KARACHI: Foreign exchange companies are responsible for collecting advance tax on remitting abroad the education related expenses.
The Federal Board of Revenue (FBR) recently updated Income Tax Ordinance, 2001 under which Section 236R explained the advance tax on remitting amount abroad for education expenses.
Section 236R: Collection of advance tax on education related expenses remitted abroad
Sub-Section (1): There shall be collected advance tax at the rate specified in Division XXIIV of Part-IV of the First Schedule on the amount of education related expenses remitted abroad.
Rate of collection of tax under section 236R shall be 5percent of the amount of total education related expenses.
Sub-Section (2): Banks, financial institutions, foreign exchange companies or any other person responsible for remitting foreign currency abroad shall collect advance tax from the payer of education related expenses.
Sub-Section (3): Tax collected under this section shall be adjustable against the income of the person remitting payment of education related expenses.
Sub-Section (4): For the purpose of this section, “education related expenses” includes tuition fee, boarding and lodging expenses, any payment for distant learning to any institution or university in a foreign country and any other expense related or attributable to foreign education.
KARACHI: Every market committee has been required to collect advance tax from dealers, commission agents under income tax laws.
The Federal Board of Revenue (FBR) recently updated Income Tax Ordinance, 2001 under which advance tax is collectable from dealers, commission agents and arhatis under Section 236J.
Section 236J: Advance tax on dealers, commission agents and arhatis etc
Sub-Section (1): Every market committee shall collect advance tax from dealers, commission agents or arhatis, etc. at the rates specified in Division XVII of Part-IV of the First Schedule at the time of issuance or renewal of licences.
The rate of collection of tax under section 236J shall be as follows:
Group
Amount of tax (per annum)
Group or Class A:
Rs. 10,000
Group or Class B:
Rs. 7,500
Group or Class C:
Rs. 5,000
Any other category:
Rs. 5,000
Sub-Section (2): The advance tax collected under sub-section (1) shall be adjustable.
Sub-Section (4): In this section “market committee” includes any committee or body formed under any provincial or local law made for the purposes of establishing, regulating or organizing agricultural, livestock and other commodity markets.
KARACHI: Income tax return filers can claim adjustment of advance tax paid on educational fee.
According to updated Income Tax Ordinance, 2001 issued by Federal Board of Revenue (FBR) the advance tax collected on education fee under Section 236I is adjustable against total income tax liability of a taxpayer.
Section 236I: Collection of advance tax by educational institutions
Sub-Section (1): There shall be collected advance tax at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.
The rate of collection of tax under section 236I shall be 5 percent of the amount of fee.
Sub-Section (2): The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.
Sub-Section (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.
Sub-Section (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.
Sub-Section (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.
Sub-Section (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.
KARACHI: Federal Board of Revenue (FBR) has made manufacturers responsible for collecting advance tax on sales to distributors, dealers and wholesalers.
The tax has been imposed under Section 236G of Income Tax Ordinance, 2001.
Section 236G: Advance tax on sales to distributors, dealers and wholesalers
Sub-Section (1): Every manufacturer or commercial importer of electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to distributors, dealers and wholesalers, shall collect advance tax at the rate specified in Division XIV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.
The rate of collection of tax under section 236G shall be as follows:-
Category of Sale
Rate of Tax
Filer
Non-Filer
Fertilizers
0.7 percent
1.4 percent
Other than Fertilizers
0.1 percent
0.2 percent
Sub-Section (2): Credit for tax collected under sub-section (1) shall be allowed in computing the tax due by the distributor, dealer or wholesaler on the taxable income for the tax year in which the tax was collected.
Section 236H: Advance tax on sales to retailers
Sub-Section (1): Every manufacturer, distributor, dealer, wholesaler or commercial importer of electronics, sugar, cement, iron and steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to retailers, “and every distributor or dealer to another wholesaler in respect of the said sectors”, shall collect advance tax at the rate specified in Division XV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.
The rate of collection of tax under section 236H on the gross amount of sales shall be as follows:-
Category of sale
Rate of tax
Filer
Non-Filer
(1)
(2)
(3)
Electronics
1 percent
1 percent
Others
0.5 percent
Sub-Section (2): Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the retailer on the taxable income for the tax year in which the tax was collected.
Section 236HA: Tax on sale of certain petroleum products
Sub-Section (1): Every person selling petroleum products to a petrol pump operator or distributor, where such operator or distributor is not allowed a commission or discount, shall collect advance tax on ex-depot sale price of such products at the rate specified in Division XVA of Part IV of the First schedule.
