The rate of advance tax on right to use machinery during tax year 2022 will be applicable under Second Schedule of Income Tax Ordinance, 2001.
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 tax rate on right to use machinery under Section 236KQ of Income Tax Ordinance, 2001:
Rate of collection of tax under section 236Q shall be 10 percent of the amount of payment.
Following is the text of Section 236Q of Income Tax Ordinance, 2001:
236Q. Payment to residents for use of machinery and equipment.—(1) Every prescribed person making a payment in full or in part including a payment by way of advance to a resident person for use or right to use industrial, commercial and scientific equipment shall deduct tax from the gross amount at the rate specified in Division XXIII of Part IV of the First Schedule.
(2) Every prescribed person making a payment in full or in part including a payment by way of advance to a resident person on account of rent of machinery shall deduct tax from the gross amount at the rate specified in Division XXIII of Part IV of the First Schedule.
(3) The tax deductible under sub-sections (1) and (2) shall be minimum tax on the income of such resident person.
(4) In this section ―prescribed person means a prescribed person as defined in sub-section (7) of section 153.
(5) The provisions of sub-section (1) and (2) shall not apply to—
(a) agricultural machinery; and
(b) machinery leased by a leasing company, an investment bank or a modaraba or a scheduled bank or a development finance institution in respect of assets owned by the leasing company or an investment bank or a modaraba or a scheduled bank or a development finance institution.
(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.)
