Organizations
Brochure Taxation of income from dividend
Brochure The Mechanism of Alternate Dispute Resolution
Brochure Taxpayers Charter
Brochure Import of vehicles
Brochure Passenger Baggage Rules
Brochure - Sales Tax Facilitation Guide
Quarterly Review
Year Book
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