Finance Act 2014

RIAZ AHMAD & COMPANY
Chartered Accountants
INDEX
DESCRIPTION
INTRODUCTION
PAGE NO.
EXECUTIVE SUMMARY
25
INCOME TAX
6 45
SALES TAX
46 54
FEDERAL EXCISE DUTY
55 56
OTHER LAWS
57 58
CONTACT PARTNERS
FINANCE ACT 2014
59

INTRODUCTION
This Memorandum has been prepared to facilitate our clients in better understanding of the
changes made in income tax, sales tax, federal excise duty and other laws through the Finance Act,
2014. The changes have been explained in a concise manner and insignificant changes of
consequential, administrative, procedural or editorial nature have been ignored for the sake of
brevity.
Included under the heading of Income Tax Ordinance, 2001 is a dedicated portion, titled
General, which covers complete rates of income tax, schedule of filing of various periodical
statements, rates for deduction of income tax at source, filing date of income tax return,
computation of advance tax, etc. for convenience and ready reference of our clients.
The Finance Act, 2014, unless otherwise stated, has come into force on 01 July 2014.
This Memorandum may be accessed on our web-site: www.racopk.com
It is recommended that the text of the Finance Act, 2014 as published in the Official Gazette and
the relevant laws and notifications, wherever applicable should be referred to in considering the
interpretation of any provision. This Memorandum contains only general comments. Final decision
on any issue should not be taken without detailed consideration and professional advice.
This Memorandum should not be published in any manner without the consent of the firm. For
professional advice, you may contact our following tax experts:
Sarfraz Mahmood
Muhammad Arshad
Lahore Office
Inaam Ellahi Sheikh
Liaqat Ali Panwar

Pirzada M. Khurram
Karachi Office
Faisalabad Office
M. Kamran Nasir
LAHORE: 07 July 2014
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Atif Bin Arshad

Muddassar Mehmood
Islamabad Office

EXECUTIVE SUMMARY
Income Tax
The concept of Filer and Non-filer has been introduced in the Income Tax Ordinance, 2001. Filer
means a taxpayer whose name appears in the active taxpayers list issued by the Board from time to time
or is holder of a taxpayers card. Non-filer means a person who is not a filer.
Bonus shares issued to a shareholder of the company will now be income of the shareholder and shall be
taxed under the head of other income u/s 39. Tax collected @ 5% on day-end price on the first day of
closure of books, shall be final discharge of tax liability of the shareholder.
Holding period of a security has been enhanced to twenty four months or more, from twelve months or
more to enjoy tax @ 0% on sale of such security. Moreover, tax rates relating to capital gains have been
substantially enhanced effective from tax year 2015.
Now, capital gain arising on disposal of debt securities will also be liable to tax u/s 37A. However, in
case of a company, gain on disposal of debt securities shall be charged to tax @ 33% for the tax year
2015.
Share of profit of the company shall be excluded for the purpose of computing the total income of the
association of persons and the company shall be taxed separately at the rate applicable to the
companies, according to its share.
Any income of a trust, welfare institution, non-profit organization (NPO), educational institution being
run by NPO, religious or charitable institution, etc. were exempt from tax subject to certain conditions.
Now, 100% tax credit will be allowed, instead of straight exemption, subject to fulfilling the specified
conditions and obtaining exemption certificate from the Commissioner.
For tax year 2014 and onwards, tax payable by a company shall be higher of Corporate Tax or
Alternative Corporate Tax (ACT) applicable @ 17% on the accounting income computed after certain
adjustments.
Tax at the rate of twenty percent shall be deducted on payment for directorship fee or fee for attending
board meeting or such fee by whatever name called. Such tax deducted shall be adjustable against tax
liability of recipient of fee.
In case of non-filers, tax on dividend shall be deducted at the rate of 15% instead of 10% except where
reduced rate of 7.5% is prescribed.
For a non-filer, if yield or profit on debt paid is more than Rupees 500,000, tax at source will be
deducted at the rate of 15%. Further, in case of a non-filer, other than a company, the final tax shall be
equal to the tax deductible in the case of filer and the tax deducted in excess of that shall be advance
income tax adjustable against tax liability.
Tax will be deducted at the rate of 10% on payment in respect of contract signed by a sportsperson and
the tax so deducted shall be final tax. Moreover, withholding tax rates u/s 153 have been enhanced.
Restriction has been imposed to obtain NTN before applying for commercial or industrial connection of
electricity or natural gas.
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EXECUTIVE SUMMARY
If monthly electricity bill of a domestic consumer is Rupees 100,000 or more, adjustable advance tax at
the rate of 7.5% of such amount shall be collected along with electricity consumption charges.
Un-adjustable and non-refundable tax shall be collected from every steel melter, steel re-roller,
composite steel units, registered for the purpose of Chapter XI of Sales Tax Special Procedure Rules,
2007 at the rate of one rupee per unit of electricity consumed for the production of steel billets, ingots
and mild steel (MS products) excluding stainless steel.
Adjustable advance tax shall be collected from purchaser or transferee of immovable property at the rate
of 1% and 2% from filer and non-filer, respectively, if the value of immovable property is more than
Rupees 3 million.
Every airline, issuing ticket for journey originating from Pakistan, shall collect advance tax at the rate of
3% in case of filer and 6% in case of non-filer, on gross amount of international air ticket.
Where taxable income, other than income on which the deduction of tax is final, does not exceed
Rupees 1 million of a person holding a National Database Registration Authoritys CNIC for disabled
persons or a taxpayer of the age of not less than sixty years on the first day of that tax year, the tax
liability on such income shall be reduced by 50%.
Rate of tax imposed on taxable income of a company, other than a banking company, shall be 33% for
the tax year 2015.
The rate of tax to be deducted by every exporter or export house for services of stitching, dying, printing
embroidery, washing, sizing and weaving u/s 153(2) has been enhanced from 0.5% to 1% of the gross
amount payable.
The rate of collection of tax u/s 156A by every person selling petroleum products to petrol pump
operators has been enhanced from 10% to 12% of the amount of commission or discount allowed to the
operator.
Advance tax rate in case of subscriber of mobile or sales telephone and prepaid telephone card, has
been reduced from 15% to 14% of the amount of bill.
The rate of tax to be deducted u/s 231A on cash withdrawal from banks shall now be 0.3% in case of a
filer and 0.5% in case of non-filer.
The rate of tax to be collected from seller or transferor of immovable property u/s 236C shall be 0.5% in
case of filer and 1% in case of non-filer, of the gross amount of consideration received.
Rate of collection of advance tax on functions and gatherings u/s 236D has been reduced from 10% to
5%.
Any income of a public sector university established solely for educational purposes and not for the
purposes of profit shall be exempt from tax with retrospective effect from 01 July 2013.
Profits and gains derived by a taxpayer from a coal mining project in Sindh, supplying coal exclusively to
power generation projects shall be exempted from tax. Moreover, minimum tax u/s 113 shall also not
apply in this case.
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EXECUTIVE SUMMARY
Corporate tax rate shall be reduced to 20% of taxable income for a company setting up industrial
undertaking between 01 July 2014 to 30 June 2017, for a period of five years beginning from the month
in which the industrial undertaking is set up or commercial production is commenced, whichever is
later, if 50% of the cost of project including working capital is through owner equity foreign direct
investment.
Relaxation from furnishing wealth statement alongwith return of income for the tax year 2013 was
allowed to an individual or member of AOP whose last declared or assessed income or declared income
for the year was less than Rupees 1 million. Now, this relaxation has been extended upto tax year 2014.
In case of a banking company, net income from Dividend and Capital Gains shall be charged to tax
at the rate of 10% and 12.5% respectively, instead of gross receipts on account of dividend and capital
gain on sale of shares of listed companies. Net income will be computed after allocation of expenses
against dividend income and capital gains.
Sales Tax
Exemptions have been introduced for high efficiency irrigation equipment, green house farming and
other green house equipment, plant, machinery and equipment imported for setting up fruit processing
and preservation units in Gilgit-Baltistan, Balochistan Province and Malakand Division upto the 30th
June, 2019, plant, machinery and equipment imported for setting up industries in FATA upto the 30th
June, 2019 etc.
Exemptions in respect of plant and machinery not manufactured locally and having no compatible local
substitutes, import of raw cotton and ginned cotton, cool chain machinery and equipment, machinery,
equipment and other capital goods meant for initial installation, balancing, modernization, replacement
or expansion of oil refining, petrochemical and petrochemical downstream products etc. have been
withdrawn and subjected to sales tax at the rate of 5 percent.
Two-tier system of taxation has been introduced for retailers by withdrawing Rupees 5 million exemption
threshold. Retailers operating as units of a national or international chains of stores, retailers operating in
air-conditioned shopping malls, retailers having credit or debit card machines, retailers having electricity
bills exceeding Rupees 600,000 during last twelve months and wholesaler-cum-retailers engaged in bulk
import and supply of consumer goods to pay sales tax at the rate specified in sub-section (1) of section 3
of the Sales Tax Act, 1990 and shall observe all the applicable provisions of the Sales Tax Act, 1990 and
rules made thereunder. Other retailers to be charged sales tax on monthly electricity bills @ 5% where
the monthly bill does not exceed Rupees 20,000 and @ 7.5% where the monthly bill exceeds Rupees
20,000.
Any collection of further tax in a tax period, will be payable with the return even if excess input tax arises
in any tax period.
Abolition of SROs for exemptions and zero-rating and insertion of the respective provisions in the Sales
Tax Act, 1990. Fifth Schedule and the Sixth Schedule to the Sales Tax Act, 1990 have been expanded.
Insertion of the Eighth Schedule to the Sales Tax Act, 1990 specifying reduced rates of tax.
Restrictions on claim of input tax have been enforced under Section 8 of the Sales Tax Act, 1990.
Further, inadmissible items specified under SRO 490(I)/2004 have been merged in Section 8.
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EXECUTIVE SUMMARY
Import of finished goods of the five export oriented sectors, ready for use by the general public shall now
be chargeable to sales tax at the rate of seventeen per cent and value addition tax at the rate of two per
cent. Subsequent supply of such goods shall be charged to tax at the rate of seventeen per cent subject to
adjustment of input tax in accordance with the relevant provisions of the Sales Tax Act, 1990 and rules
made thereunder.
Sales tax shall now be charged on the import or supply of agricultural tractors at the rate of ten per cent
instead of sixteen per cent.
Sales tax shall be charged at the rate of 17 percent on bills to CNG stations, on the value of supply to
CNG Consumers as notified by the Federal Board of Revenue from time to time.
Federal Excise Duty and Sales Tax on Production Capacity (Aerated Waters) Rules, 2013 have been
repealed with effect from 01 July 2014. As a result, aerated beverages will again be subject to duty and
sales tax on retail price basis.
A new Ninth Schedule to the Sales Tax Act, 1990 has been introduced which provides fixed rates of
sales tax on: supply by Cellular Mobile Operator (CMO) of Subscriber Identification Module (SIM) Cards;
import of Cellular Mobile Phones or Satellite Phones, Smart Cellular Mobile Phones or Satellite Phones
by importer; and registration of International Mobile Equipment Identity (IMEI) number by CMOs.
Federal Excise
Rate of FED has been enhanced on locally produced cigarettes.
FED on cement shall be five per cent of the retail price. Previously, FED was Rupees 400 per metric ton.
FED on international air travel has been increased from Rupees 3,840 to Rupees 5,000 per ticket for
economy and economy plus and from Rupees 6,840 to Rupees 10,000 in the case of club, business and
first class travel. Rate of FED on chartered flights shall be 16% of the charges.
The rate of FED on telecommunication services has been reduced from 19.5% to 18.5% of the charges.
Further, telecommunication services which are subject to provincial sales tax and where such tax is
being collected by the respective Province through its own board or authority are excluded from the
purview of FED.
FED on locally manufactured motor vehicles of cylinder capacity of 1800 cc or above have been
withdrawn.
Income Support Levy
The Income Support Levy Act, 2013 has now been repealed.
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INCOME TAX ORDINANCE, 2001

Filer and non-filer
Section 2, Clauses (23) & (35B)
The concept of filer and Non-filer has been introduced in the Income Tax Ordinance, 2001. Filer, a
taxpayer whose name appears in the active taxpayers list issued by the Board from time to time or is holder
of a taxpayers card shall be allowed benefits like reduced withholding tax rates as compared to non-filers.
Non-filer means a person who is not a filer. By this amendment, non-filers will be compelled to file their
returns of income. However, practical issues regarding determination of status of filer and non-filer will arise.
Income / Bonus shares
Sections 2(29), 39, 236M & 236N
Bonus shares issued to a shareholder of the company will now be income of the shareholder and shall be
taxed under the head of other income u/s 39. The company shall collect tax @ 5% on day-end price on the
first day of closure of books, and such tax collected shall be final discharge of tax liability of the shareholder
in respect of his income from bonus shares. In case of failure to collect tax, the company shall be liable to
pay the same without prejudice to any other liability under the Ordinance.
Special judge
Sections 2(59B) & 203(1)
The Federal Government may declare that a special judge appointed under section 185 of the Customs Act,
1967 shall have jurisdiction to try offences under Income Tax Ordinance, 2001. For this purpose, definition
of special judge has been added in section 2.
Stock fund
Section 2(61A)
Stock fund means a collective investment scheme or a mutual fund where the investible funds are invested
by way of equity shares in companies, to the extent of more than seventy per cent of the investment.
Capital gain on sale of securities
Section 37A, Div VII, Part I, First Schedule
First proviso of sub-section (1) of this section has been omitted. Now, if holding period of a security is twenty
four months or more, tax @ 0% shall be charged on such securities as prescribed in Division VII of Part I of
the First Schedule. Earlier, securities held for a period of more than a year were not chargeable to tax.
Moreover, tax rates have substantially been enhanced effective from tax year 2015 as compared to previous
tax rates. Now capital gain on sale of securities will be charged to tax as under:
Holding period of security is less than twelve months

Holding period of security is twelve months or more but less
than twenty four months
Holding period of security is twenty four months or more
Tax Year 2015
Tax Year 2014
12.5%
8%
10%
0%
Sub-section (3) of this section has also been amended to include debt securities in the definition of security
for the purpose of section 37A. Now capital gain arising on disposal of debt securities will also be liable to
tax under this section. However, in case of a company, gain on disposal of debt securities shall be charged to
tax @ 33% for the tax year 2015. Debt securities have been defined by inserting sub-section (3A) in this
section as under:
(3A) For the purpose of this section, debt securities means(a) Corporate Debt Securities such as Term Finance Certificates (TFCs), Sukuk Certificates (Sharia
Compliant Bonds), Registered Bonds, Commercial Papers, Participation Term Certificates (PTCs)
and all kinds of debt instruments issued by any Pakistani or foreign company or corporation
registered in Pakistan; and
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(b) Government Debt Securities such as Treasury Bills (T-bills), Federal Investment Bonds (FIBs),
Pakistan Investment Bonds (PIBs), Foreign Currency Bonds, Government Papers, Municipal Bonds,
Infrastructure Bonds and all kinds of debt instruments issued by Federal Government, Provincial
Governments, Local Authorities and other statutory bodies.
Federal Government, Provincial Government and Local Government income
Section 49(4)
Income from sale of spectrum licenses, commonly known as 3G and 4G licenses, by Pakistan
Telecommunication Authority (PTA) on behalf of the Federal Government after first day of March 2014 shall
be treated as income of the Federal Government and not of the PTA.
Share of profits of company to be added to taxable income and principles of
taxation of associations of persons
Sections 88A & 92
Section 88A regarding taxation of profits derived by a company from an association of persons has been
omitted. Under this section, such share of profit received by a company, being a member of association of
persons, was charged to tax at the tax rate applicable to the company and the company was allowed tax
credit proportionate to the share of profit to avoid double taxation.
Now, such share of profit of the company or companies shall be excluded for the purpose of computing the
total income of the association of persons and the company or companies shall be taxed separately, at the
rate applicable to the companies, according to their share.
Special provisions relating to capital gain tax
Section 100B
Clause (d) of sub-section (2) of this section has been substituted and thereby a foreign institutional investor
being registered with NCCPL will now be eligible for taxation u/s 37A (capital gain on sale of security, in
accordance with rules laid down in Eighth Schedule) instead of taxation under normal law. However, by this
substitution, a company, in respect of debt securities only will be taxed under normal law instead of section
37A.
By virtue of this substitution, NCCPL will now withhold tax under Eighth Schedule from capital gain in case
of foreign institutional investors and will not be liable to withhold tax under Eighth Schedule on capital gain,
in case of a company, in respect of debt securities only.
Tax credit for certain persons
Sections 100C & 159, Clauses 58, 58A, 59 & 60,

