2019/2020: Withholding tax rates on insurance premium

2019/2020: Withholding tax rates on insurance premium

ISLAMABAD: The insurance companies are required to deduct/collect withholding tax only from persons not appearing on the Active Taxpayers List (ATL) at the time of collection of insurance premium.

Federal Board of Revenue (FBR) issued withholding tax card for tax year 2019/2020 and updated tax on insurance premium under Section 236U of Income Tax Ordinance, 2001.

The FBR said that advance tax to be collected at the time of collection of insurance premium from a person whose name is not appearing in the active taxpayers’ list, by every insurance company in respect of General Insurance Premium and Life Insurance Premium.

The withholding tax rates shall be:

General Insurance Premium at four percent

Life Insurance Premium if exceeding Rs0.3 million in aggregate per annum at one percent

In other cases there will be not tax collection.

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