Section 236I of Income Tax Ordinance, 2001 tells about the collection of advance tax by educational institutes.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following is the text of Section 236I of Income Tax Ordinance, 2001:
236I. Collection of advance tax by educational institutions.— (1) There shall be collected advance tax from a person not appearing on the active taxpayers’ list at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.
(2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.
(3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.
(4) The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.
(5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.
“(6) Advance tax under this section shall not be collected from a person who is a non-resident and,—
(i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;
(ii) furnishes a certificate that he has no Pakistan-source income; and
(iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.”
Advance tax collected by educational institutes
The rate of collection of tax under section 236I shall be 5% of the amount of fee.
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