4/25/2016 21st MCMC 1

AMENDMENTS IN WITHHOLDING TAXES RATES

WITHHODING TAXES ZONE

REGIONALTAX OFFICE-II, LAHORE
 TAX DEUCTION ON SALARY
(SECTION 149)
WHO WILL DEDUCT TAX?

Person responsible for paying salary to the employee will deduct tax at the time
the salary is actually paid at the given rate and will deposit in national exchequer
at the given time.

For computing the income of an employee for a tax year chargeable to tax under
the head “Salary”, the value of any perquisite provided by an employer to the
employee shall be included in salary ( SECTION 13)

TIME OF DEPOSIT
• In case of Federal / Provincial Government on the day the tax is deducted.
Rule 43(a).
• Other than Federal / Provincial Government cases, within 7 days. Rule
43(b)
 RATES OF TAX U/S 149
Where taxable income does not exceed Rs. 600,000. 0%

Where taxable income exceeds Rs. 600,000 but does 5% of the amount exceeding
not exceed Rs. 1,200,000. Rs. 600,000
Rs. 30,000 plus 10% of the
Where taxable income exceeds Rs. 1,200,000 but
amount exceeding Rs.
does not exceed Rs. 1,800,000.
1,200,000.
Where taxable income exceeds Rs. 1,800,000 but Rs. 90,000 plus 15% of the
does not exceed Rs. 2,500,000. amount exceeding Rs. 1,800,000

Where taxable income exceeds Rs. 2,500,000 but Rs. 195,000 plus 17.5% of the
does not exceed Rs. 3,500,000 amount exceeding Rs. 2,500,000

Where taxable income exceeds Rs. 3,500,000 but Rs. 370,000 plus 20% of the
does not exceed Rs. 5,000,000 amount exceeding Rs. 3,500,000

Where taxable income exceeds Rs. 5,000,000 but Rs. 670,000 plus 22.5% of the
does not exceed Rs. 8,000,000 amount exceeding Rs. 5,000,000
 TAX DEUCTION ON PAYMENTS
FOR GOODS, SERVICES AND CONTRACTS
(SECTION 153)
WHO WILL DEDUCT TAX
• Federal Government;
• A company;
• Association of persons constituted by, or under law;
• A non-profit organization;
• A foreign contractor or consultant;
• A consortium or joint venture;
• An exporter or an export house for the purpose of subsection;
• An association of persons, having turnover of fifty million rupees or above in
any of the preceding tax years;
• Individual, having turnover of fifty million rupees or above in any of the
preceding tax years;
• a person registered under the Sales Tax Act, 1990;
• A person deriving income from the business of construction and sale of
residential, commercial or other buildings (builder); or
• A person deriving income from the business of development and sale of
residential, commercial or other plots (developer).
 TAX DEUCTION ON SUPPLY OF GOODS
[153(1)(a)]
Persons appearing in the Active Taxpayers’ List

Company 4% of the gross amount

Other than company 4.5% of the gross amount

Persons not appearing in the Active Taxpayers’ List

The applicable tax rate is to be increased by 100%

(Rule-1 of Tenth Schedule to the Ordinance)

Company 8% of the gross amount

Other than company 9% of the gross amount
 TAX DEUCTION ON SERVICES
[153(1)(b)]
Persons appearing in the Active Taxpayers’ List

Company 8% of the gross amount

Other than company 10% of the gross amount
In respect of persons making payment to 1.5% of the gross amount
electronic & Print media for advertising services
Persons Not appearing in the Active Taxpayers’ List

The applicable tax rate is to be increased by 100%

 TAX DEUCTION ON CONTRACTS
[153(1)(c)]
Persons appearing in the Active Taxpayers’ List

In case of Sportsperson 10% of the gross amount

Company 7 % of the gross amount
Other than company 7.5% of the gross amount

Persons appearing in the Active Taxpayers’ List

The applicable tax rate is to be increased by 100%
(Rule-1 of Tenth Schedule to the Ordinance), i.e.
In case of Sportsperson 20% of the gross amount
Company 14 % of the gross amount
Other than company 15% of the gross amount
 TAX DEUCTION ON RENT SECTION 155
WHO WILL DEDUCT TAX?
• Federal Government.
• Provincial Government.
• Local Government.
• A company.
• A non-profit organization or a charitable institution.
• A diplomatic mission of a foreign state.
• A private educational institution, a boutique, a beauty
parlour, a hospital, a clinic or a maternity home;]
• Individuals or association of persons paying gross rent of
rupees one and a half million and above in a year.
• Any other person notified by the [Board] for the purpose of
6