Part I, Second Schedule
Any income of a trust, welfare institution, non-profit organization (NPO), educational institution being run by
NPO, religious or charitable institution, etc., was exempt from tax subject to certain conditions as mentioned
in clauses (58), (58A), (59) and (60) of Part I of Second Schedule. Most of such institutions / organizations
were not filing their returns of income and were non-compliant in respect of other provisions / obligations of
law. Therefore, a new section 100C has been introduced to compel them to follow the provisions of law.
Now, 100% tax credit will be allowed, instead of straight exemption, subject to fulfilling the specified
conditions and obtaining exemption certificate from the Commissioner. The section states as under:
100C. Tax credit for certain persons.-(1) Non-profit organizations, trusts or welfare institutions, as
mentioned in sub-section (2) shall be allowed a tax credit equal to one hundred per cent of the tax
payable, including minimum tax and final taxes payable under any of the provisions of this Ordinance,
subject to the following conditions, namely:(a) return has been filed;
(b) tax required to be deducted or collected has been deducted or collected and paid; and
(c) withholding tax statements for the immediately preceding tax year have been filed.
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(2) Persons eligible for tax credit under this section include(a) any income of a trust or welfare institution or non-profit organization from donations, voluntary
contributions, subscriptions, house property, investments in the securities of the Federal
Government and so much of the income chargeable under the head "income from business" as is
expended in Pakistan for the purposes of carrying out welfare activities:
Provided that in the case of income under the head "income from business", the exemption in
respect of income under the said head shall not exceed an amount which bears to the income,
under the said head, the same proportion as the said amount bears to the aggregate of the incomes
from the aforesaid sources of income.
(b) a trust administered under a scheme approved by the Federal Government in this behalf and
established in Pakistan exclusively for the purposes of carrying out such activities as are for the
benefit and welfare of
(i) ex-servicemen and serving personnel, including civilian employees of the Armed Forces, and
their dependents; or
(ii) ex-employees and serving personnel of the Federal Government or a Provincial Government
and their dependents, where the said trust is administered by a committee nominated by the
Federal Government or, as the case may be, a Provincial Government;
(c) a trust or welfare institution or non-profit organization approved by Chief Commissioner for the
purposes of this sub-clause;
(d) income of a university or other educational institution being run by a non-profit organization
existing solely for educational purposes and not for purposes of profit;
(e) any income which is derived from investments in securities of the Federal Government, profit on
debt from scheduled banks, grant received from Federal Government or Provincial Government or
District Governments, foreign grants and house property held under trust or other legal obligations
wholly, or in part only, for religious or charitable purposes and is actually applied or finally set
apart for application thereto:
Provided that nothing in this clause shall apply to so much of the income as is not expended
within Pakistan:
Provided further that if any sum out of the amount so set apart is expended outside Pakistan, it
shall be included in the total income of the tax year in which it is so expended or of the year in
which it was set apart, whichever is the greater, and the provisions of section 122 shall not apply
to any assessment made or to be made in pursuance of this proviso.
Explanation. Notwithstanding anything contained in the Mussalman Wakf Validating Act, 1913
(VI of 1913), or any other law for the time being in force or in the instrument relating to the trust or
the institution, if any amount is set apart, expended or disbursed for the maintenance and support
wholly or partially of the family, children or descendents of the author of the trust or the donor or,
the maker of the institution or for his own maintenance and support during his life time or payment
to himself or his family, children, relations or descendents or for the payment of his or their debts
out of the income from house property dedicated, or if any expenditure is made other than for
charitable purposes, in each case such expenditure, provision, setting apart, payment or
disbursement shall not be deemed, for the purposes of this clause, to be for religious or charitable
purposes; or
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(f)
any income of a religious or charitable institution derived from voluntary contributions

applicable solely to religious or charitable purposes of the institution:
Provided that nothing contained in this clause shall apply to the income of a private religious
trust which does not ensure for the benefit of the public.
Minimum tax on income of certain persons
Section 113
Reduced rates of minimum tax applicable to various classes of taxpayers, as provided in clauses (7) to (10)
and in (12) to (15) of Part III of Second Schedule, including standard rate of 1% have now been specified in
one place by introducing new Division IX in Part I of the First Schedule, as under:
Division IX
Minimum tax under section 113
S.No.
1.
2.
3.
4.
Person(s)
Minimum Tax as
percentage of the
persons turnover for
the year
Oil marketing companies, Oil refineries, Sui Southern Gas

Company Limited and Sui Northern Gas Pipelines Limited ( for
the cases where annual turnover exceeds rupees one billion);
(b)
Pakistani Airlines; and
(c)
Poultry industry including poultry breeding, broiler production,
egg production and poultry feed production.
(a)
Distributors of pharmaceutical products, consumer goods
including fast moving consumer goods fertilizers and cigarettes;
(b)
Petroleum agents and distributors who are registered under the
Sales Tax Act, 1990;
(c)
Rice mills and dealers; and
(d)
Flour mills.
Motorcycle dealers registered under the Sales Tax Act, 1990.
In all other cases.
0.5%
(a)
Alternative corporate tax
0.5%
0.5%
0.2%
0.2%
0.2%
0.2%
0.25%
1%
Section 113C
For tax year 2014 and onwards, tax payable by a company shall be higher of Corporate Tax or Alternative
Corporate Tax (ACT) applicable @ 17% on the accounting income computed after certain adjustments.
A new scheme of taxation, with retrospective effect, has been introduced for tax payable by a company by
inserting section 113C in the Ordinance. Under this scheme, tax payable by a company under normal tax
regime including tax payable on account of minimum tax and final taxes will be compared with ACT and
higher of them will be paid alongwith the return of income for the tax year 2014 and onwards. Salient
features are as under:
Accounting Income means the accounting profit before tax for the tax year, as disclosed in the
financial statements or as adjusted under sub-section (7) or sub-section (11) excluding share from the
associate recognized under equity method of accounting.
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"Alternative Corporate Tax" means the tax at a rate of seventeen per cent of a sum equal to
accounting income less:
exempt income
capital gain on sale of securities u/s 37A
income subject to final tax
Income subject to credit of tax u/s 65D and 65E
Income subject to tax credit u/s 100C in respect of non-profit organization, trusts or welfare
institutions
Income of a company setting up industrial undertaking through owner equity foreign direct
investment u/s (18A) of Part II of the Second Schedule
and determined after apportionment of expenses between the amounts to be excluded from
accounting income and taxable income.
Accounting income computed as above shall be treated as taxable income for the purpose of ACT.
Corporate Tax means total tax payable by the company, including tax payable on account of
minimum tax and final taxes payable, under any of the provisions of this Ordinance but not
including those mentioned in sections 8 (general provisions relating to taxes imposed on dividend,
tax on certain payments to non-resident, tax on shipping and air transport income of a non-resident),
161 and 162 (recovery of tax on failure to pay tax collected or deducted) and any amount charged
or paid on account of default surcharge or penalty and the tax payable under this section.
The excess of ACT paid over the Corporate Tax payable for the tax year shall be carried forward and
adjusted against the tax payable under Division II of Part I of the First Schedule, for following year. If
the excess tax, is not wholly adjusted, the amount not adjusted shall be carried forward to the
following tax year and adjusted in that year, and so on, but the said excess cannot be carried forward
to more than ten tax years immediately succeeding the tax year for which the excess was first
computed.
Mechanism for adjustment of excess of ACT over Corporate Tax, shall not prejudice or affect the
entitlement of the taxpayer regarding carrying forward and adjustment of minimum tax referred to in
section 113 of the Ordinance.
If Corporate Tax or ACT is enhanced or reduced as a result of any amendment, or as a result of any
order under the Ordinance, the excess amount to be carried forward shall be reduced or enhanced
accordingly.
The provisions of this section shall not apply to taxpayers chargeable to tax in accordance with the
provisions contained in the Fourth Schedule (profits of insurance business), Fifth Schedule (profits
from exploration / production of petroleum) and Seventh Schedule (profits and gains of banking
company and tax payable thereon).
Tax credit under section 65B shall be allowed against ACT.
The Commissioner may make adjustments and proceed to compute accounting income as per
historical accounting pattern after providing an opportunity of being heard.
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Return of income
Section 114(1)(b)(ix)
Only resident person registered with any Chamber of Commerce and Industry or any trade or business
association or any market committee or any professional body including Pakistan Engineering Council,
Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of
Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan will now, be
required to furnish a return of income.
Earlier all persons registered with the above stated organizations, whether resident or non-resident, were
required to file their return of income.
Appointment of the Appellate Tribunal
Section 130(4)
A person who has practiced professionally as a cost and management accountant for a period of not less than
ten years will now be eligible for appointment as an accountant member of appellate tribunal.
Imports
Section 148(8A) & Clause (9AA), Part IV,

Second Schedule
Tax collected at the time of import of ships by ship breakers shall be final tax. Hence, no tax will be
deducted u/s 153(1)(a) from ship breakers as recipient of payment for ships imported after 01 July 2014.
Salary
Section 149(3) & (4)
Tax at the rate of twenty percent shall be deducted by every person making payment for directorship fee or
fee for attending board meeting or such fee by whatever name called. Such tax deducted shall be adjustable
against tax liability of recipient of fee.
Dividends
Section 150, Div I, Part III, First Schedule
Withholding tax rates on dividend income specified at different places in the Income Tax Ordinance, 2001
have now been consolidated at one place i.e. Division I of Part III of First Schedule. Further, in case of nonfilers, tax on dividend shall be deducted at the rate of 15% instead of 10% except where reduced rate of
7.5% is prescribed.
Profit on debt
Section 151
For a non-filer, if yield or profit paid is more than Rupees 500,000, tax at source will be deducted at the rate
of 15%. Further, in case of a non-filer, other than a company, the final tax shall be equal to the tax
deductible in the case of filer and the tax deducted in excess of that shall be advance income tax adjustable
against tax liability.
Payments for goods, services and contracts
Section 153(1)(c)
Now, tax at source will also be deducted at the rate of 10% on payment in respect of contract signed by a
sportsperson under clause (c) of sub-section (1) of this section and the tax so deducted shall be final tax.
Moreover, withholding tax rates under this section have been enhanced as given in detail, in chapter titled
General in this book.
Compulsory registration in certain cases
Section 181AA
Restriction has been imposed to obtain NTN before applying for commercial or industrial connection of
electricity or natural gas. For this purpose, new section has been inserted in statute as under:
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181AA. Compulsory registration in certain cases.- (1) Notwithstanding anything contained in any law,
for the time being in force, any application for commercial or industrial connection of electricity or
natural gas, shall not be processed and such connection shall not be provided unless the person
applying for electricity or gas connection is registered under section 181.
Presently, last paid bill of electricity / gas is required to process the application for obtaining NTN. By
inserting the above quoted section, NTN has been made compulsory before processing the application for
electricity or gas connection. How the both applications will be processed simultaneously, procedure needs
to be established.
Advance tax on private motor vehicles
Section 231B
Every motor vehicle registering authority of Excise and Taxation Department is required to collect advance
tax at the time of transfer of registration or ownership of a private motor vehicle. Now a proviso has been
inserted and thereby no collection of advance tax shall be made on transfer of vehicle after five years from
the date of first registration in Pakistan.
Advance tax, adjustable against tax liability, will now also be collected by the manufacturer of a motor car or
jeep at the time of sale of motor car or jeep and by motor vehicle registering authority at the time of transfer
of registration or ownership of a private motor vehicle. Moreover, withholding tax rates, prescribed in
Division VII of Part IV of First Schedule, now ranges from Rupees 10,000 to Rupees 250,000 for filers and
from Rupees 10,000 to Rupees 450,000 for non-filers based on engine capacity of vehicles.
However, no tax shall be collected by motor vehicle registering authority, on registration of a motor car or
jeep if a person produces evidence that tax was collected from the same person in respect of same vehicle by
the manufacturer in case of locally manufactured vehicle or by the Collector of Customs at import stage of
vehicle.
Domestic electricity consumption
Section 235A
If monthly electricity bill of a domestic consumer is Rupees 100,000 or more, adjustable advance tax at the
rate of 7.5% of such amount shall be collected along with electricity consumption charges.
Tax on steel melters, re-rollers etc.
Section 235B
Following new section 235B has been inserted in the Ordinance to collect tax which will be neither
adjustable nor credit of such tax will be allowed:
235B. Tax on steel melters, re-rollers etc.- (1) There shall be collected tax from every steel melter,
steel re-roller, composite steel units, registered for the purpose of Chapter XI of Sales Tax Special
Procedure Rules, 2007 at the rate of one rupee per unit of electricity consumed for the production of
steel billets, ingots and mild steel (MS products) excluding stainless steel.
(2) The person preparing electricity consumption bill shall charge and collect the tax under subsection (1) in the manner electricity consumption charges are charged and collected.
(3) The tax collected under sub- section (1) shall be deemed to be the tax required to be deducted
under sub-section (1) of section 153, on the payment for local purchase of scrap.
(4) Tax collected under sub-section (1) shall be non-adjustable and credit of the same shall not be
allowed to any person.
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Advance tax on purchase or transfer of immovable property
Section 236K
Adjustable advance tax shall be collected from purchaser or transferee of immovable property at the
following rates:
S. No.
1
2
Period
Rate of Tax
Where value of Immovable property is up to Rupees 3 million

