ISLAMABAD: Federal Board of Revenue (FBR) has exempted the withholding tax on commission agent for disbursement of Ehsaas Emergency Program.
The FBR issued SRO 315(I)/2020 dated April 16, 2020 to make amendment to Second Schedule of Income Tax Ordinance, 2001.
According to the amendment, a new clause 102A inserted to Part IV of the Second Schedule, which stated: “The provisions of Section 233 shall not apply to commission received by a retail branchless banking agent on any amount disbursed by the Ehsaas Emergency Cash Transfer Program for the period commencing on the date of issuance of this notification and ending on the 30th day of June, 2020.”
The Section 233 of the Income Tax Ordinance, 2001 explains application of withholding tax on brokerage and commission.
Where any payment on account of brokerage or commission is made by the Federal Government, a Provincial Government, a Local Government, a company or an association of persons constituted by, or under any law (hereinafter called the “principal”) to a person (hereinafter called the “agent”), the principal shall deduct advance tax at the rate specified in Division II of Part IV of the First Schedule from such payment.
If the agent retains Commission or brokerage from any amount remitted by him to the principal, he shall be deemed to have been paid the commission or brokerage by the principal and the principal shall collect advance tax from the agent.