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PART III
DEDUCTION OF TAX AT SOURCE
(See Division III of Part V of Chapter X)
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Now the tax will be deducted from dividend in specie as well.
Tax from non-filers will now be deducted at 17.5% instead of 15%. This will not apply to dividend payable at reduced rate of 7.5%.
Deduction rate in case of clause (b) will be 12.5%
If a Developmental REIT Scheme with the object of development and construction of residential buildings is set up by thirtieth day of June, 2018, rate of deduction will be reduced by fifty percent for three years from thirtieth day of June, 2018.
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Division IA
Profit on Debt
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Rate of deduction for non-filers increased to 17.5% from 15%.
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Division II
Payments to non-residents
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Tax will be now deducted as under from the payments made to Permanent Establishment of a non-resident:
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Nature of payment
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Filer Rate
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Non-filer
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Rate
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Rate
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Sale of goods - Company
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4%
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6%
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- Others
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4.5%
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6.5%
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Provision of services - Company
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8%
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12%
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- Others
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10%
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15%
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Contracts - Company
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7%
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10%
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- Others
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7.5%
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10%
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Tax will be deducted at the rate of 10% from payments to sports persons.
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Division III
Payments for Goods and Services
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Now the deduction of tax will be made as under from payments made to residents:
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Nature of payment
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Filer
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Non-filer
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Rate
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Rate
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Sale of goods - Company
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4%
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6%
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- Others
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4.5%
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6.5%
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Provision of services - Company
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8%
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12%
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- Others
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10%
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15%
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Contracts - Company
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7%
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10%
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- Others
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7.5%
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10%
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Tax will be deducted at the rate of 10% from payments to sports persons.
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Division VIA
Petroleum Products
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Now the rate of tax deduction will be 12% for filer and 15% for non-filer.
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PART IV
DEDUCTION OR COLLECTION OF ADVANCE TAX
Division II
Brokerage And Commission
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The rate of collection of tax under sub-section (1) of section 233 will be:
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in case of filers:
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10% of the amount of the payment, in case of advertising agents; and
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12% of the amount of payment in all other cases; and
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in case of non-filers, 15% of the amount of payment.
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Division III
Tax on Motor Vehicles
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Para (1)
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In case of goods transport vehicles, now the tax of two rupees and fifty paisa per kilogram of the laden weight will be charged for filer and four rupees per kilogram of the laden weight for non-filer.”;
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Para (2)
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Now the tax on passenger transport vehicles plying for hire will be collected as under:
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Capacity
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Rs per seat per annum
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Filer
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Non-Filer
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(i)
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Four or more persons but less than ten persons.
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50
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100
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(ii)
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Ten or more persons but less than twenty persons.
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100
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200
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(iii)
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Twenty persons or more.
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300
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500
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Para (3)
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Amounts of tax collection on other private motor vehicles has been decreased for filers but increased for non-filers.
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Engine capacity
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for filers
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for non-filer
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1.
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upto 1000cc
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Rs. 800
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Rs. 1,200
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2.
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1001cc to 1199cc
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Rs. 1,500
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Rs. 4,000
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3.
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1200cc to 1299cc
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Rs. 1,750
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Rs. 5,000
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4.
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1300cc to 1499cc
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Rs. 2,500
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Rs. 7,500
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5.
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1500cc to 1599cc
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Rs. 3,750
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Rs. 12,000
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6.
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1600cc to 1999cc
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Rs. 4,500
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Rs. 15,000
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7.
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2000cc & above
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Rs.10,000
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Rs. 30,000
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Division V
Telephone Users
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Clause (b)
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Revised provision for collection to tax is as under:
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in the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card
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14% 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”;
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Division VI
Cash withdrawal from a Bank
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Rate of collection of tax on cash withdrawal by a non-filer increased to 0.6% from 0.5%.
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Division VI A
Advance tax on transactions in Bank
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In case of non-filer, tax will be deducted at the rate of 0.6%.
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DIVISION VII
Advance Tax on Purchase, Registration and Transfer of
Motor Vehicles
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The substituted Division (Paragraph(1) provides for tax collection on registration or sale only of all motor vehicles (previously motor car or jeep only) as under:
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Engine capacity
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For filer
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For non-filer
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1.
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upto 850cc
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Rs. 10,000
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Rs. 10,000
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2.
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851cc to 1000cc
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Rs. 20,000
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Rs. 25,000
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3.
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1001cc to 1300cc
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Rs. 30,000
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Rs. 40,000
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4.
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1301cc to 1600cc
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Rs. 50,000
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Rs. 100,000
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5.
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1601cc to 1800cc
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Rs. 75,000
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Rs. 150,000
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6.
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1801cc to 2000cc
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Rs. 100,000
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Rs. 200,000
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7.
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2001cc to 2500cc
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Rs. 150,000
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Rs. 300,000
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8.
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2501cc to 3000cc
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Rs. 200,000
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Rs. 400,000
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9.
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Above 3000cc
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Rs. 250,000
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Rs. 450,000”
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Paragraph (2) of this Division now separately provides for collection of tax on registration of transfer of motor vehicles at following amounts which were previously higher as in paragraph (1) above:
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Engine capacity
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For filer
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For non-filer
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1.
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upto 850cc
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-
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5000
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2.
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851cc to 1000cc
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5,000
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15,000
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3.
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1001cc to 1300cc
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7,500
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25,000
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4.
