Provincial registered taxpayers require to pay advance income tax

KARACHI: Persons registered for sales tax with the provincial revenue authorities are required to pay advance income tax to Federal Board of Revenue (FBR) on the basis turnover declared before the provincial revenue authorities.

According to Section 147A of Income Tax Ordinance, 2001, every provincial sales tax registered person shall be liable to pay adjustable advance tax at the rate of three per cent of the turnover declared before the provincial revenue authority.

The Section 147A is read as:

Advance tax from provincial sales tax registered person.-

Sub-Section (1): Every provincial sales tax registered person shall be liable to pay adjustable advance tax at the rate of three per cent of the turnover declared before the provincial revenue authority.

Sub-Section (2): The advance tax under sub-section (1) shall be paid monthly at the time when sales tax return is to be filed with the provincial revenue authority.

Sub-Section (3): Advance tax paid under this section may be taken into account while working out advance tax payable under section 147.

Sub-Section (4): The provisions of this Ordinance shall apply to any advance tax due under this section as if the amount due were tax due under an assessment order.

Sub-Section (5): A taxpayer who has paid advance tax under this section for a tax year shall be allowed a tax credit for that tax in computing the tax due by the taxpayer on the taxable income of the taxpayer for that year.

Sub-Section (6): A tax credit allowed for advance tax paid under this section shall be applied in accordance with sub-section (3) of section 4.

Sub-Section (7): A tax credit or part of a tax credit allowed under this section for a tax year that is not able to be credited under sub-section (3) of section 4 for the year shall be refunded to the taxpayer in accordance with section 170.

Sub-Section (8): This section shall not apply to a person whose name was appearing in the active taxpayers’ list on the thirtieth day of June of the previous tax year.

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