Withholding Tax Sections in Income Tax Ordinance 2001

When a taxpayer company is acting as a withholding agent, the taxpayer should know the withholding tax sections in Income Tax Ordinance 2001.

The applicability of these withholding sections and tax deduction/ collection is linked with type of taxpayers and payment it has to make. For example tax deduction/ collection under section 231A of the Income Tax Ordinance 2001 is only applicable on a banking company.

Applicability of Section 236(1)(a)

Another example is of telecommunication companies operating inside Pakistan which attracts provision of tax deduction/ collection u/s 236(1)(a) of the Income Tax Ordinance 2001 and no other organization act as an withholding agent to deduct tax u/s 236(1)(a) other than telecommunication company.

List of withholding tax sections in Income Tax Ordinance 2001

• Import u/s 148 @1%
• Import u/s 148 @2%
• Import u/s 148 @3%
• Import u/s 148 @4.5%
• Import u/s 148 @5.5%
• Import u/s 148 @6%
• Salary of Federal Government Employees u/s 149
• Salary of Provincial Government Employees u/s 149
• Salary of Corporate Sector Employees u/s 149
• Salary of Other Employees u/s 149
• Payment for Goods, Services, Contracts, Rent, etc. to a Non-Resident u/s 152(2)
• Profit on Debt to a Non-Resident u/s 152(2)
• Payment for Goods to a PE of a Non-Resident u/s 152(2A)(a) / Division II, Part III, 1st Schedule
• Payment for Transport Services to a PE of a Non-Resident u/s 152(2A)(b) / Division II, Part III, 1st Schedule
• Payment for Other Services to a PE of a Non-Resident u/s 152(2A)(b) / Division II, Part III, 1st Schedule
• Payment for Contracts to a PE of a Non-Resident u/s 152(2A)(c) / Division II, Part III, 1st Schedule
• Payment for Goods u/s 153(1)(a) @1%
• Payment for Goods u/s 153(1)(a) @1.5%
• Payment for Goods u/s 153(1)(a) @2.5%
• Payment for Goods u/s 153(1)(a) @4.5%
• Withdrawal from Pension Fund u/s 156B
• Cash Withdrawal from Bank u/s 231A
• Certain Banking Transactions u/s 231AA
• Motor Vehicle Registration Fee u/s 231B(1)
• Motor Vehicle Transfer Fee u/s 231B(2)
• Motor Vehicle Sale u/s 231B(3)
• Motor Vehicle Leasing u/s 231B(1A) @4%
• Margin Financing, Margin Trading or Securities Lending u/s 233AA
• Goods Transport Public Vehicle Tax u/s 234
• Passenger Transport Public Vehicle Tax u/s 234
• Private Vehicle Tax u/s 234
• Electricity Bill of Domestic Consumer u/s 235A
• Telephone Bill u/s 236(1)(a)
• Cellphone Bill u/s 236(1)(a)
• Prepaid Telephone Card u/s 236(1)(b)
• Phone Unit u/s 236(1)(c)
• Internet Bill u/s 236(1)(d)
• Prepaid Internet Card u/s 236(1)(e)
• Purchase by Auction u/s 236A
• Domestic Air Ticket Charges u/s 236B
• Sale / Transfer of Immovable Property u/s 236C
• Tax Deducted u/s 236C where property purchased & sold within Tax Year
• Tax Deducted u/s 236C where property purchased prior to current Tax Year
• Functions / Gatherings Charges u/s 236D
• Issuance of License to Cable Operators u/s 236F
• Renewal of License to Cable Operators u/s 236F
• Issuance of License to IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights u/s 236FRenewal of License to IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights u/s 236F
• Screening of Foreign TV drama serial or play (other than in English) u/s 236F
• Purchase of other commodities by Distributors / Dealers / Wholesalers u/s 236G
• Purchase of Fertilizer by Distributors / Dealers / Wholesalers u/s 236G
• Purchase by Retailers u/s 236H
• Educational Institution Fee u/s 236I
• Issuance / Renewal of License to Dealers / Commission Agents / Arhatis u/s 236J
• Purchase / Transfer of Immovable Property u/s 236K
• Purchase of International Air Ticket u/s 236L
• Banking transactions otherwise than through cash u/s 236P
• Education related expenses remitted abroad u/s 236R
• Advance tax on general insurance premium u/s 236U
• Advance tax on life insurance premium u/s 236U
• Advance tax on extraction of minerals u/s 236V
• Advance tax on tobacco u/s 236X

These Withholding Tax Sections in Income Tax Ordinance 2001 are important for almost for every taxpayer because one way or the other the taxpayers are effected by these Withholding Tax Sections in Income Tax Ordinance 2001.

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