The rate of collection of tax under section 236HA shall be 0.5 percent of ex-depot sale price for filers and 1 percent for non-filers.
Sub-Section (2): The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of petroleum products to which sub-section (1) applies.
KARACHI: Electronic media and cable operators are required to pay adjustable advance tax at the time of obtaining new license or renewal of license.
According to updated Income Tax Ordinance, 2001 issued by the Federal Board of Revenue (FBR), Pakistan Electronic Media Regulatory Authority (PEMRA) shall collect the advance tax at the time of issuance of licence for distribution services or renewal of the licence to a licencee under Section 236F of the Ordinance.
Section 236F: Advance tax on cable operators and other electronic media
Sub-Section (1): Pakistan Electronic Media Regulatory Authority, at the time of issuance of licence for distribution services or renewal of the licence to a licencee, shall collect advance tax at the rates specified in Division XIII of Part IV of the First Schedule.
(1) The rate of tax to be collected under section 236F in the case of Cable Television Operator shall be as follows:—
License Category as provided in PEMRA Rules
Tax on License Fee
Tax on Renewal
H
Rs. 7,500
Rs. 10,000
H-I
Rs. 10,000
Rs. 15,000
H-II
Rs. 25,000
Rs. 30,000
R
Rs. 5,000
Rs. 12,000
B
Rs. 5,000
Rs. 40,000
B-1
Rs. 30,000
Rs. 35,000
B-2
Rs. 40,000
Rs. 45,000
B-3
Rs. 50,000
Rs. 75,000
B-4
Rs. 75,000
Rs. 100,000
B-5
Rs. 87,500
Rs. 150,000
B-6
Rs. 175,000
Rs. 200,000
B-7
Rs. 262,500
Rs. 300,000
B-8
Rs. 437,500
Rs. 500,000
B-9
Rs. 700,000
Rs. 800,000
B-10
Rs. 875,500
Rs. 900,000
(2) The rate of tax to be collected by Pakistan Electronic Media Regulatory Authority under section 236F in the case of IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights, shall be 20 per cent of the permission fee or renewal fee, as the case may be.
“(3) In addition to tax collected under paragraph (2) Pakistan Electronic Media Regulatory Authority shall collect tax at the rate of fifty per cent of the permission fee or renewal fee, as the case may be, from every TV Channel on which foreign TV drama serial or a play in any language, other than English, is screened or viewed.”
Sub-Section (2): The tax collected under sub-section (1) shall be adjustable.
Sub-Section (3): For the purpose of this section, “cable television operator” “DTH”, “Distribution Service”, “electronic media”, “IPTV”, “loop holder”, “MMDS”, “mobile TV”, shall have the same meanings as defined in Pakistan Electronic Media Regulatory Authority Ordinance, 2002 (XIII of 2002) and rules made thereunder.
ISLAMABAD: Federal Board of Revenue (FBR) has added over 114,000 return filers to Active Taxpayers List (ATL) following the grant of extension in filing income tax returns for Tax Year 2018 up to March 31, 2019.
The FBR issued weekly updated ATL 2018 on Monday, which showed the number of active taxpayers increased to 1.75 million.
The FBR issued first ATL 2018 on March 01, 2019 which had carried 1.6 million taxpayers in the list.
The appearance of ATL is mandatory for availing reduced rate of withholding tax rate and other benefits available only to return filers.
Through Finance Act, 2018, a section 182A was inserted to Income Tax Ordinance, 2001 which barred the late filers to appear on the ATL.
Therefore, the ATL issued on March 01, 2019 only those taxpayers were included who filed their returns by December 15, 2018 in case of salaried persons, business individuals and companies with special years and December 31, 2018 for companies with normal tax year.
However, the FBR last week extended the last date for filing income tax returns for all classes of taxpayers. Hence, those taxpayers who have filed their returns after December 15 or December 31 became eligible for ATL.
KARACHI: Federal Board of Revenue (FBR) has updated advance tax rates on marriages and functions through latest amendment to Income Tax Ordinance, 2001. The national assembly recently approved Finance Supplementary (Second Amendment) Act, 2019 and advance tax rate for functions and gathering has been updated. The advance tax is collected under following section of the Ordinance. Section 236D: Advance tax on functions and gatherings Sub-Section (1): Every prescribed person shall collect advance tax at the rate specified in Division XI of Part IV of the First Schedule on the total amount of the bill from a person arranging or holding a function in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose. Sub-Section (2): Where the food, service or any other facility is provided by any other person, the prescribed person shall also collect advance tax on the payment for such food, service or facility at the rate specified in Division XI of Part IV of the First Schedule from the person arranging or holding the function. Sub-Section (3): The advance tax collected under sub-section (1) and sub-section (2) shall be adjustable. Sub-Section (4): In this section,— (a) “function” includes any wedding related event, a seminar, a workshop, a session, an exhibition, a concert, a show, a party or any other gathering held for such purpose; and (b) “prescribed person” includes the owner, a lease-holder, an operator or a manager of a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose. The rate of tax to be collected under each sub-sections (1) and (2) of section 236D shall be 5%; Provided that the rate for the function of marriage in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose shall be as set out in the Table below:─