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1301cc to 1600cc
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12,500
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65,000
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5.
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1601cc to 1800cc
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18,750
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100,000
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6.
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1801cc to 2000cc
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25,000
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135,000
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7.
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2001cc to 2500cc
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37,500
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200,000
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8.
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2501cc to 3000cc
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50,000
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270,000
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9.
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Above 3000cc
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62,500
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300,000
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The rate of tax to be collected will be reduced by 10% each year from the date of first registration in Pakistan.
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Division XIV
Advance tax on sale of distributors, dealers or wholesalers
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In case of sale of fertilizer, tax under section 235G will be collected at the rate of 0.7% from filers and at the rate of 1.4% from non-filers.
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Division XIX
Advance tax on domestic electricity consumption
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Tax will be collected under section 235A if now the monthly electricity bill is Rs 75,000 or more.
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Division XX
Advance tax on international air ticket
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Tax will now be collection under section 236L as under:
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Type of Ticket
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Rate
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1.
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First/Executive Class
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Rs.16,000 per person
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2.
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Others excluding Economy
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Rs.12,000 per person
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3.
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Economy
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NIL
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Division XXI
Advance tax on banking transactions otherwise
Than through cash
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This new Division provides that the rate of tax to be collected under section 236P will be 0.6% of the transaction for non-filers.
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Division XXII
Rate of Collection of Tax by Pakistan
Mercantile Exchange Limited
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Rates for collection of tax under section 236T will be as under:
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in case of sale or purchase of future commodity contract as per clauses (a) and (b) of sub-section (1) of section 236T.
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0.05%
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DIVISION XXIII
Payment to a resident person for right to use
machinery and equipment
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This new Division provides for the Rate of collection of tax of 10 percent of the amount paid under section 236Q.
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DIVISION XXIV
Collection of advance tax on education related expenses
remitted abroad
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This new Division provides for rate of collection of tax under section 236R at 5% of the amount of total education related expenses remitted abroad.
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THE SECOND SCHEDULE
EXEMPTIONS AND TAX CONCESSIONS
PART I
EXEMPTIONS FROM TOTAL INCOME
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Clause
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(20)
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The exemption provided to income of Rs 10,000 per annum from annuity issued by the Pakistan Postal Annuity Certificate Scheme on or after July 27, 1977 has been withdrawn by omitting this clause.
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(99A)
2nd proviso
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Profit and gains on sale of immoveable property to a Developmental REIT Scheme with the object of development and construction of residential building will now be exempt from tax upto June 30, 2020.
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(103A)
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Income from inter – corporate dividend will be available only if the return of the group has been filed.
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(126A)
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Period of exemption granted to China Overseas Ports Holding Company Ltd from Gwadar Port Operation has been extended from 20 years to 23 year starting from February 6, 2007.
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(126l)
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Profits and gains of an industrial undertaking will be exempt for 05 years beginning July 01, 2015 if:
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It is set-up by December 31, 2016; and
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Is engaged in the manufacture of plant, machinery, equipment and items with dedicated use (no multiple usage) for generation of renewable energy from sources like solar and wind.
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(126J)
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Profits and gains of an industrial undertaking will be exempt for 03 years beginning with the month in which it is set-up or commercial production is commenced, whichever is later, if:
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it is set-up between July 01, 2015 and December 31, 2016; and
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is engaged in operating warehousing or cold chain facilities for storage of agricultural produce.
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(126K)
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Profits and gains of an industrial undertaking will be exempt for 04 years beginning with the month in which it is set-up or commercial production is commenced, whichever is later, if:
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it is set-up between July 01, 2015 and June 30, 2017; and
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is engaged in operating halal meat production and has obtained halal Certificate for the period of exemption.
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(126L)
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Profits and gains of an industrial undertaking set-up in Khyber Pakhtunkhwa Province will be exempt for 05 years beginning with the month in which it is set-up or commercial production is commenced, whichever is later, if:
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it is set-up between July 01, 2015 and June 30, 2018; and
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the manufacturing unit is not set-up by splitting up or re-construction or re-constitution of an existing undertaking or by transfer of machinery or plant from an undertaking established in Pakistan before July 01, 2015.
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(126M)
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Profits and gains from transmission line project set-up between July 01, 2015 and June 30, 2018 will be exempt (no period stated) if:
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the project is owned and managed by a Company formed and registered in Pakistan for operating this project and with registered office in Pakistan;
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the Company is not formed by splitting up or re-construction or re-constitution of an existing business;
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the machinery or plant is not transferred to new business (Company) from a business carried on in Pakistan before July 01, 2015; and
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the Company is not owned by a Company whose 50% shares are not held by or it is not controlled by the Federal or Provincial or a Local Government.
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(126N)
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Profits and gains from an industrial undertaking will be exempt for 05 years from the year of commencement of business if:
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New undertaking and machinery was not used before in Pakistan;
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Commercial business commenced between July 01, 2015 and June 30, 2017;
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Industrial undertaking is engaged in manufacture of cellular mobile phones; and
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Certified by the Pakistan Telecommunication Authority.
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(141)
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Profit and gains of LNG Terminal Operators and Terminal Owners will be exempt for 05 years from the date when the commercial operations are commenced.
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(142)
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Income of Employees’ Social Security Institutions of the Provinces of Baluchistan, Khyber Pakhtunkhwa, Punjab and Sind, only from social security contributions, will be exempt.
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