Where the value of Immovable property is more than Rupees 3
million
0%
Filer 1%
Non-filer 2%
Provided that the rate of tax for Non-filer shall be 1% upto the date appointed by the Board through
notification in official gazette.
For this purpose, new section 236K has been inserted as under:
236K. Advance tax on purchase or transfer of immovable property.(1) Any person responsible for
registering or attesting transfer of any immovable property shall at the time of registering or attesting the
transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII
of Part IV of the First Schedule.
(2) The advance tax collected under sub-section (1) shall be adjustable.
(3) The advance tax under this section shall not be collected in the case of the Federal Government, a
Provincial Government, a Local Government or a foreign diplomatic mission in Pakistan.
(4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government,
or Provincial Government or an Authority established under a Federal or Provincial law for
expatriate Pakistanis.
Advance tax on purchase of international air ticket
Section 236L
Every airline, issuing ticket for journey originating from Pakistan, shall collect advance tax at the rate of 3%
in case of filer and 6% in case of non-filer, on gross amount of international air tickets issued to passengers
booking one-way or return, from Pakistan. Such advance tax shall be adjustable against tax liability of filers.
Bonus shares issued by companies
Sections 236M & 236N
Regarding withheld tax on bonus shares, following sections have been inserted in the Ordinance, which are
self explanatory:
236M. Bonus shares issued by companies quoted on stock exchange.- (1) Notwithstanding anything
contained in any law for the time being in force, every company, quoted on stock exchange, issuing
bonus shares to the shareholders of the company, shall withhold five per cent of the bonus shares to be
issued.
(2)
Bonus shares withheld under sub-section (1) shall only be issued to a shareholder, if the company
collects from the shareholder, tax equal to five per cent of the value of the bonus shares issued to
the shareholder including bonus shares withheld, determined on the basis of day-end price on the
first day of closure of books.
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(3)
Tax under sub-section (2), shall be collected by the company, within fifteen days of the first day
of closure of books.
(4)
If the shareholder fails to make the payment of tax under sub-section (2) within fifteen days or the
company fails to collect the said tax within fifteen days, the company shall deposit the bonus
share withheld under sub-section (1) in the Central Depository Company of Pakistan Limited or
any other entity as may be prescribed.
(5)
Bonus shares deposited in the Central Depository Company of Pakistan Limited or the entity
prescribed under sub-section (4) shall be disposed of in the mode and manner as may be
prescribed and the proceeds thereof shall be paid to the Commissioner, by way of credit to the
Federal Government.
(6)
Issuance of bonus shares shall be deemed to be the income of the shareholder and the tax
collected by the company under sub-section (2) or proceeds of the bonus shares disposed of and
paid under sub-section (5) shall be treated to have been paid on behalf of the shareholder.
(7)
Tax paid under this section shall be a final tax on the income of the shareholder of the company
arising from issuance of bonus shares.
236N. Bonus shares issued by companies not quoted on stock exchange.- (1) Notwithstanding
anything contained in any law for the time being in force, every company, not quoted on stock
exchange, issuing bonus shares to the shareholders of the company, shall deposit tax, within fifteen
days of the closure of books, at the rate of five per cent of the value of the bonus shares on the first day
of closure of books, whether or not tax has been collected by the company under sub-section (3).
(2)
(3)
Issuance of bonus shares shall be deemed to be the income of the shareholder and tax deposited
under sub-section (1) shall be treated to have been deposited on behalf of the shareholder.
A company liable to deposit tax under sub-section (1), shall be entitled to collect and recover the
tax deposited under sub-section (1), from the shareholder, on whose behalf the tax has been
deposited, before the issuance of bonus shares.
(4)
If a shareholder neither makes payment of tax to the company nor collects its bonus shares,
within three months of the date of issuance of bonus shares, the company may proceed to
dispose of its bonus shares to the extent it has paid tax on its behalf under sub-section (1).
(5)
Tax paid under this section shall be a final tax on the income of the shareholder of the company
arising from issuance of bonus shares.
(6)
The Board may prescribe rules for determination of value of shares under sub-section (1).
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INCOME TAX ORDINANCE, 2001 THE FIRST SCHEDULE

THE FIRST SCHEDULE
Part I Division I
According to newly inserted paragraph (IB), where the taxable income in a tax year, other than income on
which the deduction of tax is final, does not exceed one million rupees of a person holding a National
Database Registration Authoritys Computerized National Identity Card for disabled persons or a taxpayer of
the age of not less than sixty years on the first day of that tax year the tax liability on such income shall be
reduced by 50%.
Division II Rate of Tax for Companies
Rate of tax imposed on taxable income of a company, other than a banking company shall be 33% for the
tax year 2015.
Division III Rate of Dividend Tax
The rate of tax imposed under section 5 on dividend received from a company shall be:
(a)
7.5% in the case of dividends declared or distributed by purchaser of a power project privatized by
WAPDA or on shares of a company set up for power generation or on shares of a company, supplying
coal exclusively to power generation projects; and
(b)
10% in all other cases:

Provided that the dividend received by a person from a stock fund shall be taxed at the rate of 12.5%
for tax year 2015 and onwards, if dividend receipts are less than capital gains:
Provided further that the dividend received by a company from a collective investment scheme or a
mutual fund, other than a stock fund, shall be taxed at the rate of 25% for tax year 2015 and onwards.
Part II Rates of Advance Tax
The rate of advance tax to be collected by the Collector of Customs from every importer of goods on the
value of the goods imported, under section 148 shall be as under:
S.No.
1
Persons
Rate
(i)
Industrial undertaking importing remeltablesteel (PCT

Heading 72.04) and directly reduced iron for its own use;
(ii) Persons importing potassic fertilizers in pursuance of
Economic Coordination Committee of the cabinets decision
No. ECC-155/12/2004 dated the 9th December, 2004;
(iii) Persons importing urea; and
(iv) Manufacturers covered under Notification No. S.R.O.
1125(I)/2011 dated the 31st December, 2011.
Persons importing pulses
Commercial importers covered under Notification No. S.R.O.

1125(I)/2011 dated the 31st December, 2011.
4
5
6
7
Ship breakers on import of ships

Industrial undertakings not covered under S. Nos. 1 to 4
Companies not covered under S. Nos. 1 to 5
Persons not covered under S. Nos. 1 to 6
FINANCE ACT 2014

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1% of import value as
increased by customsduty, sales tax and
federal excise duty
federal excise duty
federal excise duty
4.5%
5.5%
5.5%
6%


Part III
Division I Advance Tax on Dividend
The rate of tax to be deducted on gross amount of dividend paid under section 150 shall be as under:
(a)
WAPDA or on shares of a company set up for power generation or on shares of a company, supplying
coal exclusively to power generation projects;
(b)
10% for filers other than mentioned in (a) above;
(c)
15% for non-filers other than mentioned in (a) above:

Provided that the rate of tax required to be deducted by a collective investment scheme or a mutual
fund shall be:
Stock Fund
Individual
Company
AOP
10%
10%
10%
Money Market Fund, Income

Fund or any other fund
10%
25%
10%
Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains,
the rate of tax deduction shall be 12.5%
Division IA Profit on Debt
The rate of tax to be deducted under section 151 shall be 10% of the yield or profit for filers and 15% of the
yield or profit paid, for non-filers:
Provided that for a non-filer, if the yield or profit paid is rupees five hundred thousand or less, the rate shall
be ten per cent.
Division III Payments for Goods or Services
Amended tax rates in respect of payments for goods, services and contracts u/s 153 are as under:
Sale of goods [Section 153(1)(a)]
(i) 4% of the gross amount payable in the case of companies.
(ii) 4.5% of the gross amount payable in the case of other taxpayers.
Rendering or providing services [Section 153(1)(b)]
(ii) 10% of the gross amount payable in the case of other taxpayers.
Execution of contract [Section 153(1)(c)]
(ii) 7.5% of the gross amount payable in the case of other taxpayers.
(iii) 10% of the gross amount payable in the case of sportspersons.
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Division IV Exports
The rate of tax to be deducted by every exporter or export house for services of stitching, dying, printing
embroidery, washing, sizing and weaving u/s 153(2) has been enhanced from 0.5% to 1% of the gross
amount payable.
Division VIA Petroleum Products
The rate of collection of tax u/s 156A by every person selling petroleum products to petrol pump operators
has been enhanced from 10% to 12% of the amount of commission or discount allowed to the operator.
Part IV Deduction or Collection of Advance Tax
Division II Brokerage and Commission
The rate of collection of tax on brokerage and commission under section 233(1) shall be as given below:
(a) 7.5% of the amount of the payment, in case of advertising agents; and
(b) 12% of the amount of payment in all other cases.
Division III Tax on Motor Vehicles
The rate of collection of tax u/s 234 in case of other private motor cars shall be as following:
S. No.
1
2
3
4
5
6
7
Engine capacity
Tax for Filer
upto 1000cc
1001cc to 1199cc
1200cc to 1299cc
1300cc to 1499cc
1500cc to 1599cc
1500cc to 1999cc
2000cc and above
Tax for Non-filer
Rs. 1,000
Rs. 1,800
Rs. 2,000
Rs. 3,000
Rs 4,500
Rs. 6,000
Rs. 12,000
Rs.1,000
Rs. 3,600
Rs.4,000
Rs.6,000
Rs 9,000
Rs.12,000
Rs.24,000
Where the motor vehicle tax is collected in lump sum, the tax shall be collected at following rates:
S. No.
1
2
3
4
5
6
7
Engine capacity
Tax for Filer
Upto 1000cc
1001cc to 1199cc
1200cc to 1299cc
1300cc to 1499cc
1500cc to 1599cc
1600cc to 1999cc
2000cc and above
Tax for Non-filer
Rs. 10,000
Rs. 18,000
Rs. 20,000
Rs. 30,000
Rs 45,000
Rs. 60,000
Rs. 120,000
Rs.10,000
Rs. 36,000
Rs.40,000
Rs.60,000
Rs 90,000
Rs.120,000
Rs.240,000
Division V Telephone Users

Advance tax rate in case of subscriber of mobile or sales telephone and prepaid telephone card has been
reduced from 15% to 14% of the amount of bill price of prepaid telephone card.
Division VI Cash Withdrawal from Banks
The rate of tax to be deducted u/s 231A on cash withdrawal from banks shall now be 0.3% in case of a filer
and 0.5% in case of non-filer.
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Division VII Advance Tax on Purchase of Private Motor Car and Jeep
The rate of tax on registration, transfer of registration or ownership and tax to be collected by manufacturer
on sale of motor car or jeep, under sub-sections (1), (2) and (3) respectively, of section 231B shall be as
follows:
S. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Engine Capacity
Tax for Filer
Upto 850cc
851cc to 1000cc
1001cc to 1300cc
1301cc to 1600cc
1601cc to 1800cc
1801cc to 2000cc
2001cc to 2500cc
2501cc to 3000cc
Above 3000cc
Rs. 10,000
Rs. 20,000
Rs. 30,000
Rs. 50,000
Rs. 75,000
Rs.100,000
Rs.150,000
Rs.200,000
Rs.250,000
Tax for Non-filer

Rs. 10,000
Rs. 25,000
Rs. 40,000
Rs. 100,000
Rs. 150,000
Rs. 200,000
Rs. 300,000
Rs. 400,000
Rs. 450,000
Provided that the rate of tax to be collected on transfer of registration or ownership of a private motor vehicle
shall be reduced by 10% each year from the date of first registration in Pakistan.
Division X Advance Tax on Sale or Transfer of Immovable Property
The rate of tax to be collected from seller or transferor of immovable property u/s 236C shall be 0.5% of the
gross amount of consideration received in case of filer and 1% of the gross amount of consideration received
in case of non-filer.
Division XI Advance Tax on Functions and Gatherings
Rate of collection of advance tax on functions and gatherings u/s 236D has been reduced from 10% to 5%.
Division XIV Advance Tax on Sale to Distributors, Dealers or Wholesalers
Advance tax from distributors, dealers or wholesalers u/s 236G shall be collected at following rates:
Category of Sale
Filer
Fertilizers
Other than fertilizers
Rate of Tax
Non-filer
0.2%
0.4%
0.1%
0.2%
Division XVIII Advance Tax on Purchase of Immovable Property

The rate of tax to be collected from purchaser or transferee on purchase or transfer of immovable property
under section 236K shall be as following:
S. No.
1
2
Period
Rate of Tax
Where value of Immovable property is up to Rupees 3 million

Where the value of Immovable property is more than Rupees 3 million
Filer
1%
0%
Non-filer
2%
Provided that the rate of tax for Non-filer shall be 1% upto the date appointed by the Board through
notification in official gazette.
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Division XIX Advance Tax on Domestic Electricity Consumption

The rate of tax to be collected on domestic electricity consumption under section 235A shall be:
(i) 7.5% if the amount of monthly bill is Rs.100,000 or more; and
(ii) 0% if the amount of monthly bill is less than Rs.100,000.
Division XX Advance Tax on International Ticket
The rate of tax to be collected under section 236L shall be:
S. No.
1
2
Type of Ticket
Economy
Other than economy
FINANCE ACT 2014

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Rate
0%
4%

INCOME TAX ORDINANCE, 2001 THE SECOND SCHEDULE

THE SECOND SCHEDULE
Part I Exemptions from Total Income
Compensatory allowance
Clause (35)
Exemption available in respect of income representing compensation allowance payable to citizen of

Pakistan locally recruited in Pakistan Mission abroad as does not exceed 75% of his gross salary, has been
withdrawn.
Income from contribution, etc.
Clause (57)
Income derived by Sindh Province Pension Fund established under the Sindh Province Pension Fund
Ordinance, 2002, from voluntary contributions, house property and investments in securities of the Federal
Government, shall now be exempted from tax.
Different charitable institutions
Clause (66)(v) & (xxx)
Exemption on any income of Hamdard Laboratories (Waqf) Pakistan has been withdrawn by omitting subclause (v) of this clause and any income of Greenstar Social Marketing Pakistan (Guarantee) Limited has been
exempted from tax by inserting new sub-clause (xxx) in this clause.
Income derived by Collective Investment or REIT Scheme
Clause (99)
Any income derived by a Collective Investment Scheme or a REIT Scheme is exempt from tax subject to 90%
of its accounting income as reduced by capital gains is distributed amongst the unit or certificate holders or
shareholders.
Now by virtue of adding proviso after this clause, for determining distribution of at least 90% of accounting
income, the income distributed through bonus shares, units or certificates as the case may be, shall not be
taken into account.
Income of public sector university
Clause (126)
Any income of a public sector university established solely for educational purposes and not for the purposes
of profit, with retrospective effect from 01 July 2013, shall be exempt from tax.
Income from Gwader Port
Clause (126A)
By substitution of this clause, income derived by China Overseas Ports Holding Company Limited from
Gwader Port operations shall be exempted for a period of twenty years effective from 6 February 2007.
Profits from fruit processing or preservation unit
Clause (126H)
Exemption from tax has been granted in respect of profits and gains derived by a taxpayer, from a fruit
processing or preservation unit set up in Balochistan Province, Makran Division, Malakand Division, GilgitBaltistan and FATA between the first day of July, 2014 to the thirtieth day of June, 2017, both days inclusive,
engaged in processing of locally grown fruits, for a period of five years beginning with the month in which
the industrial undertaking is set up or commercial production is commenced, whichever is later.
Coal mining project in Sindh
Clause (132B) and Clause (11A) of Part - IV
Profits and gains derived by a taxpayer from a coal mining project in Sindh, supplying coal exclusively to
power generation projects shall be exempted from tax. Moreover, minimum tax u/s 113 shall also not apply
in this case.
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Special US dollar bonds
Clause (135)
By omitting this clause, exemption in respect of amount received on encashment of Special US Dollar Bond
issued under US Dollar Bonds Rules, 1998 has been withdrawn.
Part II Reduction in Tax Rates
Income from services rendered / construction contracts
outside Pakistan
Clause (3) & (3A)
Provisions of clauses (3) and (3A) have been consolidated without having any impact on tax on income from
construction contracts and services rendered outside Pakistan. Reduced rate of 1% of gross receipts shall
remain applicable in both cases provided receipts from services and income from contract are brought into
Pakistan in foreign exchange through normal banking channel. Accordingly, clause (3A) has been omitted.
Owner equity foreign direct investment
Clause (18A)
Incentive of reduced corporate tax rate has been provided to companies setting up new industrial
undertaking for a period of five years.
Now, corporate tax rate shall be reduced to 20% of taxable income for a company setting up industrial
undertaking between 01 July 2014 to 30 June 2017, for a period of five years beginning from the month in
which the industrial undertaking is set up or commercial production is commenced, whichever is later, if
50% of the cost of project including working capital is through owner equity foreign direct investment.
Part III Reduction in Tax Liability
Flying allowance of pilots
Clause (1)(a)
Reduced tax at the rate of 2.5% applicable as a separate block of income in respect of amount received as
flying allowance by pilots has been withdrawn. Now, the allowance will be taxed under following clause
(1AA).
Total allowances received by pilots
Clause (1AA)
By inserting this new clause, total allowances received by pilots of any Pakistani airline shall be taxed at the
rate of 7.5%, provided that the reduction under this clause shall be available to so much of the allowances as
exceeds an amount equal to the basic pay.
Part IV Exemption from Specific Provisions
Withholding tax on purchase of scrap
Clause (9A)
Withholding tax provisions u/s 153(1)(a) shall not apply to steel melters, steel re-rollers, composite steel units,
as a payer, in respect of purchase of scrap, provided that tax is collected in accordance with section 235B.
Provided that steel melters, steel re-rollers and composite steel units may opt to pay tax in accordance with
section 235B, for tax year 2012 and 2013, if tax liability for the said tax years is paid by the 30th day of June,
2014.
Provided further that where tax has been deducted under clause (a) of sub-section (1) of section 153 or paid
under an order under section 161, it shall not be refundable.
Withholding tax on dividend
Clause (38B) & (38C)
Exemption from provisions of withholding tax on dividend, available to Islamic Development Bank under
clause (38B) has been inserted in clause (38C) and hence clause (38B) has been omitted.
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Option to opt out of presumptive tax regime
Clause (41A), (41AA), (41AAA)
By omitting these clauses, options to opt out of presumptive tax regime offered to importers, exporters,
suppliers and service providers, subject to specified conditions, through Finance Act, 2012, stand cancelled.
However, in place thereof following clauses from (56B) to (56G) have been inserted with certain
amendments:
(56B) The provisions of sub-section (7) of section 148, and clause (a) of sub-section (1) of section 169
shall not apply to a person being a commercial importer if the person opts to file return of total income
along with accounts and documents as may be prescribed, subject to the condition that minimum tax
liability under normal tax regime shall not be less than 5.5%, of the imports, if the person is a company
and 6% otherwise.
(56C) The provisions of sub-section (3) of section 153, in respect of sale of goods and clause (a) of subsection (1) of section 169 shall not apply to a person, if the person opts to file return of total income
along with accounts and documents as may be prescribed subject to the condition that minimum tax
liability under normal tax regime shall not be less than 3.5% of the gross amount of sales, if the person
is a company and 4% otherwise.
(56D) The provisions of sub-section (3) of section 153, in respect of contracts and clause (a) of subsection (1) of section 169 shall not apply to a person if the person opts to file return of total income
along with accounts and documents as may be prescribed subject to the condition that minimum tax
liability under normal tax regime shall not be less than 6% of contract receipts, if the person is a
company and 6.5% otherwise.
(56E) The provisions of sub-section (2) of section 153 and clause (a) of sub-section (1) of section 169
shall not apply in respect of a person if the person opts to file return of total income along with
accounts and documents as may be prescribed subject to the condition that minimum tax liability
under normal tax regime shall not be less than 0.5% of gross amount of services received.
(56F) The provisions of sub-section (2) of section 156A and clause (a) of sub-section (1) of section 169
accounts and documents as may be prescribed, subject to the condition that minimum tax liability
under normal tax regime shall not be less than 10% of the commission or discount received.
(56G) The provisions of sub-section (3) of section 233 and clause (a) of sub-section (1) of section 169
accounts and documents as may be prescribed, subject to the condition that minimum tax liability
under normal tax regime shall not be less than 10% of the commission.
Companies operating trading houses
Clause (57)
Explanation for removal of doubt has been added in this clause whereby exemption from withholding tax
provisions under section 153, shall only be available as a recipient and not as withholding agent.
Wealth statement
Clause (82)
Relaxation from furnishing wealth statement along with return of income for the tax year 2013 was allowed
to an individual or member of AOP whose last declared or assessed income or declared income for the year
was less than one million rupees. Now, this relaxation has been extended upto tax year 2014.
FINANCE ACT 2014

