Income tax on payment for brokerage, commission

Income tax on payment for brokerage, commission

Section 233 of Income Tax Ordinance, 2001 has defined rate of income tax on payment on account of brokerage and commission.

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 233 of Income Tax Ordinance, 2001:

233. Brokerage and commission. — (1) 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 person or

individual having turnover of hundred million rupees or more (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.

(2) 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.

(2A) Notwithstanding the provisions of sub-section (1), where the principal is making payment on account of commission to an advertising agent, directly or through electronic or print media, the principal shall deduct tax (in addition to tax required to be deducted under clause (b) of sub-section (1) of section 153 on advertising services excluding commission), at the rate specified in Division II of Part IV of the First Schedule on the amount equal to-

A x 15/85

Where A = amount paid or to be paid to electronic or print media for advertising services (excluding commission) on which tax is deductible under clause (b) of sub-section (I) of section 153.

(2B) Tax deducted under sub-section (2A) shall be minimum tax on the income of the advertising agent.

(3) Where any tax is required to be collected from a person under sub-section (1), such tax shall be the minimum tax on the income of such persons.

(Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

For income tax rates on brokerage and commission please visit the following link:

Leave a Reply

You have to agree to the comment policy.