KARACHI: The collection of tax from property income surged by 68 percent during first eight months (July-February) 2019/2010 of current fiscal year owing to better enforcement against persons rented out immovable properties.
Sources in Regional Tax Office (RTO)-II Karachi said that the collection of the office under this head increased to Rs1,324 million during first months of current fiscal year as compared with Rs790 million in the corresponding period of the last fiscal year.
The sources said that the collection was increased phenomenally due to better enforcement and revision in rates on the rental income.
The collection of tax from rental income is governed under Section 155 of the Income Tax Ordinance, 2001.
Section 155: Income from property
(1) Every prescribed person making a payment in full or part (including a payment by way of advance) to any person on account of rent of immovable property (including rent of furniture and fixtures and amounts for services relating to such property) shall deduct tax from the gross amount of rent paid at the rate specified in Division V of Part III of the First Schedule.
Explanation.-“gross amount of rent” includes the amount referred to in sub-section (1) or (3) of section 16, if any.
(3) In this section, “prescribed person” means – (i) the Federal Government; (ii) a Provincial Government; (iii) Local Government; (iv) a company; (v) a non-profit organization or a charitable institution; (vi) a diplomatic mission of a foreign state; (via) a private educational institution, a boutique, a beauty parlour, a hospital, a clinic or a maternity home; (vib) individuals or association of persons paying gross rent of rupees one and a half million and above in a year; or (vii) any other person notified by the Board for the purpose of this section.