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INCOME TAX ORDINANCE, 2001 THE THIRD & SEVENTH SCHEDULES

THE THIRD SCHEDULE
Part II Initial Allowance and First Year Allowance
The rate of initial allowance on building has been reduced from 25% to 15%.
THE SEVENTH SCHEDULE RULES FOR THE COMPUTATION OF PROFITS AND GAINS OF A BANKING
COMPANY AND TAX PAYABLE THEREON
Tax on income computed
Rule 6
Now, net income from Dividend and Capital Gains shall be charged to tax at the rate of 10% and 12.5%
respectively, instead of gross receipts on account of dividend and capital gain on sale of shares of listed
companies. Net income will be computed after allocation of expenses against dividend income and capital
gains. Such expenses shall be allocated in accordance with the formula provided in following new rules 6A
and 6B, irrespective of the quantum of actual expenses incurred to earn such incomes.
6A. For the purpose of rule 6, net income from dividend shall be computed according to the
following formula, namely:(A/C) x B
whereA is the total amount of expenditure as per this Schedule;
B is the gross amount of dividend received; and
C is the gross amount of receipts including dividend.
6B. For the purpose of rule 6, net income from capital gains shall be computed according to the
following formula, namely:(A/C) x B
whereA is the total amount of expenditure as per this Schedule;
B is the gross amount of capital gains; and
C is the gross amount of receipts including capital gains.
FINANCE ACT 2014

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INCOME TAX ORDINANCE, 2001 GENERAL

Important provisions regarding income tax rates, advance tax, rates for deduction of tax at source, filing dates
of various periodical statements and return of income, etc. are given in this part for convenience of our
clients.
INCOME TAX RATES TAX YEAR 2015
RATES OF TAX FOR COMPANIES
The rates of tax imposed on taxable income of companies falling under various categories are as under:
S. No.
1
2
3
4
Description
Rate of Tax
Modaraba Company [Clause (18), Part II, 2nd Sch.]

Company other than a banking company [Clause (I), Division II, Part I, 1st Sch.]
Banking Company (Division II, Part I, 1st Sch.)
Small Company [Paragraph (iii), Division II, Part I, 1st Sch.]
25%
33%
35%
25%
MINIMUM TAX ON INCOME OF CERTAIN PERSONS

S.No.
1.
Person(s)
(a)
Oil marketing companies, Oil refineries, Sui Southern Gas

Company Limited and Sui Northern Gas Pipelines Limited ( for the
cases where annual turnover exceeds rupees one billion);
Pakistani Airlines; and
Poultry industry including poultry breeding, broiler production, egg
production and poultry feed production.
0.5%
Distributors of pharmaceutical products, consumer goods including

fast moving consumer goods fertilizers and cigarettes;
(b)
Petroleum agents and distributors who are registered under the
Sales Tax Act, 1990;
(c)
Rice mills and dealers; and
(d)
Flour mills.
Motorcycle dealers registered under the Sales Tax Act, 1990.
In all other cases.
0.2%
(b)
(c)
2.
3.
4.
Minimum Tax as
percentage of the
persons turnover for
the year
(a)
0.25%
1%
INCOME TAX RATES ON DIVIDEND

The rate of tax imposed under section 5 on dividend received from a company shall be:
(a)
WAPDA or on shares of a company set up for power generation or on shares of a company,
supplying coal exclusively to power generation projects; and
(b)
10% in all other cases:

Provided that the dividend received by a person from a stock fund shall be taxed at the rate of 12.5%
for tax year 2015 and onwards, if dividend receipts are less than capital gains:
Provided further that the dividend received by a company from a collective investment scheme or a
mutual fund, other than a stock fund, shall be taxed at the rate of 25% for tax year 2015 and
onwards.
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The rate of tax on dividend received by a banking company from its asset management company is 20%.
Moreover, dividend received by a banking company from Money Market Funds and Income Funds will be
taxed at the rates of 25% for the Tax Year 2013 and onwards, as per proviso of Rule 6 of the Seventh
Schedule.
TAX RATES FOR INDIVIDUALS AND ASSOCIATION OF PERSONS
The rates of tax chargeable for the Tax Year 2015 are as under:
Non-Salaried Individuals and association of persons (AOP)

S.No.
Taxable Income
Rate of tax
Where the taxable income does not exceed Rs.

400,000
0%
Where the taxable income exceeds Rs. 400,000 but

does not exceed Rs. 750,000
10% of the amount exceeding Rs.

400,000
Where the taxable income exceeds Rs. 750,000 but

does not exceed Rs. 1,500,000
Rs. 35,000 + 15% of the amount

exceeding Rs. 750,000
Where the taxable income exceeds Rs. 1,500,000

but does not exceed Rs. 2,500,000

exceeding Rs. 1,500,000



Where the taxable income exceeds Rs.6,000,000
Rs. 1,322,500 + 35% exceeding Rs.

6,000,000
Salaried Individuals, where income from salary exceeds 50% of taxable income:
Sr. No.
Taxable Income
Rate of tax
Where the taxable income does not exceed Rs.

400,000
0%
Where the taxable income exceeds Rs. 400,000

but does not exceed Rs. 750,000
5% of the amount exceeding Rs. 400,000
Where the taxable income exceeds Rs. 750,000

Rs. 17,500 + 10% of the amount exceeding

Rs. 750,000
Where the taxable income exceeds Rs.

1,400,000 but does not exceed Rs. 1,500,000
Rs. 82,500 + 12.5% of the amount



Rs. 1,500,000

Rs. 140,000 + 17.5% of the amount



Rs. 2,500,000

Rs. 362,500 + 22.5% of the amount

FINANCE ACT 2014

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Sr. No.
Taxable Income
Rate of tax


Rs. 3,500,000
10

Rs. 600,000 + 27.5% of the amount

11

7,000,000
Rs. 1,425,000 + 30% of the amount

REDUCTION IN TAX LIABILITY OF SENIOR CITIZENS, DISABLED PERSONS AND TEACHERS OR

RESEARCHERS
Clause (IB), Part I, First Schedule
Where taxable income other than income on which the deduction of tax is final discharge of tax liability,
does not exceed Rupees 1,000,000, in a tax year of a taxpayer holding NADRAs CNIC for disabled person or
a taxpayer aged 60 years or more on the first day of that tax year, his tax liability on such income shall be
reduced by 50%.
Clause (2), Part III, Second Schedule
The provision to reduce the income tax liability of a full time teacher or a researcher employed in a non
profit educational or research institution duly recognized by Higher Education Commission, a Board of
Education or a University recognized by the Higher Education Commission including government training
and research institution, continues to be available. The tax liability in such cases shall be reduced by an
amount equal to 40% of the tax payable.
ADJUSTMENT OF TAX CREDIT BY EMPLOYER
Every responsible person, while deducting tax on the income chargeable under the head salary of employees,
is allowed to make adjustments of any tax withheld from employees under other heads, admissible tax credits,
excess tax deduction or deficiency arising out of any previous deduction or failure to make deduction during
the tax year under the provisions of section 149 of the Income Tax Ordinance, 2001 [Section 149(1)].
Presently following tax adjustments and tax credits are available to the salaried persons:
Adjustment of tax deducted/collected on:
motor vehicle under section 234 in respect of motor vehicle registered in employees own name;
telephone bill as subscriber of telephone;
cash withdrawals from banks; and
registration of a new motor vehicle under section 231B.
Tax credits on:
donations to approved NPOs (section 61);

investment in shares and insurance (section 62);
contribution to approved pension funds (section 63); and
profit on debt paid in respect of housing loans, etc. (section 64).
The employers will, however, be responsible to obtain documentary evidences alongwith declaration from
employees on prescribed form IT-3, for correct application of relevant provisions of law. The said
declaration and evidences are required to be retained by the employer for at least 5 years.
FINANCE ACT 2014

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VALUATION OF PERQUISITES, ALLOWANCES AND BENEFITS
In case of salaried taxpayers special allowance and medical allowance are exempt from tax under Clause
(39) and Clause (139) respectively of Part I of Second Schedule. However, value of other perquisites,
allowances and benefits provided by the employer shall be included in income of the employee in
accordance with the rules 4 to 6 of Part I of Chapter II of Income Tax Rules, 2002 as reproduced below:
4.
Valuation of Accommodation - The value of accommodation provided by an employer to the

employee shall be taken equal to the amount that would have been paid by the employer in case
such accommodation was not provided.
Provided that the value taken for this purpose shall, in any case, not be less than forty five percent of
the minimum of the time scale of the basic salary or the basic salary where there is no time scale.
Provided further that where House Rent Allowance is admissible @ thirty per cent, the value taken
for the purpose of this rule shall be an amount not less than thirty per cent of minimum of the time
scale of basic salary or the basic salary where there is no time scale.
5.
Valuation of conveyance.- The value of conveyance provided by the employer to the employee shall
be taken equal to an amount as below: (i)
(ii)
Partly for personal and

partly for official use
For personal use only
5% of:
(a) the cost to the employer for acquiring the motor vehicle; or,
(b) the fair market value of the motor vehicle at the
commencement of the lease, if the motor vehicle is taken on
lease by the employer;
10% of:
(a) the cost to the employer for acquiring the motor vehicle; or,
(b) the fair market value of the motor vehicle at the
commencement of the lease, if the motor vehicle is taken on
lease by the employer; and
6.
For the purpose of this part, employee includes a director of a company.
RATE OF TAX FOR CAPITAL GAIN ON SALE OF SECURITIES

For the tax year 2015, rate of tax for capital gain on sale of securities are as follows:
Where holding period of a security is
Less than 12
12 months or more but
24 months or
months
less than 24 months
more
12.5%
10%
0%
Mutual fund or a collective investment scheme will deduct capital gains tax at the rates specified above, on
redemption of securities (Division VII, Part I, 1st Schedule)
RATE OF TAX ON CAPITAL GAIN ON DISPOSAL OF IMMOVABLE PROPERTY
Holding period
Up to one year
More than one year but not more than two years
More than two years
FINANCE ACT 2014

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Rate of tax
10%
5%
0%


Advance tax @ 0.5% and 1% from filer and non-filer, respectively, of gross amount will be collected from the
seller at the time of registration or transfer of immovable property (Section 236C).
Advance tax shall be collected from purchaser or transfree of immovable property at the rate of 1% and 2%
from filer and non-filer, respectively if the value of immovable property is more than three million rupees
(Section 236C).
ADVANCE TAX UNDER SECTION 147
Every taxpayer whose income was charged to tax for the latest tax year under this Ordinance excluding the
followings shall pay advance tax for the year under section 147 of Income Tax Ordinance, 2001 as reduced
by the tax already paid/deducted at source in the year:
i)
ii)
iii)
iv)
Dividend received from a company (Section 5)

Income of a non resident from Pakistan-source royalty or fee for technical services, shipping and
transport (Sections 6&7)
Salary income subject to deduction of tax (Section 149)
All income where the tax collected or deducted is considered as final tax (Section 168)
Advance tax in case of an individual, will be calculated in accordance with the following formula:
(A/4)-B
Where
A
is the tax assessed to the taxpayer for the latest tax year under the Ordinance; and
is the tax paid in the quarter for which a tax credit is allowed under section 168, other than tax
deducted on dividend income, salary income or income from property.
Individual whose latest assessed income excluding incomes referred to in items (i) to (iv) above is less than
Rupees 500,000 is not required to pay advance income tax under section 147 of Income Tax Ordinance,
2001.
Where the taxpayer is an association of persons or a company, advance tax will be computed according to
the following formula:
(AxB/C)D
Where
A
is the taxpayers turnover for the quarter
is the tax assessed of the taxpayer company for the latest tax year
is turnover of the taxpayer for the latest tax year
is the total amount of tax paid/deducted in the quarter other than tax collected/deducted which is
considered as final tax.
FINANCE ACT 2014

- 28 -


Adjustable advance tax on capital gain from sale of securities shall be payable to the Commissioner within
21 days from the close of each quarter except last quarter which is payable on or before 30 June of each year.
The advance tax will be computed at following rates: [Section 147(5B)]
Where holding period of a security is less

than 6 months
Where holding period of a security is 6
months or more but less than 12 months
2% of the capital gains derived during the quarter

