Withholding tax rates on registration, transfer of motor vehicles updated

ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax rates on registration and transfer of motor vehicles for tax year 2021.

The FBR updated the withholding tax card 2020-2021 (up to June 30, 2020) incorporating amendments made to Income Tax Ordinance, 2001 through Finance Act, 2020.

The withholding tax rate under Section 231B on private motor vehicles

Under this section motor vehicle registration authority shall collection withholding tax from persons getting new locally manufactured motor at the time of vehicle transferred in their name at the time of registration of new motor vehicle.

The withheld tax shall be adjustable against liability.

The tax rate shall be increased by 100 percent for persons not appearing on the Active Taxpayers List (ATL).

The withholding tax rates under this section shall be:

Engine CapacityFor ATLFor Non-ATL
Up to 850CCRs7,500Rs15,000
851CC to 1000CCRs15,000Rs30,000
1001CC to 1300CCRs25,000Rs50,000
1301CC to 1600CCRs50,000Rs100,000
1601CC to 1800CCRs75,000Rs150,000
1801CC to 2000CCRs100,000Rs200,000
2001CC to 2500CCRs150,000Rs300,000
2501CC to 3000CCRs200,000Rs400,000
Above 3000CCRs250,000Rs500,000

Withholding tax under Section 231B(1A)

Every leasing company, scheduled bank, investment bank development finance institution, non-banking finance institution, MODARBA (Sharia compliant or under conventional mode) shall collect withholding tax from lessee at the time of lease.

The withheld tax shall be adjustable.

The tax rate shall be 4 percent of the value of motor vehicle on leasing of motor vehicle to persons not appearing in the Active Payers’ List.

The withholding tax rates under Section 231B (2)

Motor Vehicle Registration Authority shall collect withholding tax from person transferring the ownership / registration at the time of transfer.

The withheld tax shall be adjustable against the liability.

The rate of tax under sub-section (2) of section 231B shall be as follows-

Engine CapacityFor ATLFor Non-ATL
Up to 850CCRs0Rs0
851CC to 1000CCRs5,000Rs10,000
1001CC to 1300CCRs7,500Rs15,000
1301CC to 1600CCRs12,500Rs25,000
1601CC to 1800CCRs18,750Rs37,500
1801CC to 2000CCRs25,000Rs50,000
2001CC to 2500CCRs37,500Rs75,000
2501CC to 3000CCRs50,000Rs100,000
Above 3000CCRs62,500Rs125,000

The withholding tax rates under Section 231B (3)

Manufacturer of motor vehicle shall collect withholding tax from purchaser at the time of sale of vehicle.

The withheld tax shall be adjustable against tax liability.

The withholding tax rates under Division VII, Part IV of First Schedule of the Income Tax Ordinance, 2001 are as follow:

Engine CapacityFor ATLFor Non-ATL
Up to 850CCRs7,500Rs15,000
851CC to 1000CCRs15,000Rs30,000
1001CC to 1300CCRs25,000Rs50,000
1301CC to 1600CCRs50,000Rs100,000
1601CC to 1800CCRs75,000Rs150,000
1801CC to 2000CCRs100,000Rs200,000
2001CC to 2500CCRs150,000Rs300,000
2501CC to 3000CCRs200,000Rs400,000
Above 3000CCRs250,000Rs500,000

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