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FBR updates withholding tax rates for income from property

Taxation

ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax on rental income from immovable properties for tax year 2021.

The FBR updated the withholding tax card 2020-2021 after incorporating amendments to Income Tax Ordinance, 2001 made through Finance Act, 2020.

The FBR said that every prescribed persons as per Section 155 of Income Tax Ordinance, 2001 shall collect / deduct withholding tax from recipient of rent of immovable property at the time the rent is actually paid.

Section 155: Income from Property

Any payment made on account of rent of immovable property

(A) In case of individual or AOP

1. Where the gross amount of rent does not exceed Rs, 200,000: the tax rate shall be zero

2. Where the gross amount of rent exceeds Rs, 200,000 but does not exceed Rs, 600,000: 5 percent of the gross amount exceeding Rs, 200,000

3. Where the gross amount of rent exceeds Rs, 600,000 but does not exceed Rs, 1,000,000: Rs, 20,000+10 percent of the gross amount exceeding Rs, 600,000

4. Where the gross amount of rent exceeds Rs, 1,000,000 but does not exceed Rs, 2,000,000: Rs,60,000+15 percent of the gross amount exceeding Rs, 1,000,000

5. Where the gross amount of rent exceeds Rs, 2,000,000 but does not exceed Rs. 4,000,000: Rs, 210,000+20 percent of the gross amount exceeding Rs, 2,000,000

6. Where the gross amount of rent exceeds Rs.4,000,000 but does not exceeds Rs. 6,000,000: Rs.610,000 plus 25 per cent of the gross amount exceeding Rs.4,000,000

7. Where the gross amount of rent exceeds Rs.6,000,000 but does not exceeds Rs. 8,000,000: Rs.1,110,000 plus 30 per cent of the gross amount exceeding Rs.6,000,000

8. Where the gross amount of rent exceeds Rs.8,000,000: Rs.1,710,000 plus 35 percent of the gross amount exceeding Rs.8,000,000

B) in case of company: 15 percent

The tax shall be adjustable against total tax liability.

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