Income tax rates on telephone, internet usage

Income tax rates on telephone, internet usage

ISLAMABAD: Federal Board of Revenue (FBR) has updated rates of income tax on usage of telephone and internet services by phone subscribers during tax year 2021 (July 30, 202 to June 30, 2021).

The FBR issued Income Tax Ordinance, 2001 (updated June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

The FBR also updated following rates of collection of tax under section 236 of the Income Tax Ordinance, —

(a)In the case of a telephone subscriber (other than mobile phone subscriber) where the amount of monthly bills exceeds Rs100010 percent of the exceeding amount of bill
(b)In the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card12.5 percent of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

Following is the text of Section 236 of Income Tax Ordinance, 2001:

236. Telephone and internet users.- (1) Advance tax at the rates specified in Part IV of the First Schedule shall be collected on the amount of –

(a) telephone bill of a subscriber;

(b) prepaid cards for telephones;

(c) sale of units through any electronic medium or whatever form; and

(d) internet bill of a subscriber; and

(e) prepaid cards for internet.

(2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in the manner telephone or internet charges are charged.

(3) The person issuing or selling prepaid cards for telephones or internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.

(3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.

(4) Advance tax under this section shall not be collected from Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.

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