Section 169 of Income Tax Ordinance, 2001 explains the final tax regime under the income tax ordinance.
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 169 of Income Tax Ordinance, 2001:
169. Tax collected or deducted as a final tax.—(1) This section shall apply where —
(b) the tax required to be deducted is a final tax under sub-section (1E) of section 152, 152A, sub-section (4) of section 154, sub-section (2) of section 154A sub-section (3) of section 156, sub-section (2) or section 156A or on the income from which it 13 was deductible.
(2) Where this section applies —
(a) the income shall not be chargeable to tax under any head of income in computing the taxable income of the person;
(b) no deduction shall be allowable under this Ordinance for any expenditure incurred in deriving the income;
(c) the amount of the income shall not be reduced by —
(i) any deductible allowance under Part IX of Chapter III; or
(ii) the set off of any loss;
(d) the tax deducted shall not be reduced by any tax credit allowed under this Ordinance;
(e) there shall be no refund of the tax collected or deducted unless the tax so collected or deducted is in excess of the amount for which the taxpayer is chargeable under this Ordinance; and.
(f) tax deductible has not been deducted, or short deducted, the said non-deduction or short deduction may be recovered under section 162, and all the provisions of this Ordinance shall apply accordingly.
(3) Where all the income derived by a person in a tax year is subject to final taxation under the provisions referred to in sub-section (1) or under sections 5, 6 and 7 an assessment shall be treated to have been made under section 120
Explanation.— The expression, “an assessment shall be treated to have been made under section 120” means,—
(a) the Commissioner shall be taken to have made an assessment of income for that tax year, and the tax due thereon equal to those respective amounts specified in the return; and
(b) the return shall be taken for all purposes of this Ordinance to be an assessment order.
(4) Where the tax collector or deducted is final tax under any provision of this Ordinance and hundred percent higher tax rate has been prescribed for the said tax under the Tenth Schedule, the final tax shall be the tax rate prescribed in the First Schedule and the excess tax collected under the Tenth Schedule specified for persons not appearing in the active taxpayers’ list shall be adjustable in case the return is filed before finalization of assessment as provided in rule 4 of the Tenth Schedule.