this section.]
 RATES OF TAX ON RENT
(A) In case of individual or AOP
Where the gross amount of rent does not exceed Rs, 200,000 Nil
Where the gross amount of rent exceeds Rs, 200,000 but 5% of the gross amount exceeding Rs,
does not exceed Rs, 600,000 200,000
3. Where the gross amount of rent exceeds Rs, 600,000 but Rs, 20,000+10% of the gross amount
does not exceed Rs, 1,000,000 exceeding Rs, 600,000
4. Where the gross amount of rent exceeds Rs, 1,000,000 but Rs,60,000+15% of the gross amount
does not exceed Rs, 2,000,000 exceeding Rs, 1,000,000
5. Where the gross amount of rent exceeds Rs, 2,000,000 but Rs, 210,000+20% of the gross amount
does not exceed Rs. 4,000,000 exceeding Rs, 2,000,000
6. Where the gross amount of rent exceeds Rs.4,000,000 but Rs.610,000 plus 25 %of the gross
does not exceeds Rs. 6,000,000 amount exceeding Rs.4,000,000
7. Where the gross amount of rent exceeds Rs.6,000,000 but Rs.1,110,000 plus 30% of the gross
does not exceeds Rs. 8,000,000 amount exceeding Rs.6,000,000
Rs.1,710,000 plus 35% of the gross
8. Where the gross amount of rent exceeds Rs.8,000,000
amount exceeding Rs.8,000,000
(B) in case of company 15%
 BROKERAGE AND COMMISSION
(SECTION 233)
 Payment on account of brokerage or commission is
made by prescribed person.
 If the agent retains Commission or brokerage from any
amount remitted by him to the principal, he shall be
deemed to have been paid the commission or brokerage
by the principal and the principal shall collect advance
tax from the agent.
 where the principal is making payment on account of
commission to an advertising agent, directly or through
electronic or print media , the principal shall deduct tax
(in addition to tax required to be deducted under clause
(b) of sub-section (1) of section 153 on advertising
services excluding commission)
A*15
85
 BROKERAGE AND COMMISSION
A = amount paid or to be paid to electronic or print media for
advertising services (excluding commission) on which tax is deductible
under clause (b) of sub-section (I) of section 153.
TAX RATES

Not
S# DESCRIPTION Appearing
Appearing
In ATL
In ATL
1 Advertising Agents 10% 20%

2 Life Insurance Agents where Commission received is 8% 16%

less than Rs. 0.5 Million per annum

3 Persons not covered in 1 & 2 12% 24%

 TAX DEDUCTION ON AUCTION
SECTION 236A

Any person making sale by public auction / tender of any

property or goods shall deduct tax including award of any
lease to any person

CATEGORY TAX RATE

Persons appearing in the ATL 10%

Persons not appearing in the ATL 20%

 PERSONS NOT APPEARING IN ATL. (100BA )
Where the withholding agent is satisfied that person not
appearing in ATL is not required to file return/ statement may
furnish to the Commissioner a notice in writing electronically
setting out—
a) The name, CNIC or NTN and address of the person
b) The nature and amount of the transaction
c) Reasons on the basis of which it is considered that the
person was not required to file return or statement.

The Commissioner, on receipt of a notice shall within thirty

days pass an order.
SALES TAX WITHHOLDING
S WithholdingTHE
agent ELEVENTH SCHEDULE
Supplier category Rate or extent of
No. deduction
1 Federal and provincial government a)Registered persons 1/5th of Sales Tax
departments; autonomous bodies; as shown on invoice
and public sector organizations (b)
Companies as defined in the Income
Tax Ordinance, 2001 (XLIX of 2001)
.

b) Person registered 1/10th of Sales Tax

as a wholesaler, as shown on invoice
dealer or distributor

2 Federal and provincial government Unregistered Whole of the tax

departments; autonomous bodies; persons involved or as
and public sector organizations applicable to
supplies on the
basis of gross value
of supplies
 THE ELEVENTH SCHEDULE
S No. Withholding agent Supplier category Rate or extent of
deduction

3 Companies as defined in the Unregistered 5% of gross value

Income Tax Ordinance, 2001 persons of supplies
(XLIX of 2001)

4 Registered persons as recipient of Person providing Whole of sales tax

advertisement services advertisement applicable
services

5 Registered persons purchasing Unregistered Whole of sales tax

cane molasses persons applicable
 EXCLUSIONS
 Electrical energy;
 Natural gas;
 Petroleum products as supplied by petroleum production
and exploration companies, oil refineries, oil marketing
companies and dealers of motor spirit and high speed
diesel;
 Vegetable ghee and cooking oil;
 Telecommunication services;
 Goods specified in the Third Schedule to the Sales Tax
Act, 1990;
 Supplies made by importers who paid value addition tax
on such goods at the time of import; and
 Supplies made by an Active Taxpayer as defined in the
Sales Tax Act, 1990 to another registered persons with
exception of advertisement services.