Income Tax Ordinance 2001: Tax recovery due by non-resident member of AOP

KARACHI: Federal Board of Revenue (FBR) has powers to recover outstanding tax from a resident Association of Persons (AOP) in case tax due of a non-resident, who is member of such AOP.

FBR recently updated Income Tax Ordinance, 2001 and its Section 42 explained the recovery of tax due by non-resident member of an association of persons.

Section 142: Recovery of tax due by non-resident member of an association of persons

Sub-Section (1): The tax due by a non-resident member of an association of persons in respect of the member’s share of the profits of the association shall be assessable in the name of the association or of any resident member of the association and may be recovered out of the assets of the association or from the resident member personally.

Sub-Section (2): A person making a payment under this section shall be treated as acting under the authority of the non-resident member and is hereby indemnified in respect of the payment against all proceedings, civil or criminal, and all processes, judicial or extra-judicial, notwithstanding any provisions to the contrary in any written law, contract or agreement.

Sub-Section (3): The provisions of this Ordinance shall apply to any amount due under this section as if it were tax due under an assessment order.

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