KARACHI: The advance tax rates have be prescribed on domestic and foreign air tickets to be collected from purchaser of the tickets.
Federal Board of Revenue (FBR) recently updated withholding tax card for Tax Year 2019. According to this the tax is adjustable against the purchasers total tax liability in a year.
Air travel agencies or persons preparing air tickets are required to deduct 5 percent advance tax of the gross amount of the ticket.
The tax will be collected under Section 236B of Income Tax Ordinance, 2001 from purchaser of domestic air ticket.
On the sale of international air ticket, an airline issuing the air ticket is required to collect Rs16,000 per ticket for first/executive class.
Another Rs12,000 as advance tax per ticket to be collected from other classes other than economy.
However, there is no advance tax on purchase of economy class international air ticket.
The advance tax on international air ticket has been collected under Section 236L of Income Tax Ordinance, 2001.