The Federal Board of Revenue (FBR) has outlined the procedures for tax collection and deduction under Section 160 of the Income Tax Ordinance, 2001.
Section 160 governs the collection and deduction of tax payments and has been incorporated into the updated version of the Income Tax Ordinance, 2001, effective until June 30, 2021, which includes amendments introduced through the Finance Act, 2021.
The text of Section 160 of the Income Tax Ordinance, 2001, is as follows:
160. Payment of tax collected or deducted: Any tax that has been collected or purported to be collected under Division II of this Part or deducted or purported to be deducted under Division III of this Part or deducted or collected, or purported to be deducted or collected under Chapter XII shall be paid to the Commissioner by the person making the collection or deduction within the time and in the manner as may be prescribed.
This provision emphasizes the obligation of the entity or individual responsible for collecting or deducting tax to ensure the prompt and accurate remittance of the collected or deducted amount to the Commissioner.
The key points to understand regarding Section 160 are:
1. Tax Collection and Deduction: Section 160 covers tax amounts collected or purported to be collected under Division II, deducted or purported to be deducted under Division III, or deducted or collected, or purported to be deducted or collected under Chapter XII of the Income Tax Ordinance, 2001.
2. Payment to the Commissioner: The tax collected or deducted must be paid to the Commissioner by the entity or individual responsible for the collection or deduction. The payment should be made within the prescribed time and in the manner specified by the relevant authorities.
The inclusion of this section in the Income Tax Ordinance is part of the broader efforts by the FBR to streamline tax collection procedures and ensure the timely remittance of tax amounts to the tax authorities. Adhering to these guidelines is essential for entities and individuals to remain in compliance with tax regulations and fulfill their tax obligations.
Taxpayers and entities involved in tax collection and deduction are advised to stay informed about the specific timelines and procedures prescribed by the FBR for remitting the collected or deducted tax amounts. This proactive approach ensures a smooth and transparent tax payment process, contributing to the overall effectiveness of the tax system in Pakistan.
As the regulatory landscape evolves, the FBR continues to update and refine tax provisions to align with international best practices and promote a fair and efficient tax administration. The emphasis on timely payments and adherence to prescribed procedures reflects the FBR’s commitment to enhancing the ease of doing business and fostering a transparent and accountable tax environment in the country.
