Withholding Tax under Income Tax Ordinance, 2001
Introduction The concept of deemed income Section 7E of the Income Tax Ordinance 2001 means that if a person owns capital assets defined as given below such person shall be deemed or considered to earn an income equal to 5% of fair market value of such capital asset. Hence, such income will be subject to … Read more
Introduction Every prescribed person (withholding agent) shall file a withholding tax statement for each quarter under Section 165 of the Income Tax Ordinance, 2001 showing all the particulars of the payee (from whom withholding tax was deducted/collected) such as: Name of payee CNIC/NTN of payee Address of payee Amount and nature of payment Tax withheld/collected … Read more
Introduction Payment of withholding tax to the Commissioner, is the responsibility of a prescribed person (withholding agent) under Section 160 of the Income Tax Ordinance 2001 as specified in the Income Tax Rules 2002. According to the Rule 43 of the Income Tax Rules 2002, a withholding agent shall pay to the Commissioner by way … Read more
Introduction Exemption from withholding tax is applied to the Commissioner Inland Revenue (IR) under Section 159 of the Income Tax Ordinance, 2001. According to the Section 159 of the Income Tax Ordinance 2001, in response to an application in writing by a person, the Commissioner (IR) shall issue an exemption certificate or lower rate certificate, … Read more
Introduction Withholding tax on petroleum products is collected under Section 156A of the Income Tax Ordinance, 2001. Section 156A of the Income Tax Ordinance, 2001 enunciates, “Every person selling petroleum products to a petrol pump operator shall deduct tax from the amount of commission or discount allowed to the operator at the rate specified in … Read more
Introduction Withholding tax on prizes is collected under Section 156 of the Income Tax Ordinance, 2001. According to Section 156 (1) of the Income Tax Ordinance, 2001, “Every person paying prize on a prize bond, or winnings from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sale, or … Read more
Introduction Withholding tax on export proceeds is collected under Section 154 of the Income Tax Ordinance, 2001. Section 154 of the Income Tax Ordinance, 2001 enunciates as follows: Withholding Tax on Export Proceeds-Foreign Exchange “Every authorized dealer in foreign exchange shall, at the time of realization of foreign exchange proceeds on account of the … Read more
Introduction Withholding tax on property income under Section 155 of the Income Tax Ordinance, 2001 is collected on rent of immovable property. Section 155 (1) states, “Every prescribed person making a payment in full or part (including a payment by way of advance) to any person on account of rent of immovable property (including rent … Read more
Introduction Withholding tax on residents is collected under Section 153 of the Income Tax Ordinance, 2001. According to Section 81 of the Income Tax Ordinance, 2001, “A person shall be a resident person for a tax year if the person is — (a) a resident individual, resident company or resident association of persons for the … Read more
Introduction In Pakistan, withholding tax on profit on debt is applicable to interest income earned from various types of debt instruments, including bonds, debentures, and other securities. The profit on the debt has the same connotation as interest or markup. The profit on debt in Pakistan under Section 151 of the Income Tax Ordinance, 2001 … Read more
