ISLAMABAD: Federal Board of Revenue (FBR) has withdrawn the condition on individuals to act as withholding agent in case the business turnover is up to Rs100 million.
The government through Tax Laws (Second Amendment) Ordinance, 2019 introduced major change to Income Tax Ordinance, 2001.
Under section 153 of the Ordinance, individuals having turnover of Rs50 Million or above in any of the preceding Tax Years are obliged to act as withholding tax agents whilst making payments for supply of goods, rendering of services or for execution of contracts.
“Henceforth traders, being individuals and having turnover up to Rs100 million shall not be required to act as a withholding agent under section 153 of the Ordinance,” according to the FBR.
Tax experts explained that individual having turnover of Rs50 million or more in any of the preceding tax years is liable to deduct tax under section 153 while making payments against supply of goods, services and contracts.
Through the Second Amendment Ordinance, traders being individuals having turnover up to Rs100 million have been exempted from deducting tax under section 153 while making payment against supply of goods, services and contracts.
However, the FBR may clarify the year with respect to which turnover of Rs100 million will be calculated by the trader.