Withholding agent under section 153 of the Ordinance to be deferred to the succeeding year [Section 153(7)(i)(i)]
Withholding agent under section 153 of the Ordinance: Prior to the Finance Act, 2018 individuals and association of persons having turnover of Rs. 50 Million or above in any given Tax Year were liable to act as withholding agents and deduct tax at the rates specified in Division III of Part III of the First Schedule from the gross amount of payments being made for the sale of goods, for the rendering or providing of services or upon the execution of a contract under section 153 of the Income Tax Ordinance, 2001.
Such individuals and AOPs faced difficulty and hardship in discharging their legal obligations as withholding tax agents under section 153 of the Income Tax Ordinance, 2001 immediately upon crossing the threshold of turnover of Rs. 50 Million during the currency of a particular Tax Year.
In order to provide such individuals and Association of Persons (AOP’s) with a window to organize and prepare thereby enabling them to effectively discharge their responsibility as a withholding agent amendment has been made in section 153 of the Income Tax Ordinance, 2001.
Whereby individuals and AOP’s crossing the threshold of Rs. 50 Million during the currency of a tax year, shall, pursuant to the passage of the Finance Act, 2018 be required to act as a withholding tax agent permanently from the tax year following the tax year in which the aggregate turnover is Rs.50 million or above.