1.5% of the capital gains derived during the quarter
However, provisions regarding advance tax on capital gain from sale of securities are not applicable to
individual investors.
In case the taxpayer is an association of persons or a company, it will compulsorily estimate the tax payable
by it for the relevant tax year at any time before the last installment is due. In case the tax payable is more
than the tax due on the basis of tax assessed for the latest tax year, it shall furnish estimates to the
Commissioner and thereafter pay such amount, after making adjustments to the amounts already paid in
accordance with section 147(4). Similarly, according to the provisions of sub-section (6), if the tax payable is
less than the tax due on the said basis, every taxpayer who is required to pay advance tax, after furnishing the
estimates to Commissioner, will pay such estimated amount after adjustment of tax already paid. The
provision of minimum tax will also be taken into account while computing advance tax liability on such
basis.
New company or an association of persons, are required to pay advance income tax even in the first year of
their operation. The taxpayer will estimate the amount of advance tax payable on quarterly income basis and
thereafter pay such amount after taking into account minimum tax payable under section 113. If minimum
tax payable comes more than the advance tax calculated on the basis of quarterly income, then advance tax
will be paid equal to minimum tax calculated @ 1% on aggregated turnover of the quarter after adjustment of
the amount already paid during the quarter, if any.
Where the advance tax paid on the basis of estimation under sub-section (4A) or (6) of section 147 is less
than 90% of the tax chargeable for the relevant tax year, the taxpayer shall be liable to pay default surcharge
under section 205(IB) at the rate of 18% per annum on the amount by which the tax paid by him falls short of
the 90%. Such default surcharge shall be calculated from 1st day of April in that year to the date on which the
assessment is made or the 30th day of June of the financial year next following whichever is the earlier. [Subsection (1B) of Section 205]
DATE OF PAYMENT OF ADVANCE TAX
Tax Payable For
Individuals
On or Before
Companies and AOPs (excluding
Banking Company)
September quarter
15 September
25 September
December quarter
15 December
25 December
15 March
25 March
15 June
15 June
March quarter
June quarter
FINANCE ACT 2014

- 29 -


Advance tax on capital gain from sale of securities is payable within 21 days from the close of each quarter
except last quarter which is payable on or before 30 June of each year.
Banking company will be required to pay advance tax under section 147 in 12 equal installments on or
before 15th of every month. [Rule 5(1) of the Seventh Schedule]
PAYMENT OF TAX COLLECTED / DEDUCTED (RULE 43 OF INCOME TAX RULES, 2002)
Tax collected / deducted by
Deposit into Government treasury
Federal / Provincial Government
On the same day
Other persons
Within 7 days from the end of each week ending on Sunday
DATE OF FILING OF STATEMENTS UNDER SECTION 165 (Rule 44 of Income Tax Rules, 2002)
Every prescribed person shall furnish or e-file statement under sub-section (1) of section 165 by 15th day of
the month following the month to which the withholding tax pertains.
However, the Commissioner may grant extension for filing of statement, on application by the taxpayer, if he
is satisfied that a reasonable cause exists for non-furnishing of statement by the due date. [Section. 165(4)]
ANNUAL STATEMENT
Annual statements will be furnished on or before 31 August of each year by the person deducting tax from
salary under section 149. [Section 165(6)]
DATE OF FILING OF RETURN OF INCOME / STATEMENT UNDER SECTION 115(4)
Category of Taxpayer
Date of Filing
Companies: (For return under section 114, statements under sections 115(4) and 165)
Having tax year ending between 01 January to 30 June

Other cases
Annual Statement of deduction of Income tax from salary
31 December
30 September
31 August
Other than Companies
Annual Statement of deduction of Income tax from salary

Return of income through e-portal in the case of salaried person
Statement of final tax under section 115(4)
Return of income
FINANCE ACT 2014

- 30 -
31 August
31 August
31 August
30 September

INCOME TAX ORDINANCE, 2001 GENERAL - SUMMARY OF WITHHOLDING TAX REGIME

Section
Nature of Payment / Transactions
148
1.(i) Import of remeltable steel (PCT

Heading 72.04) by industrial undertaking
for own use [Sr. No. 1(i) of Table, Part II, 1st
Sch.]
1.(ii) Import of potassic fertilizers in
pursuance of Economic Coordination
Committee of the Cabinets decision No.
ECC-155/12/2004 dated 09 December
2004 [Sr. No. 1(ii) of Table, Part II, 1st Sch.]
1.(iii) Import of Urea [Sr. No. 1(iii) of Table,
Part II, 1st Sch.]
1(iv)
Manufacturers
covered
under
Notification No. S.R.O. 1125(I)/2011 dated
31 December 2011 [Sr. No. 1(iv) of Table,
Part II, 1st Sch.]
2. Import of pulses [Sr. No. 2 of Table, Part
II, 1st Sch.]
3. Commercial importers covered under

Notification No. S.R.O. 1125(I)/2011 dated
31 December 2011[Sr. No. 3 of Table, Part
II, 1st Sch.]
4. Ship breakers on import of ships [Sr. No.
4 of Table, Part II, 1st Sch.]
5. Industrial undertakings not covered
under S. Nos. 1 to 4 [Sr. No. 5 of Table,
Part II, 1st Sch.]
6. Companies not covered under S. Nos. 1
to 5 [Sr. No. 6 of Table, Part II, 1st Sch.]
7. Persons not covered under S. Nos. 1 to
6 [Sr. No. 7 of Table, Part II, 1st Sch.]
Tax Rate for

Deduction / Collections
increased by customs
duty, sales tax and federal
excise duty
Responsibility for
Deduction / Deposit
Collector of customs
-do-
-do-
-do-
-do-
-do-
-do-
excise duty
excise duty
4.5%
5.5%
5.5%
6%
FINANCE ACT 2014

- 31 -
Remarks
Final - except the followings (Sec.148(7)):
(a) raw material, plant, machinery, equipment
and parts by an industrial undertaking for
its own use.
(b) fertilizer by manufacturer of fertilizer.
(c) Motor vehicles in CBU condition by
manufacturer of motor vehicles.
(d) Large import houses.
(e) Foreign produced film imported for the
purpose of screening and viewing.
(f) Edible oil and packing material (will be
treated as minimum tax) [Sec. 148(8)].


Section
149
Basic salary and taxable allowances
Tax Rate for

Average rate
Responsibility for
Deduction / Deposit
Employer
Remarks
Adjustable. Exempt where the taxable income

does not exceed Rupees 400,000. [Cl (IA),
Division I, Part I, 1st Sch.]
Tax deducted at source of the employee, short /
excess tax deducted from salary, tax credits
under sections 61,62,63,64, etc. can be
adjusted by the employer. [Sec. 149(1)].
Payment of salary more than Rupees 15,000
should be through crossed cheques or direct
transfer of funds to the employees bank
account. [Sec. 21(m)]
(3)
150
Directorship fee or fee for attending board

meeting or such fee by whatever name
called
i Dividend declared or distributed by
purchaser of power project privatized by
WAPDA. [Cl. (17), Part II, 2nd Sch].
ii Dividend declared or distributed by
power
generation
companies
and
companies, supplying coal exclusively to
power generation projects.[Division I, Part
III, 1st Sch.]
- Filers other than mentioned in (i) and (ii)
above
- Non-filers other than mentioned in (i) and
(ii) above
20%
Employer / responsible
person for making
payment
Every person paying
dividend
7.5%
Adjustable
Final
7.5%
Every person paying

dividend
Final
10%
Every person paying

dividend
Every person paying
dividend
Final
15%
Final
Followings are exempt:
- any income derived from inter-corporate
dividend within the group companies entitled to
group taxation under section 59AA or 59B. [Cl
(103A), Part I, 2nd Sch.]
FINANCE ACT 2014

- 32 -


Section
Tax Rate for

Responsibility for
Deduction / Deposit
Remarks
- Payment to approved Pension fund,
recognized
provident
fund,
approved
superannuation fund or approved gratuity fund
etc.[Cl. (47B), Part IV, 2nd Sch.]
151(1):
For filer
For Nonfiler
(a)
Yield on an account, deposit or a

certificate under the National Saving
Scheme or post office saving account
10%
15%
Every person making

payment
Final tax for a person other than a company and

for non filer, equal to tax deductible in case of
filer.
(b)
Profit on a debt, being an account or

deposit maintained with the Banking
company or financial institution
Profit on any security other than that
referred in Clause (a), issued by Federal
Government, Provincial Government or
local Government.
10%
15%
Banking company or
financial institution
10%
15%
Federal Government,
Provincial Government
or local Government
Profit on bond, certificate, debenture,

security or instrument of any kind to any
person other than financial institution
10%
15%
Banking company,
financial institution, etc.
If the yield or profit paid is Rupees 500,000 or

less, the rate of tax for non-filer shall be 10%
No tax will be deducted in following cases:
Yield or profit on investment in Bahbood
Saving Certificates or Pensioners Benefit
Account [Cl. (36A), Part IV, 2nd Sch]
- If monthly installment in monthly income
saving scheme does not exceed Rupees 1,000[Cl. (59) (iv) (b), Part IV, 2nd Sch.].
- Any yield from National Saving Schemes of
Directorate of National Savings where
investment was made on or before 30 June
2001 and any income derived from Mahana
Amdani Account where monthly installment
does not exceed Rupees 1,000 shall continue to
remain exempt and any person paying such
yield or income shall not deduct tax u/s 151.
The recipient of such receipt or income is not
required to produce exemption certificate in this
regard [S. 239(14)]
(c)
(d)
152
(1)
Royalty or fee for technical services to non

resident
15%
Every person making

payment
FINANCE ACT 2014

- 33 -
Final


Section
(1A)
Tax Rate for

6%
Every person making

payment
Final
(1AA)
Payments to non-resident on account of

insurance or re-insurance premium
5%
Every person making

payment
Final
(1AAA)
Payment for advertisement services to nonresident media person relaying from

outside Pakistan
10%
Every person making

payment
Final
(2)
Payment to non-resident other than

amount to which sub-section (1), (IA),
(IAA) or (IAAA) above applies
20%
Every person making

payment
Adjustable
(2)
Payment to non-resident having no PE in

Pakistan, in respect of profit on debt [Cl.
(5A) Part II, 2nd Sch.]
10%
Every person making

payment
Final
(2A)(a)
Payment to PE for sale of goods
3.5%
Every person making

payment
Adjustable
(2A)(b)
i) Payment to PE for transport services
2%
Adjustable
ii) Payment to PE for services in other cases
6%
Every person making

payment
Every person making
payment
Payment to PE in any other case
6%
Every person making

payment
Adjustable
Every prescribed person

making payment
Final
(Adjustable for
manufacturing co. &
listed co.)
153
(1)(a)
persons
Remarks
on
(2A)(c)
Payment to non-resident
account of certain contracts
Responsibility for
Deduction / Deposit
-Sale of rice, cotton seed or edible oil

[Div III, Part III, 1st Sch.]
1.5%
Subject to proviso of
clause (5A) of Part II
of 2nd Schedule
Adjustable
Gross
amount
payable for sale of
goods shall include
the
sales
tax.[S.153(1)]
Tax
FINANCE ACT 2014

- 34 -
will
not
be


Section
Tax Rate for

Responsibility for
Deduction / Deposit
Remarks
deducted on account
of payments made
for:
-Sale of any other goods

[Div III, Part III, 1st Sch.]
--in case of companies
--in case of other taxpayers
-Sale of cigarettes and pharmaceutical
products by distributors of such products
and by large distribution houses subject to
the fulfillment of conditions u/s 148(7). [Cl.
(24A), Part II, 2nd Sch.]
Local sales, supplies to sales tax zero rated

taxpayers as per clause (45A) of Part IV of
2nd Schedule.

making payment
4%
4.5%
1%

making payment
1%
Every person making

payment
FINANCE ACT 2014

- 35 -
Final
(Adjustable for
manufacturing co. &
listed co.)
Final
(Adjustable for
manufacturing co. &
Listed co.)
Sale of goods not

exceeding
Rs.
25,000 in a financial
Year
Final
Tax will not be

deducted on account
of payments made for
news print media
Services
and
execution of contracts
not exceeding Rs.
10,000 in a financial
year. Provided that
where
the
total
payments
in
a
financial year, exceed
Rs. 25,000/10,000 as
stated above, the
taxpayer will deduct
tax from the payments
including
the
payments
made
earlier
without
deduction
of
tax
during
the
same
financial
year
[SRO586(1)/91 dated
30.06.1991]


Section
(1)(b)
(3A)
Rendering or providing of services:

[Cl. (2), Div III, Part III, 1st Sch.]
- transportation
- others:
- in case of companies
- in case of other taxpayers
Services provided to sales tax zero rated
taxpayers as per clause (45A) of Part IV of
2nd Schedule
Execution of a contract (Residents)
[ Cl. (3), Div III, Part III, 1st Sch.]
- in case of companies
- in case of other taxpayers
- in case of sportsperson
Payments made by every exporter or an
export house to a resident person or
permanent establishment in Pakistan, on
account of rendering of services of
stitching, dying etc. [Cl. (3), Division IV,
Part III, 1st Sch.]
Realization of foreign exchange on
account of export of goods by exporter.
Commission due to an indenting
commission agent.
Sale of goods to an exporter under in land
back to back L/C.
Export of goods Export Processing Zone
(3B)
Indirect exporter
(1)(c)
(2)
154(1)
(2)
(3)
Tax Rate for

Responsibility for
Deduction / Deposit
Remarks

making payment
2%
Minimum
8%
10%
1%
Adjustable
Minimum
Minimum
Every person making

payment
making payment
7%
7.5%
10%
1%
Every exporter or export

house
Final
(Adjustable for listed
companies)[Sec.153(3)]
Final
Final
services in respect of
advertising services.
Tax deducted on
account
of
the
followings will not be
final tax: [Sec.153(3)]
Sale of goods and
execution of contracts
by a public company
listed on a registered
stock exchange in
Pakistan.
Advertisement
services by owners of
newspaper and
magazines.
Rendering or
providing of service.
1%
Every authorized dealer

in foreign exchange
Every authorized dealer
in Foreign Exchange
Every banking company
5%
1%
Final
Final
Final
1%
Export Processing Zone

Authority
Final
1%
Direct exporter, export

house
Final
FINANCE ACT 2014

- 36 -


Section
(3C)
155
Clearing of goods
Payment in full or part (including advance)
on account of rent of immovable property
(including rent of furniture and fixture and
services relating to such property)
Individuals and Association of Persons
where the gross amount of rent is:
Up to Rs. 150,000
1%
Responsibility for
Deduction / Deposit
Remarks
Final
Prescribed persons as
mentioned
in
subsection (3) of section 155
Adjustable
Nil
Rs. 150,001 Rs. 1,000,000
10% of the amount

exceeding Rs.150,000
Adjustable
Over Rs. 1,000,000
Rs. 85,000 + 15% of the

amount exceeding Rs.
1,000,000
15%
15%
Adjustable
156
Company
- Payment of prize on a prize bond or
cross word puzzle.
156(A)
- Payment on winning from a raffle, lottery,

prize on winning a quiz, prize offered by
companies for promotion of sales.
Commission paid or discount allowed to
petrol pump operator
Withdrawal of balance under pension
fund:
156(B)
Tax Rate for

(a) Withdrawn before the retirement age

(b) Withdrawn if in excess of 50% of
accumulated balance at or after the age of
retirement
Every person making

payment
Adjustable
Final
20%
Every person making

payment
Final tax
12%
Every person selling

petroleum products
Pension fund manager
Final tax
Average rate [Sec. 12(6)]

of tax for the last 3 years
or tax rate for the year
which ever is less
- do -
FINANCE ACT 2014

- 37 -
Adjustable Tax
Where the prize is not

in cash, the person
while giving the prize
shall collect tax on
the fair market value
of
the
prize.
[Sec.156(2)]
Tax will not be

deducted
i) in care of disability
ii) on share of the
nominated survivor of
the deceased person
iii) invested in an
approved
income
payment plan


Section
Tax Rate for

Responsibility for
Deduction / Deposit
Remarks
iv) paid to life
insurance company
for
purchase
of
approved
annuity
plan
TRANSITIONAL ADVANCE TAX

231(A)
Cash withdrawal from a bank:

