Income Tax Ordinance 2001: Withholding agent requires to provide information of tax deduction

KARACHI: Every withholding agent is required to provide details of each person whose withholding tax is deducted or whom withholding tax is paid through a monthly statement to Federal Board of Revenue (FBR).

According to updated Income Tax Ordinance, 2001 the withholding agent is required to provide information including name, CNIC and address of each persons from whom tax had been collected.

Section 165: Statements

Sub-Section (1): Every person collecting tax under Division II of this Part or Chapter XII or deducting tax from a payment under Division III of this Part or Chapter XII shall, furnish to the Commissioner a monthly statement in the prescribed form setting out—

(a) the name, Computerized National Identity Card Number, National Tax Number and address of each person from whom tax has been collected under Division II of this Part or Chapter XII or to whom payments have been made from which tax has been deducted under Division III of this Part or Chapter XII in each month;

(b) the total amount of payments made to a person from which tax has been deducted under Division III of this Part or Chapter XII in each month;

(c) the total amount of tax collected from a person under Division II of this Part or Chapter XII or deducted from payments made to a person under Division III of this Part or Chapter XII in each month; and

(d) such other particulars as may be prescribed:

Provided that every person as provided in sub-section (1) shall be required to file withholding statement even where no withholding tax is collected or deducted during the period.

Explanation.— For the removal of doubt, it is clarified that this sub-section overrides all conflicting provisions contained in the Protection of Economic Reforms Act, 1992 (XII of 1992), the Banking Companies Ordinance, 1962 (LVII of 1962), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject, in so far as divulgence of information under section 165 is concerned.

Sub-Section (2): Every prescribed person collecting tax under Division II of this Part or Chapter XII or deducting tax from payment under Division III of this Part or Chapter XII shall furnish or e-file statements under sub-section (1) by the 15th day of the month following the month to which the withholding tax pertains.

Sub-Section (2A): Any person who, having furnished statement under sub-section (1) or sub-section (2), discovers any omission or wrong statement therein, may file a revised statement within sixty days of filing of statement under sub-section (1) or sub-section (2), as the case may be.

Sub-Section (3): Board may prescribe a statement requiring any person to furnish information in respect of any transactions in the prescribed form and verified in the prescribed manner.

Sub-Section (4): A person required to furnish a statement under sub-section (1), may apply in writing, to the Commissioner for an extension of time to furnish the statement after the due date and the Commissioner if satisfied that a reasonable cause exists for non-furnishing of the statement by the due date may, by an order in writing, grant the applicant an extension of time to furnish the statement.

Sub-Section (5): The Board may make rules relating to electronic furnishing of statements under this section including,-

(a) mandatory electronic filing of statements; and

(b) determination of eligibility of the data of such statements and e-intermediaries, etc.

Sub-Section (6): Every person deducting tax from payment under section 149 shall furnish to the Commissioner an annual statement in the prescribed form and manner.

Through Finance Supplementary (Second Amendment) 2019, the following changes have been proposed in section 165,—

(A) in sub-section (1),—

(a) for the word “monthly”, wherever occurring, the word “biannual” shall be substituted;

(b) for the word “month”, wherever occurring, the word “half-year” shall be substituted; and
(B) for sub-section (2), the following shall be substituted, namely:—

“(2) Every prescribed person collecting tax under Division II of this Part or Chapter XII or deducting tax under Division III of this Part of Chapter XII shall furnish statements under sub-section (1) as per the following schedule, namely:—

(a) in respect of the half-year ending on the 30th June, on or before the 31st day of July;

(b) in respect of the half-year ending on the 31st December, on or before the 31st day of January”; and
(C) after sub-section (2A), the following new sub-section shall be inserted, namely:—

“(2B) Notwithstanding anything contained in this section, the Commissioner as he deems fit, may by notice in writing, require any person, collecting or deducting tax under this Ordinance, to furnish a statement for any period specified in the notice within such period of time as may be specified in the notice.”

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