The Federal Board of Revenue (FBR) has issued updated rates of withholding tax on brokerage and commission during fiscal year 2021-2022.
The tax authorities collect withholding tax on brokerage and commission under Section 233 of the Income Tax Ordinance, 2001. The withholding tax rates have been updated after incorporating amendments brought through Finance Act, 2021.
The withholding tax shall collect by federal government, provincial government, local authority, company, Association of Persons (AOPs) or individual having turnover of Rs100 million or more constituted by or under any law or principal.
The tax shall be collected from recipient of brokerage or commission or agent at the time brokerage or commission is actually paid.
The tax deducted/collected shall be minimum tax liability.
WITHHOLDING TAX CARD 2021/2022
Following is the withholding tax rates:
Where any payment on account of brokerage or commission is made by the Federal Government, a Provincial Government, a Local Government, 22a company or an association of person or individual having turnover of hundred million rupees or more
In case of:
(i) Advertising agents: the tax rate shall be 10 per cent and in case the person is not appearing on the Active Taxpayers List (ATL) issued by the FBR the tax rate shall be 20 per cent.
(ii) Life insurance agents where commission received is less than Rs0.5 million per annum: the tax rate shall be 8 per cent and in case the person is not appearing on the ATL the tax rate shall be 16 per cent.
(iii) Persons not covered in 1 & 2: the tax rate shall be 12 per cent and in case persons are not appearing on the ATL the tax rate shall be 24 per cent.