- For filers
- For non-filers
Banking company
-do-do-
0.3%
0.5%
Adjustable tax - No tax deduction, if cash

withdrawal does not exceed Rupees 50,000, in
a day. However, if cash amount withdrawn
exceeds Rs. 50,000 in a day, tax will be
deducted on the whole amount withdrawn.
[Circular No. 9 of 2008 dated 15 August 2008].
-Further, no advance tax will be collected from
government, a foreign diplomat, a diplomatic
mission in Pakistan, foreign currency accounts
or a person who produces exemption certificate
from the Commissioner.
231(AA)
Sale of various banking instruments against

cash, receipt of cash on cancellation of
any of these instruments and transfer of
any sum against cash through online
transfer, telegraphic transfer, mail transfer
or any other mode of electronic transfer.
231(B)(1)
Registration of a new locally manufactured
0.3%
FINANCE ACT 2014

- 38 -
Banking company, nonbanking financial

institution, exchange
company, authorized
dealer of foreign
exchange.
Adjustable No tax will be collected in case of

inter bank or intra bank transactions and where
payment is made through crossed cheque.
No tax will be collected where sum total of the
transaction does not exceed Rupees 25,000 in a
day.
Further, tax will not be deducted on transactions
made by Federal or a Provincial Government,
foreign diplomat or a diplomatic mission in
Pakistan or a person who produces a certificate
from the Commissioner that his income during
the tax year is exempt.
Motor vehicle
Adjustable - No tax will be collected in case of:


Section
Tax Rate for

motor vehicle:
(2)
(3)
233
registration authority of
Excise and Taxation
Department
Transfer of registration or ownership of a

motor vehicle:
Sale of motor car or jeep:
Engine Capacity
upto 850 cc
851 cc to 1000 cc
1001 cc to 1300 cc
1301 cc to 1600 cc
1601 cc to 1800 cc
1801 cc to 2000 cc
2001 cc to 2500 cc
2501 cc to 3000 cc
Above 3000 cc
Payment on account of brokerage or
commission made to a person:
- Commission agents other than advertising
agents and export indenting commission
agents
Responsibility for
Deduction / Deposit
do
Manufacturer of motor
car or jeep
For
Filer
(Rupees)
10,000
20,000
30,000
50,000
75,000
100,000
150,000
200,000
250,000
For Nonfiler
(Rupees)
10,000
25,000
40,000
100,000
150,000
200,000
300,000
400,000
450,000
12%
-Advertising agents
7.5%
233A(I)
- Purchase of shares as per clause (a)

- Sale of shares as per clause (b)
0.01%
0.01%
233(AA)
- Profit or mark-up or interest earned by

member, margin financer, or security
lender
10%
FINANCE ACT 2014

- 39 -
Remarks
-
Federal / Provincial/ Local Government

a foreign diplomat / diplomatic mission in
Pakistan.
- Tax will not be collected if vehicle is

transferred after five years from the date of
registration in Pakistan.
- Rate of tax to be collected shall be reduced by
10% each year from the date of first registration
in Pakistan.
- Tax will not be deducted if a person produces
evidence that tax while transfer of registration or
ownership in case of locally manufactured or
tax u/s 148 in the case of imported vehicle was
collected from the same person in respect of the
same vehicle.
Federal
Government,
Provincial Government,
Local Government, a
Company
or
an
Association of Persons
(termed as principal)
Final
Stock Exchange
Stock Exchange
Adjustable
Adjustable
NCCPL
Adjustable


Section
234
Tax Rate for

Advance tax will be collected at the time

of collecting motor vehicle tax:
(1) In the case of goods transport vehicles
Motor vehicle tax

Collecting Authority
Rupee 5 Per Kilogram of
the laden weight
(2) In the case of passenger transport

vehicles plying for hire with registered
seating capacity of:
a) Four or more persons but less than ten
persons
Rupees 25 per seat

per annum
b) Ten or more persons but less than

twenty persons
c) Twenty persons or more
Rupees 60 per seat per

annum
Rupees 500 per seat per
annum
(3) Other private motor cars with engine

capacity of:
a) up to 1000 cc
b) 1001 - 1199 cc
c) 1200 - 1299 cc
d) 1300 - 1499 cc
e) 1500 - 1599 cc
f) 1600 1999 cc
g) 2000 cc and above
Responsibility for
Deduction / Deposit
For filers
(Rupees)
1,000
1,800
2,000
3,000
4,500
6,000
12,000
For non-filers
(Rupees)
1,000
3,600
4,000
6,000
9,000
12,000
24,000
FINANCE ACT 2014

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Remarks
Adjustable
No advance tax shall be collected in case of
motor vehicles owned by the Federal /
Provincial or local Government.
No advance tax after 10 years from the date of
first registration in Pakistan on vehicle with
registered laden weight less than 8120 Kgs.[ S.
234(4)]
Advance tax after period of 10 years from the
date of first registration of vehicle in Pakistan
shall be collected at the rate of Rupees 1200 per
annum. (for category of 8120 Kgs or more) [Cl.
(IA) of Division III, part IV, 1st Sch.]
Advance tax on passenger transport vehicles
with registered seating capacity of ten or more
persons, shall not be collected after a period of
10 years from 1st day of July of the year of make
of the vehicle. [S. 234(3)].
In case of motor cars used for more than 10
years in Pakistan, no advance tax shall be
collected after a period of 10 years. [S. 234(2A)]


Section
234A
235

(4) Where the motor vehicle tax is
collected in lump sum:
a) up to 1000 cc
b) 1001 - 1199 cc
c) 1200 - 1299 cc
d) 1300 - 1499 cc
e) 1500 - 1599 cc
f) 1600 1999 cc
g) 2000 cc and above
Advance tax shall be collected on the
amount of gas bill of a Compressed
Natural Gas (CNG) station.
Rate of collection of advance tax on
electricity bill of commercial or industrial
consumers,
where the amount of bill:
(a) does not exceed Rs. 400
(b) Rs. 401 - 600
(c) Rs. 601 - 800
(d) Rs. 801 - 1,000
(e) Rs. 1,001 - 1,500
(f) Rs. 1,501 - 3,000
(g) Rs. 3,001 - 4,500
(h) Rs. 4,501 - 6,000
(i) Rs. 6,001 - 10,000
(j) Rs. 10,001 - 15,000
(k) Rs. 15,001 - 20,000
(l) Exceeding Rs. 20,000
- Commercial consumers
- Industrial consumers
Tax Rate for

For filers
For non-filers
(Rupees)
(Rupees)
10,000
10,000
18,000
36,000
20,000
40,000
30,000
60,000
45,000
90,000
60,000
120,000
120,000
240,000
4%
Rupees
80
Rupees 100
Rupees 160
Rupees 300
Rupees 350
Rupees 450
Rupees 500
Rupees 650
Rupees 1,000
Rupees 1,500
Responsibility for
Deduction / Deposit
Remarks
The person preparing

gas consumption bill
Final

electricity bills
No tax shall be collected from the taxpayers

who are registered as exporter or manufacturers
of carpets, leather and articles thereof, surgical
goods, sports goods and textile and articles
thereof. [Cl (66) Part IV, 2nd Sch].
No advance tax shall be collected from a
person who produces a certificate from
Commissioner that his income during the tax
year is exempt from tax. [S. 235(3)]
As per section 235(4), tax collected will be:

- In case of company, adjustable.
- In case of other than Company:
- minimum tax up to monthly bill of Rs. 30,000
- adjustable if monthly bill exceeds Rupees
30,000
10%
5%
FINANCE ACT 2014

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Section
235A
Rate of collection of advance tax on the

amount of electricity bill of domestic
consumer where the amount of bill is:
(i) Rupees 100,000 or more
(ii) Less than Rupees 100,000
Rate of advance tax to be collected from
steel melters, steel re-rollers, composite
steel units, registered for the purpose of
chapter XI of Sales Tax Special Procedure
Rules, 2007 for electricity consumed for
the production of steel billets, ingots and
mildsteel (MS Products) excluding stainless
steel
Advance tax shall be collected on account
of the following:
235B
236
a) in case of telephone subscriber (other

than mobile phone subscriber) where the
amount of monthly bill exceeds Rs. 1,000
b) in case of subscriber of mobile
telephone and prepaid telephone card
Tax Rate for

7.5%
0%
Rupees 1 per unit of
electricity consumed for
such production
Responsibility for
Deduction / Deposit

electricity bill
-do-
Adjustable

telephone bills / issuing
prepaid card
Adjustable - No advance tax shall be collected

from Government, a foreign diplomat, a
diplomatic mission in Pakistan, or a person who
produces a certificate from the Commissioner
that his income during the tax year is exempt
from tax. [S. 236(4)]
Any person making sale

by public auction or
auction by a tender
Adjustable
The airline issuing air

ticket
Adjustable - No Tax shall be collected from the

Federal or a Provincial Government or holder of
exemption certificate. Section [236b (3)]
10% of the exceeding

amount of bill.
236A
Collection of advance tax at the time of

sale by public auction or auction by a
tender
14% of the amount of bill

or sales price of prepaid
telephone card or sale of
units
through
any
electronic medium or
whatever form.
10% of the gross sale
price of any property or
goods sold by auction.
236B
Collection of advance tax on purchase of

domestic air ticket.
5% of the gross amount

of air ticket.
FINANCE ACT 2014

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Remarks
Non-adjustable Tax collected shall be deemed

to be deducted under sub-section (1) of section
153 on the payment for local purchase of scrap.
- Credit of tax shall not be allowed to any
person


Tax Rate for
Responsibility for
Deduction / Deposit
Advance tax on sale or transfer of

immovable property
0.5% for filer and 1% for

non-filer of gross amount
of the consideration
received
The person responsible

for registering or
attesting the transfer
Adjustable - No advance tax will be collected

from
Federal,
Provincial
and
Local
Governments.
Advance tax on functions and gatherings
5% of the total amount of

the bill
Prescribed person as
mentioned in clause (b)
of sub-section (4) of
section 236D
Adjustable
(2)
In case where food, service or any other

facility is provided
5% of the amount paid

for such food, service or
facility
236E
Advance tax on foreign produced T.V

plays and serials:
(a) Foreignproduced T.V drama
Serial
(b) Foreignproduced T.V play
Section
236C
236D(1)
236F(1)
Rs. 100,000 per episode

Rs. 100,000 for single
episode
H
H-l
H-II
R
Licensing authority
-do-
Advance tax on cable operators and other

electronic media shall be as follows:
License Category
-do-
Pakistan Electronic
Media Regulatory
Authority (PEMRA)
Tax on
License fee
Tax on
Renewal
Rs. 7,500
Rs. 10,000
Rs. 25,000
Rs. 5,000
Rs. 10,000
Rs. 15,000
Rs. 30,000
Rs. 30,000
FINANCE ACT 2014

- 43 -
Remarks
Adjustable
Adjustable
Adjustable
Adjustable


Section

B
B-l
B-2
B-3
B-4
B-5
B-6
B-7
B-8
B-9
B-10
236G(1)
Advance tax on sales to distributors,

dealers and wholesalers:
- Fertilizers
- Other than fertilizers
Tax Rate for

Rs. 5,000
Rs. 30,000
Rs. 40,000
Rs. 50,000
Rs. 75,000
Rs. 87,500
Rs.175,000
Rs.262,500
Rs.437,500
Rs.700,000
Rs.875,500
Rs. 40,000
Rs. 50,000
Rs. 60,000
Rs. 75,000
Rs.100,000
Rs.150,000
Rs.200,000
Rs.300,000
Rs.500,000
Rs.800,000
Rs.900,000
For Filer
Non-filer
0.2%
0.1%
0.4%
0.2%
Responsibility for
Deduction / Deposit
Remarks
Manufacturer,
commercial importer
Adjustable- Tax shall be deducted in respect of

following sectors: Electronic, sugar, cement,
iron and steel products, fertilizer, motorcycles,
pesticides, cigarettes, glass, textile, beverages
and paint of foam sector.
236H(1)
Advance tax on sale to retailer
0.5% of the gross amount

of sale
Manufacturer,
distributors, wholesaler
or commercial importer
Tax credit for the tax deducted under sections

236G(1) and 236H(1) shall be allowed in
computing the tax due by the distributor, dealer,
wholesaler / retailer on the taxable income for
the tax year in which the tax was collected.
236I(1)
Collection of advance tax by educational

institutions
5% of the amount of fee
The person preparing fee

voucher or challan
Adjustable tax shall not be deducted from a

person where annual fee does not exceed two
hundred thousand rupees.
236J(1)
Advance tax on dealers, commission

agents and arhatis etc.
Market committee
FINANCE ACT 2014

- 44 -
Tax shall also not be collected on the amount

which is refundable.
Adjustable


Section

Group
236K(1)
236L
236M
236N
Group or Class A:
Group or Class B:
Group or Class C:
Any other category:
Advance tax on purchase or transfer of
immovable property:
- where value of immovable property is
upto Rupees 3 million
- where value of immovable property is
more than 3 million
Advance tax on purchase of international

air tickets:
- Economy
- Other than economy
Advance tax on bonus shares issued by
companies quoted on stock exchange
Advance tax on bonus shares issued by

companies not quoted on stock exchange
Tax Rate for

Responsibility for
Deduction / Deposit
Remarks
Amount of tax
(per annum)
Rs. 10,000
Rs. 7,500
Rs. 5,000
Rs. 5,000
0%
1% for Filer and 2% for
Non-filer
Person registering or
attesting transfer
Airline issuing air ticket

0%
4%
5% of the value of bonus
shares issued determined
on the basis of day-end
price on the first day of
closure of books
5% of the value of bonus
shares on the first day of
closure of books
FINANCE ACT 2014

- 45 -
Adjustable Tax shall not be collected from

Federal Government, a Provincial Government,
a Local Government, or a foreign diplomatic
mission in Pakistan, Tax shall also not be
collected from a scheme introduced by the
Federal Government, or Provincial Government
or an Authority under a Federal or Provincial
law for expatriate Pakistanis.
Adjustable
Company issuing bonus

shares
Final
Company issuing bonus

shares
Final

SALES TAX
The Sales Tax Act, 1990
Determination of Retail Price
Section 2(27)
Manufacturers of goods subject to sales tax on retail price basis are required to pay sales tax at the highest
retail price where more than one retail price is fixed by the manufacturers for any particular brand or variety
of any article.
Now, by way of insertion of a proviso in definition of retail price, Federal Board of Revenue has been
authorized to specify zones or areas for the purposes of determining highest retail price for any brand or
variety of goods.
Ninth Schedule - Sales tax on mobile / smart phones
Section 3(3B) and Ninth Schedule
Sales tax was charged on import and supply of mobile / smart phones under SRO 460(I)/2013 dated 30 May
2013. Under this SRO, the sales tax on supplies of cellular mobile phones was required to be charged,
collected and paid by the cellular company operators on every new sale or activation of SIM card.
Now, a new Ninth Schedule to the Sales Tax Act, 1990 has been introduced with effect from 26 June 2014
which provides fixed rates of sales tax on: supply by Cellular Mobile Operator (CMO) of Subscriber
Identification Module (SIM) Cards; import of Cellular Mobile Phones or Satellite Phones, Smart Cellular
Mobile Phones or Satellite Phones by importer; and registration of International Mobile Equipment Identity
(IMEI) number by CMOs.
Sales tax on supply of natural gas to CNG stations
Section 3(8)
Section 3(8) was introduced through the Finance Act, 2013, whereby the Gas Transmission and Distribution
Company (GTDC) was required to charge sales tax on supply of natural gas to CNG stations at the rate of 9
percent in addition to general sales tax at the rate of 17 percent. This sub-section has been substituted to
require the GTDC to charge sales tax at the rate of 17 percent on its bills to CNG stations, on the value of
supply to CNG Consumers as notified by the Federal Board of Revenue from time to time.
Retailers
Section 3(9) and SRO 608(I)/2014 dated 02 July 2014
Simultaneously with the withdrawal of exemption threshold of Rupees 5 million as provided under Table-II of
the Sixth Schedule to the Sales Tax Act, 1990, a new sub-section (9) has been inserted in Section 3 in
connection with charging of sales tax on monthly electricity bills of retailers at the following rates:
5% where the monthly bill does not exceed Rupees 20,000; and
7.5% where the monthly bill exceeds Rupees 20,000.
The above tax is in addition to the tax payable on supply of electricity at the normal rate of 17%, and in the
case of unregistered retailers, further tax at the rate of 1% and extra tax at the rate of 5%.
Chapter II Special Procedure for Payment of Sales Tax by Retailers of the Sales Tax Special Procedures
Rules, 2007 has been revised in this regard.
Following new definition of national or international chain of stores has been inserted in the Sales Tax
Special Procedures Rules, 2007:
(xviiia) national or international chain of stores includes a chain of more than one retail outlets having the
same brand name or trade name or trade mark or logo, engaged in the retail sale of goods and operating
under a single or joint ownership or as a franchise or any other arrangement;
FINANCE ACT 2014

