Withholding tax rates updated for telephone subscribers

Withholding tax rates updated for telephone subscribers

ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax rates for tax year 2021 to be paid by telephone subscribers for using phone services.

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

Under Section 236 of Income Tax Ordinance, 2001 person preparing telephone / Internet bill or issuing / selling prepared card for mobile phones / Internet shall deduct/collect withholding tax from telephone subscribers, Internet subscriber, purchaser of Internet Prepaid Cards, telephone subscriber and purchaser of prepaid telephone cards along with payment of telephone bill or at the time of issuance of or sales of prepared cards.

The withholding tax rates shall be:

(a) Telephone subscribers and internet

Monthly bill up to Rs, 1000: Nil

Bill exceeding 1,000: 10 percent

(b) in the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card the withholding tax rate shall be 12.5 percent of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

The collected/deducted withholding tax shall be adjustable against total payable tax liability.