S. No.
Rate of tax
01
5% of the bill ad valorem or Rs20,000 per function, whichever is higher
For Islamabad, Lahore, Multan,Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Shekhurpura, Dera Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbottabad, Kohat, Dera Ismail Khan, Quetta, Sibi, Loralai, Khuzdar, Dera Murad Jamali and Turbat.
02
5% of the bill ad valorem or Rs10,000 per function, whichever is higher
KARACHI: A large number of taxpayers may file their annual income tax returns while taking advantage of date extension up to March 31, 2019, tax manager said.
The Federal Board of Revenue (FBR) recently extended the last date for filing income tax return for tax year 2018 up to March 31, 2018, which was December 15, 2018 for salary, business individuals, taxpayers falling in final tax regime and companies having special tax year.
Similarly, the date was also extended for corporate units up to March 31, 2019, whose last date was December 31, 2018.
The tax managers said that due to burden and restrictions on non-filers under Income Tax Ordinance, 2001 a huge number of individuals and companies would file their income tax returns for tax year 2018 to appear on Active Taxpayers List (ATL).
They said that the non-filers have been restricted in purchasing immovable properties over Rs40 million and registration of imported motor vehicles.
Further, the non-filers are also required to pay higher percent of withholding tax on various transactions. The non-filers in the recent mini-budget allowed to purchase and register new locally assembled motor vehicles. However, the withholding tax rates on non-filers have been increased by 50 percent.
The ATL issued by FBR on March 01, 2019 for tax year 2018 carried list of 1.59 million active taxpayers. In contrast the ATL for the tax year 2017 had carried 1.84 million active taxpayers, which showed about 240,000 taxpayers were not on the new list.
With the extension of date up to March 31, 2019 the return filers would not require to pay penalty and also become eligible for appearing on the ATL.
To some estimates the recent date extension by the FBR around 250,000 to 300,000 more returns would be added to the current active taxpayers list.
KARACHI: Adjustable advance tax is applicable for filers and non-filers of income tax return on sales and purchase of immovable properties to be collected at the time of transaction.
KARACHI: Passengers traveling through domestic or international airlines are required to pay certain amount of advance tax on purchase of air tickets.
According to Income Tax Ordinance, 2001 issued by Federal Board of Revenue (FBR) passengers of domestic and international destinations are required to pay advance tax under Section 236B and Section 236L. Section 236B: Advance tax on purchase of air ticket.
Sub-Section (1): There shall be collected advance tax at the rate specified in Division IX of Part IV of the First Schedule, on the purchase of gross amount of domestic air ticket:
(The rate of tax to be deducted under section 236B shall be 5 percent of the gross amount of air ticket.)
“Provided that this section shall not apply to routes of Baluchistan coastal belt, Azad Jammu and Kashmir, Federally Administered Tribal Areas, Gilgit-Baltistan and Chitral.”
Sub-Section (2): The airline issuing air ticket shall charge advance tax under sub-section (1) in the manner air ticket charges are charged.
Sub-Section (2A): The mode, manner and time of collection shall be as may be prescribed.
Sub-Section (3): The advance tax collected under sub-section (1) shall be adjustable.
Section 236L: Advance tax on purchase of international air ticket Sub-Section (1): Every airline, issuing ticket for journey originating from Pakistan, shall collect advance tax at the rates specified in Division XX of Part IV of the First Schedule, on the gross amount of international air tickets issued to passengers booking one-way or return, from Pakistan.
01
First/Executive Class
Rs16,000 per person
02
Other excluding Economy
Rs12,000 per person
03
Economy
0
Sub-Section (2): The airline issuing air ticket shall collect or charge advance tax under sub-section (1) in the manner air ticket charges are collected or charged, either manually or electronically.
Sub-Section (3): The mode, manner and time of collection under sub-section (1) and time of collection shall be as may be prescribed.
Sub-Section (4): The advance tax collected under sub-section (1) shall be adjustable.