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SALES TAX
The provisions of the revised Chapter II shall apply to all persons who make supplies from retail outlets to
end consumers, including wholesalers-cum-retailers, whether registered or not, who shall be deemed to be
retailers in respect of such supplies for the purposes of this Chapter and also to persons making supplies of
electric power to retailers. However, provisions of this Chapter shall not be applicable to vehicle dealers
paying sales tax in the manner prescribed in Chapter VIII Special Procedure for Collection and Payment of
Sales Tax by Vehicle Dealers and registered retailers exclusively making supplies of goods specified in
Chapter XIII Special Procedure for Payment of Extra Sales Tax on Specified Goods, on which extra tax has
already been paid in the manner prescribed therein.
Retailers, irrespective of value of supplies in any period, falling in any of the following categories shall be
required to be registered as a retailer under the Sales Tax Act, 1990:
(a)
(b)
(c)
(d)
(e)
a retailer operating as a unit of a national or international chain of stores;

a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;
a retailer who has a credit or debit card machine;
a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive
months exceeds rupees six hundred thousand: and
a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis
to the retailers as well as on retail basis to the general body of the consumers:
The provisions of this Chapter shall remain applicable to retailers who do not obtain registration. Further, the
retailers operating as a unit of a franchise or any other arrangement of a national or multinational chain of
stores, shall obtain a separate registration as distinct from their principal.
Retailers specified above shall pay sales tax at the rate specified in sub-section (1) of section 3 of the Sales
Tax Act, 1990 and shall observe all the applicable provisions of the Sales Tax Act, 1990 and rules made
thereunder, including the requirement to file monthly sales tax returns in the manner prescribed in Chapter II
of the Sales Tax Rules, 2006. However, the retailers making supplies of finished goods of the five sectors
specified in Notification No. S.R.O. 1125(I)/2011, dated the 31st December, 2011 shall pay sales tax in
respect of such supplies at the rates prescribed in the said Notification.
These retailers shall be required to install and operate Fiscal Electronic Cash Registers (FECRs), and to issue
invoices only therefrom to their customers. Further, these retailers shall provide seamless and real-time access
of their FECRs data to the Federal Board of Revenue and also allow on-site physical inspection as and when
authorized by the Commissioner Inland Revenue having jurisdiction.
These retailers shall issue serially numbered invoices or, as the case may be, cash memos in respect of each
supply made by him, manually or through electronic cash register, and from such date as may be specified
by the Federal Board of Revenue, the invoices shall be issued through Fiscal Electronic Cash Register.
These retailers shall deposit the sales tax due along with his return on monthly basis in the manner prescribed
in Chapter II of the Sales Tax Rules, 2006. Further, these retailers shall be subject to audit as per normal
procedure.
Retailers not falling in the categories specified above, shall be charged sales tax through their electricity bills
by the persons making supplies of electric power, at the rates specified in sub-section (9) of section 3 of the
Sales Tax Act, 1990, in the manner as specified hereunder, which shall be in addition to the tax payable on
supply of electricity at the normal rate of 17%, and in the case of unregistered retailers, further tax at the rate
of 1% and extra tax at the rate of 5%.
The tax paid through electricity bill by such retailer, shall be construed as the discharge of final tax liability
for the purpose of sales tax and he shall not be entitled for any input tax adjustment or refund therefrom.
FINANCE ACT 2014

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SALES TAX
Such retailer shall not be required to file monthly sales tax return. Further, such retailers shall not be subject
to audit provided they are properly paying the sales tax as specified in sub-section (9) of section 3 of the Sales
Tax Act, 1990 through their electricity bills.
Collection of excess tax
Section 3B(2)
Section 3B(2) has been substituted to clarify that sales tax collected as excess tax shall be deemed to be an
arrear of tax or charge payable to the Federal Government and any claim for refund in respect of such excess
tax shall neither be admissible to the registered person nor payable to any court of law or to any person
under direction of the court. This provision has overriding effect without prejudice to any other law or
judgment of the court including Supreme Court and High Court.
Further tax excluded from output tax
Section 7(1)
Now, the registered person will not be entitled to deduct input tax from the further tax as charged and
collected from unregistered persons during the tax period. This means that any collection of further tax in a
tax period, will be payable with the return even if excess input tax arises in any tax period.
Input tax adjustment
Section 8(1)(f), (g),(h) and (i)
By way of insertion of following new clauses in Section 8(1), input tax relating to following goods and
services shall be inadmissible under the Sales Tax Act, 1990:
(f)
(g)
(h)
(i)
goods and services not related to the taxable supplies made by the registered person;
goods and services acquired for personal or non-business consumption;
goods used in, or permanently attached to, immoveable property, such as building and construction
materials, paint, electrical and sanitary fittings, pipes, wires and cables, but excluding such goods
acquired for sale or re-sale or for direct use in the production or manufacture of taxable goods and
vehicles falling in Chapter 87 of the First Schedule to the Customs Act, 1969 (IV of 1969), parts of
such vehicles, electrical and gas appliances, furniture, furnishings, office equipment (excluding
electronic cash registers), but excluding such goods acquired for sale or re-sale.
Federal Board of Revenue and its officers empowered to monitor without obtaining warrants
Section 40B
By way of insertion of an explanation in this Section, it has been explained that Federal Board of Revenue
and its officers have been empowered to monitor production, sale of taxable goods and stock position
without obtaining warrants from Magistrate under section 40 of the Sales Tax Act, 1990.
Electronic scrutiny and intimation
Section 50B
As per the newly inserted Section 50B, the Federal Board of Revenue may implement a computerized system
for the purpose of automated scrutiny, analysis and cross-matching of returns and other available data
relating to registered persons and to electronically send intimations to such registered persons about any
issue detected by the system.
The intimation sent by the computerized system as stated above shall be in the nature of an advice or
advance notice, aimed at allowing the registered person to clarify the issue, rectify any mistake or take other
corrective action before any legal or penal action is initiated.
The computerized system shall be so implemented so as to keep record of the issues detected, intimations
sent, responses received and actions taken, and to present such information to the officer of Inland Revenue
and to the Federal Board of Revenue in the prescribed manner.
FINANCE ACT 2014

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SALES TAX
The Federal Board of Revenue may prescribe procedures and specifications for the smooth and efficient
operation of the computerized system.
FIFTH SCHEDULE (with effect from 26 June 2014)
In view of policy for elimination of SRO culture, goods earlier zero rated under SRO 549(I)/2008 dated 11
June 2008 and SRO 670(I)/2013 dated 18 July 2013 have now been zero rated under the Fifth Schedule to
the Sales Tax Act, 1990 and the aforesaid notifications have been rescinded with effect from 26 June 2014.
SIXTH SCHEDULE (with effect from 26 June 2014)
Table 1 (Import or supply of goods)
Supply of goods or import of goods specified in Sixth Schedule to the Sales Tax Act, 1990 is exempt from
sales tax. Some of the exemptions were also available through various SROs including SRO 501(I)/2013
dated 12 June 2013, SRO 551(I)/2008 dated 11 June 2008 and SRO 575(I)/2006 dated 05 June 2006. The
main purpose of amendment in Sixth Schedule is to include the exempt goods mentioned in the aforesaid
SROs within the body of the Sixth Schedule. The aforesaid SROs have been rescinded with effect from 26
June 2014.
Following new entries have been inserted in the Table 1 of Sixth Schedule:
Heading Nos. of the First Schedule
to the Customs Act, 1969
Serial No. of
Sixth Schedule
Description
24
59
109
Crude palm oil

Cochlear implants system
Goods imported temporarily with a view to
subsequent exportation, as concurred by the Board,
including passenger service item, provision and
stores of Pakistani Airlines.
High Efficiency Irrigation Equipment
113
114
115
116
Green House Farming and Other Green House

Equipment
Plant, machinery and equipment imported for setting
up fruit processing and preservation units in GilgitBaltistan, Balochistan Province and Malakand
Division upto the 30th June, 2019 subject to the
same conditions and procedure as are applicable for
import of such plant, machinery and equipment
under the Customs Act, 1969 (IV of 1969).
Plant, machinery and equipment imported for setting
up industries in FATA upto the 30th June, 2019
subject to the same conditions and procedure as are
applicable for import of such plant, machinery and
equipment under the Customs Act, 1969 (IV of
1969).
FINANCE ACT 2014

- 49 -
1511.1000
99.37
Respective headings
8413.7010, 8424.8100,
8424.2010, 8481.1000,
8481.3000, 9026.2000,
9032.8990
8430.3100, 8430.3900,
9406.0010
Respective headings
Respective headings

SALES TAX
Table 2 (Local supplies of goods only)
Previously, retailers whose annual turnover from supplies, whether taxable or otherwise, made in any tax
period during last twelve months ending any tax period does not exceed Rupees 5 million along with cottage
industry were exempt from sales tax. Now, the exemption has been restricted to cottage industry only.
Hence, exemption available to retailers under Serial No. 3 of Table 2 has been withdrawn.
As a result of amendment in Sixth Schedule, certain goods whose local supplies were exempt from sales tax
under SRO 551(I)/2008 dated 11 June 2008 have now been included within the body of Table 2 of Sixth
Schedule to the Sales Tax Act, 1990. The aforesaid SRO has been rescinded with effect from 26 June 2014.
Table 3 (Import of goods only)
New Table 3 has been inserted in the Sixth Schedule to the Sales Tax Act, 1990. Imports of certain goods
were exempt from sales tax through SRO 575(I)/2006 dated 05 June 2006. As a result of introduction of Table
3 in Sixth Schedule, certain goods whose imports were exempt from sales tax, as mentioned in the
aforesaid SRO, have now been included within the body of Table 3 of Sixth Schedule. The aforesaid SRO
has been rescinded with effect from 26 June 2014.
EIGHTH SCHEDULE (with effect from 26 June 2014)
Under Section 3(2)(aa) of the Sales Tax Act, 1990
Table - 1
Eighth Schedule has been introduced in the Sales Tax Act, 1990. Imports of certain goods were exempt from
levy of sales tax under SRO 501(I)/2013 dated 12 June 2013, SRO 551(I)/2008 dated 11 June 2008 and SRO
727(I)/2011 dated 01 August 2011. By way of introduction of Table 1 to the Eighth Schedule, items listed
therein will be liable to sales tax at the rate of 5% subject to certain specified conditions. The aforesaid SROs
have been rescinded with effect from 26 June 2014.
S.
No.
Description
Heading Nos. of the First

Schedule to the Customs
Act ,1969 (IV of 1969)
Rate of Sales
Tax
1
2
Soyabean meal
Oil cake and other solid residues, whether or not ground
in the form of pellets
Directly reduced iron
Oilseeds meant for sowing
Raw cotton and ginned cotton
Plant and machinery not manufactured locally and
having no compatible local substitutes
2304.0000
2306.1000
5%
5%
72.03
Respective headings
Respective headings
Respective headings
5%
5%
5%
5%
3
4
5
6
EIGHTH SCHEDULE (with effect from 26 June 2014)

Under Section 3(2)(aa) of the Sales Tax Act, 1990
Table - 2
Plant, machinery, equipment and apparatus, including capital goods, mentioned in SRO 575(I)/2006 dated
05 June 2006 were exempt from levy of sales tax. After the introduction of Table 2 to the Eighth Schedule
FINANCE ACT 2014

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SALES TAX
in the Sales Tax Act, 1990, items listed therein will be subject to reduced rate of sales tax of 5% subject to
certain conditions. The aforesaid SRO has been rescinded with effect from 26 June 2014.
Sr. No.
Description
PCT Heading
1.
Machinery and equipment for development of grain handling and storage

facilities.
Cool chain machinery and equipment
Respective
Headings
Respective
Headings
2.
3.
4.
5.
6.
7.
Following items imported by Call Centers, Business Processing Outsourcing

facilities duly approved by the Pakistan Telecommunication Authority.
(1) Telephone sets/headsets.
(2) Cat 5/Cat 6/Power Cables.
(3) PABX Switch
(4) Plasma TV
(5) Dedicated telephone exchange system for call centers.
(6) Other (digital call recorder)
1. Machinery, equipment, materials, capital goods, specialized vehicles (4x4
non luxury) i.e. single or double cabin pickups, accessories, spares,
chemicals and consumables meant for exploration phase.
2. Construction machinery, equipment and specialized vehicles, excluding
passenger vehicles, imported on temporary basis as required for the
exploration phase.
Complete plants for relocated industries.
Machinery, equipment and other capital goods meant for initial installation,
balancing, modernization, replacement or expansion of oil refining (mineral
oil, hydro-cracking and other value added petroleum products),
petrochemical and petrochemical downstream products including fibers and
heavy chemical industry, cryogenic facility for ethylene storage and
handling.
Proprietary Formwork System for building/structures of a height of 100 ft. and
above and its various items/components consisting of the following namely:(1) Plastic tube.
(2) Plastic tie slot filters/plugs, plastic cone.
(3) Standard steel ply panels, Special sized steel ply panels, wedges, tube
clamps (B-Type & G Type), push/pull props, brackets (structure), steel soldiers
(structure), drop head, standard, prop tic, buard rail post (structure), coupler
brace, cantilever frame, decking beam/Infill beam and doorway angles.
(4) Lifting Unit (Structure)
(5) Bolts, tie bolts, anchor bolt assembly (fastener), anchor screw (fastener).
(6)Nuts.
(7) Steel pins, tie wing nut (fastener).
(8) Steel washers, water plate (fastener).
(9) Adjustable base jack (thread rod with nut and steel plate), adjustable fork
head (threaded rod with nut and steel channel).
FINANCE ACT 2014

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8517.1100
8544.4990
8517.6290
8528.7212
8517.6290
8519.8900
Respective
Headings
Respective
Headings
Respective
Headings
7308.4000
3917.2390
3926.9099
7308.4000
7308.9090
7318.1590
7318.1690
7318.1900
7318.2290
8425.4900

SALES TAX
NINTH SCHEDULE (with effect from 26 June 2014)

Under Section 3(3B) of the Sales Tax Act, 1990
Sales tax was charged on import and supply of mobile / smart phones under SRO 460(I)/2013 dated 30 May
2013. Under this SRO, the sales tax on supplies of cellular mobile phones was required to be charged,
collected and paid by the cellular company operators on every new sale or activation of SIM card.
Now, a new Ninth Schedule to the Sales Tax Act, 1990 has been introduced which provides fixed rates of
sales tax on: supply by Cellular Mobile Operator (CMO) of Subscriber Identification Module (SIM) Cards;
import of Cellular Mobile Phones or Satellite Phones, Smart Cellular Mobile Phones or Satellite Phones by
importer; and registration of International Mobile Equipment Identity (IMEI) number by CMOs. Ninth
Schedule also provides the liability, procedures and conditions in this regard. Table of Ninth Schedule is
given below:
S.
No.
1.
2.
Description / Specification of Goods
Sales tax on
import (payable
by importer at the
time of import)
Sales tax
(chargeable at
the time of
registration of
IMEI number by
CMOs)
Sales tax on supply

