Electricity consumption Section 235

Electricity consumption Section 235: Presently, advance tax is collected on the amount of electricity bill of a commercial or industrial consumer. However, the Finance Bill proposes to widen the scope of chargeability of this section and also added the domestic consumer under this section. Under this section only that domestic consumer is included who is not included in the active taxpayer list. In order to streamline the applicability of this section on domestic consumer section 235A has been omitted by the Finance Bill.

Due to this change, now Domestic consumer which is presently chargeable to tax under section 235A in the case where monthly electricity bill is Rs. 75000 or more would not be subject to collection of advance tax if they appear in the active taxpayer list. Furthermore, the persons who are not included in that list are now chargeable to tax taxation at the rate of:

(i) zero percent the amount of monthly bill is less than Rs.25,000; and

(ii) 7.5% if the amount of monthly bill is Rs. 25,000 or more.

Moreover, a major change has also been proposed in this section whereby said section is not applicable to the person whose entire income is subject to Final Tax Regime or minimum tax regime under any provisions of this Ordinance other than this section.

For more information on FBR’s new regulations / circulars/ SROs/ amendments in taxation laws in Pakistan please visit https://www.fbr.gov.pk/

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