(payable at time of
supply by CMOs)
Subscriber Identification Module (SIM)

Cards
A. Low Priced Cellular Mobile Phones or
Satellite Phones
(i) All cameras: 2.0 mega-pixels or less
(ii) Screen size: 2.6 inches or less
(iii) Key pad
B. Medium Priced Cellular Mobile
Phones or Satellite Phones
(i) One or two cameras: between 2.1 to
10 mega-pixels
(ii) Screen size: between 2.6 inches and
5.0 inches
(iii) Micro-processor: less than 2 GHZ
C. Smart Cellular Mobile Phones or
Satellite Phones
(i) one or two cameras: 10 mega-pixels
and above
(ii) Touch Screen: size 5.0 inches and
above
(iii) 4GB or higher Basic Memory
(iv) Operating system of the type IOS,
Android V2.3, Android Gingerbread or
higher, Windows 8 or Blackberry RIM
(v) Micro-processor: 2GHZ or higher,
dual core or quad core
Rupees 250
Rupees 150
Rupees 150
Rupees 250
Rupees 250
Rupees 500
Rupees 500
FINANCE ACT 2014

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SALES TAX
SRO 420(I)/2014 dated 04 June 2014 and SRO 575(I)/2014 dated 26 June 2014
SRO 1125(I)/2011 dated 31 December 2011 relates to persons doing business in five export oriented sectors
i.e. textile (including jute), carpets, leather, sports and surgical goods sectors. Previously, import of finished
goods ready for use by the general public was chargeable to sales tax at the rate of five percent and value
addition tax at the rate of two percent. Now, import of such goods is chargeable to sales tax at the rate of
seventeen per cent and value addition tax at the rate of two per cent. Subsequent supply of such goods shall
be charged to tax at the rate of seventeen per cent subject to adjustment of input tax in accordance with the
relevant provisions of the Sales Tax Act, 1990 and rules made thereunder.
SRO 572(I)/2014 dated 26 June 2014
Sales tax shall now be charged on the import or supply of agricultural tractors falling under PCT Heading
8701.9020 at the rate of ten per cent instead of sixteen per cent.
SRO 571(I)/2014 dated 26 June 2014
Sales tax shall now be levied at the rate of sixteen per cent (previously fourteen per cent) of the value on
import of sunflower seed and canola seed by solvent extraction
Federal Excise Duty and Sales Tax on Production Capacity (Aerated Waters) Rules, 2013 have been repealed
with effect from 01 July 2014. As a result, aerated beverages will again be subject to duty and sales tax on
retail price basis. Hence, ongoing litigation on capacity tax will now end.
CHAPTER XI - SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY STEEL-MELTERS, RE-ROLLERS
AND SHIP BREAKERS
The provisions of this Chapter shall also apply to furnaces or steel mills operated by sugar mills or other
persons using self-generated electricity from bagasse or other means.
Rate of sales tax has been enhanced for steel-melters and steel re-rollers, excluding units operated by sugar
mills or other persons using self-generated electricity, to Rupees 7 per unit of electricity consumed from
Rupees 4 per unit of electricity consumed.
Now, adjustable sales tax @ Rupees 5,600 per metric ton shall be collected on import of remeltable iron and
steel scrap, which amount may be adjusted against sales tax charged through electricity bill, in the manner as
may be prescribed by the Federal Board of Revenue through general order. Previously, this rate was 5% on
the value of imported goods or Rupees 1,600 per metric ton whichever is higher.
The Commissioner of Inland Revenue has been authorized to collect sales tax directly from steel-melters and
re-rollers at the prescribed rates against issuance of adjustment certificates to the electricity distribution
company, if he considers expedient in the interest of revenue.
Sugar mills or any other persons operating steel melting or steel re-rolling mills using self-generated electricity
produced from bagasse or other means, shall pay sales tax on the steel products manufactured by them at the
rate specified in sub-section (1) of section 3 of the Sales Tax Act, 1990 and shall observe all applicable
provisions of the Sales Tax Act, 1990.
FINANCE ACT 2014

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SALES TAX
ITEMS PREVIOUSLY EXEMPT FROM SALES TAX UNDER VARIOUS SROs (NOW RESCINDED), HENCE
NOW APPLICABLE SALES TAX RATE ON SUCH ITEMS WILL BE 17%
Following items were previously exempt from sales tax under SRO 551(I)/2008 dated 11 June 2008. As SRO
551(I)/2008 has been rescinded with effect from 26 June 2014, hence, now applicable sales tax rate on such
items will be 17%:
Sr. No.
of SRO
Description of goods
PCT Heading
19
20
21
22
Cinematographic film exposed and developed

Platinum
Palladium
Diamonds
23
Precious stones
24
Synthetic or reconstructed stones, precious or semi-precious
31
Remeltable Scrap
3706.1000 and 3706.9000

7110.1100 and 7110.1900
7110.2100 and 7110.2900
7102.2100, 7102.2900 and
7102.3900
7103.1000, 7103.9100 and
7103.9900
7104.1000, 7104.2000 and
7104.9000
72.04
Imports and supplies of following good were previously exempt from sales tax under SRO 501(I)/2013 dated
12 June 2013. As SRO 501(I)/2013 has been rescinded with effect from 26 June 2014, hence, now applicable
sales tax rate on such items will be 17%:
Sr. No.
of SRO
PCT Heading
25
Purpose built taxis, whether in CBU or CKD condition which are

built on girder chassis an having following features, namely:(a) Attack resistance central division along with payment tray;
(b) Wheelchair compartment with folding ramp; and
(c) Taximeter and two-way radio system.
8703.3226 and 8703.3227
Following items were previously exempt from sales tax under SRO 575(I)/2006 dated 05 June 2006. As SRO
575(I)/2006 has been rescinded with effect from 26 June 2014, hence, now applicable sales tax rate on such
items will be 17%:
Sr. No.
of SRO
8
16
17
24
25
32
33
37
38
PCT Heading
Machinery, equipment and other items required for setting up, upgradation and expansion of hotels, tourism; sporting and other recreation
services related projects as approved by the Ministry of Tourism.
Machinery, equipment and other capital goods for certain service sectors.
Machinery, equipment and capital goods imported for establishing
wholesale/retail chain stores
Air Handling Units
Certain tubes, valves, fans etc. imported by the manufacturing sector
Heat ventilation air conditioner
Certain machinery and equipment relating to broadcasting
Certain machinery and equipment imported by surgical industry
Certain machinery and equipment imported by cutlery industry
Respective Headings
FINANCE ACT 2014

- 54 -
Respective Headings
Respective Headings
8415.8300
Various
8415.8200
Various
8460.0000
Various

FEDERAL EXCISE DUTY
The Federal Excise Act, 2005

Determination of value for the purpose of duty
Section 12(4)
Manufacturers of goods subject to duty on retail price basis are required to pay duty at the highest retail price
where more than one retail price is fixed by the manufacturer for any particular brand or variety of such
goods.
By way of insertion of a provisio in this sub-section, the Federal Board of Revenue may through a general
order specify zones or areas only for the purposes of determination of highest retail price for any brand or
variety of goods.
FIRST SCHEDULE
Table I (Excisable Goods)
Locally produced cigarettes
Rate of duty has been enhanced in respect of locally produced cigarettes:
Sr.
No.
Heading / subheading No.
Revised Rate of duty
Locally produced cigarettes if their on-pack

printed retail price exceeds rupees two thousand
seven hundred and six per thousand cigarettes
24.02
Rupees two thousand six

hundred and thirty two per
thousand cigarettes.
10
Locally produced cigarettes if their on-pack

printed retail price does not exceed rupees two
thousand seven hundred and six per thousand
cigarettes
24.02
Rupees one thousand and

eighty five per thousand
cigarettes
Cement
The duty of Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic
cements, whether or not coloured or in the form of clinkers (PCT Heading 25.23) shall be five per cent of the
retail price. Previously, the duty was four hundred rupees per metric ton.
Locally manufactured motor vehicles
By way of insertion of words Imported motor in place of the word Motor in description of goods against Sr.
No. 55, duty on locally manufactured motor vehicles of cylinder capacity of 1800 cc or above have been
withdrawn. However, description of goods also contains the words other motor vehicles, which may result
in confusion in future.
FINANCE ACT 2014

- 55 -

FEDERAL EXCISE DUTY
FIRST SCHEDULE
Table II (Excisable Services)
Facilities for Travel
Revised rates of duty are as follows:
Sr.
No.
3
Heading /
Sub-heading
No.
Description of Services
Facilities for travel

(a) Services provided or rendered in respect of
travel by air of passengers within the territorial
jurisdiction of Pakistan,(i) Long routes
(ii) Short routes
(iii) Socio-economic routes
Explanation: For the purpose of this entry, Long
routes means journeys exceeding 500 kilometers,
short routes means the remaining journeys,
other than socio-economic routes, and socioeconomic routes means journeys along the
Balochistan coastal belt. Routes exempt from duty
as on 1st July, 2014 shall, however, remain
exempt.
(b) services provided or rendered in respect of
travel by air of passengers embarking on
international journey from Pakistan,(i) Economy and economy plus
(ii) Club, business and first class
Revised Rate of duty
98.03
Rupees 2,500
Rupees 1,250
Rupees 500
Rupees 5,000
Rupees 10,000
Telecommunication services
The rate of duty on telecommunication services has been reduced from 19.5% to 18.5% of the charges.
Further, telecommunication services which are subject to provincial sales tax and where such tax is being
collected by the respective Province through its own board or authority are excluded from the purview of
duty.
Chartered Flights
Rate of duty on chartered flights (PCT Heading 98.03) shall be 16% of the charges. No duty was earlier
payable on such flights.
FINANCE ACT 2014

- 56 -

OTHER LAWS
Income Support Levy Act, 2013

Income Support Levy Act, 2013 (ISL) was introduced with the objects to provide financial assistance and
other social protection and safety net measures to economically distressed persons and families. The Prime
Ministers Youth programs, small loans, microfinance, housing finance support, education fee support and
others were also part of the larger income support programme.
ISL, was leviable from tax year 2013 and onward at the rate of 0.5% of value of net moveable assets,
exceeding Rupees 1 million, held by a person (individual) on the last date of every tax year.
The levy of ISL was challenged in high courts on the grounds of discrimination, ultra vires of the constitution,
etc,. Sindh High Court granted stay against application of the Act. The Honourable Supreme Court of
Pakistan has suspended the said order of Sindh High Court. However, final decision of the apex court is still
pending.
However, the Income Support Levy Act, 2013 has now been repealed.
Pakistan Telecommunication (Re-organization) Act, 1996
Universal Service Fund (USF)
Section 33A(4)
After the deletion of clause (c) of sub-section (4) of section 33A, sale proceeds from the auction of the right to
use radio spectrum shall not be credited to the USF. This amendment shall be made and shall be deemed to
have been so made on 1st day of March, 2014.
Controller General of Accounts (Appointment, Functions and Powers) Ordinance, 2001
Functions of the Controller General
Section 5
Now the Controller General can authorize payments and withdrawals from the Consolidated Fund and
Public Accounts of the Federal and Provincial Governments against approved budgetary provisions after preaudited checks as the Auditor-General may, with the approval of the President, from time to time, prescribe.
Previously approval of the President was not required. Further, following provisio has been added to this
function of the Controller General:
Provided that in case of exigency Ministry of Finance or Finance Departments, as the case may be, may
authorize payments directly from the State Bank of Pakistan and submit such information to Controller
General to enable him to record the transactions.
Members of Parliament (Salaries and Allowances) Act, 1974
Daily allowance and conveyance allowance
Section 4(1)
Now, for each day during any period of residence on duty, a member shall be entitled to receive daily
allowance at the rate of one thousand and conveyance allowance at the rate of two thousand rupees instead
of seven hundred and fifty rupees.
FINANCE ACT 2014

- 57 -

OTHER LAWS
Gas Infrastructure Development Cess Act, 2011

Levy of cess
Section 3(1)
Now, the Federal Government may decide to levy any rate of Cess on any category of gas consumers subject
to maximum rate provided in the Second Schedule.
Now, company under the Gas Infrastructure Development Cess Act, 2011 shall also include:
Oil and Gas Development Company Limited; and

Any other company engaged in sale of gas to any category of gas consumers as notified in the official
gazette.
The company under the Gas Infrastructure Development Cess Act, 2011 shall collect and pay cess at the
rates specified in the Second Schedule and in such manner as the Federal Government may prescribe. For
the Second Schedule, the following has been substituted:
S. No.
1
2
3
4
5
6
7
8
9
10
Maximum Rate of Cess

(Rs/MMBTU)
Sector
Fertilizer Feed Stock
Compressed Natural Gas (CNG)
Industrial including Fertilizer Fuel Stock
Captive Power
WAPDA / KESC / GENCOs
Independent Power Plants (IPPs)
Commercial including Ice Factories
Cement
Liberty Power Plant
Domestic
FINANCE ACT 2014

- 58 -
300
300
150
200
100
100
-

CONTACT PARTNERS
For further explanations, please contact following partners:

LAHORE:
Principal Office
10-B, Saint Mary Park
Main Boulevard, Gulberg-III
LAHORE-54660
Phones : (042) 35718137-9
Fax
: (042) 35718136,
35714340
E-Mail : racolhr@racopk.com
Mr. Sarfraz Mahmood

FCA, FITM, FICS
Mr. Muhammad Atif Mirza
FCA
Syed Mustafa Ali
FCA
Mr. Mubashar Mehmood
FCA
Other offices at:

ISLAMABAD:
2-A, ATS Centre, 30-West

Fazal-e-Haq Road, Blue Area
ISLAMABAD
Phones : (051) 2274121-22
Fax
: (051) 2278859
E-Mail : racoisd@racopk.com
Mr. Atif Bin Arshad

FCA
FAISALABAD:
560-F, Raja Road, Gulistan Colony

FAISALABAD-38000
Phones : (041) 8861042,
8863644
Fax
: (041) 8863611
E-Mail : racofsd@racopk.com
Mr. Liaqat Ali Panwar

FCA, FITM, FICS
KARACHI:
108, Park Avenue, Block-6,

P.E.C.H.S., Shahrah-e-Faisal
KARACHI
Phones : (021) 34310826-7,
34313952
Fax
: (021) 34313951
E-Mail : racokhi@racopk.com
Mr. Inaam Ellahi Sheikh

FCA, FCA (England & Wales)
Website
www.racopk.com
FINANCE ACT 2014

- 59 -
Mr. Muddassar Mehmood

FCA
Mr. Muhammad Kamran Nasir

FCA, AITM, AICS, APA

Finance Act 2014

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RIAZ AHMAD & COMPANY

FEDERAL EXCISE DUTY

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

Inaam Ellahi Sheikh

Liaqat Ali Panwar

LAHORE: 07 July 2014

FINANCE ACT 2014

Atif Bin Arshad

RIAZ AHMAD & COMPANY

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

Rate of FED has been enhanced on locally produced cigarettes.

Income Support Levy

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001

Section 2, Clauses (23) & (35B)

Sections 2(29), 39, 236M & 236N

Sections 2(59B) & 203(1)

Section 37A, Div VII, Part I, First Schedule

Holding period of security is less than twelve months

Tax Year 2015

Tax Year 2014

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001

Sections 88A & 92

Sections 100C & 159, Clauses 58, 58A, 59 & 60,

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001

any income of a religious or charitable institution derived from voluntary contributions

Minimum tax on income of certain persons

Oil marketing companies, Oil refineries, Sui Southern Gas

Alternative corporate tax

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001

Tax credit under section 65B shall be allowed against ACT.

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001

Section 148(8A) & Clause (9AA), Part IV,

Section 149(3) & (4)

Section 150, Div I, Part III, First Schedule

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001

Where value of Immovable property is up to Rupees 3 million

Sections 236M & 236N

FINANCE ACT 2014

RIAZ AHMAD & COMPANY

INCOME TAX ORDINANCE, 2001