ASSIGNMENT # 1

NAME: BANIYA KHAN

STUDENT IT: 60685

SUBJECT NAME: ADVANCED TAXATION P-6

 ASSIGNMENT FOR ADVANCE/WITHOLDING TAX

1, Definition of Advance Tax:

Advance tax is not a tax but is nearly a provisional payment of an amount towards due tax. Therefore, it is a supplementary tax collection system, which is finally adjust it in the
tax payable of the tax payer. (2010 PTD 1295)

2. Scope of Advance Tax under section 147 of the Income Tax Ordinance 2001:

I) FOR INDIVIDUALS:

Subject to the exceptions as discussed below every individuals who has been charged to tax liability for latest tax/assessment year is liable to pay advance tax
every quarter under the section 147 one of the income tax ordinance 2001.

II) AOP/COMPANY

Subject to the exception discussed below every AOP and company is liable to pay advance tax even if there is no tax due on last assessed income or turnover under
the section 147 (6A) of the income tax ordinance 2001.

III) EXCEPTIONS FROM PORIVISIONS OF ADVANCE TAX UNDER THE SECTION 147 OF THE INCOME TAX ORDINANCE 2001.

Persons driving income from the following sources are not required to deduct advance tax under the section 147 of the income tax ordinance 2001:

 Dividend (section 5)
 Tax on certain payments to non-residents (section 6)
 Shipping and air transport (section 7)
 Income subject to deduction of tax at source under the head salary under section 149; and
 Income under the heads of income on which tax has been collected as final tax liability and no tax credit is allowed as result of section 168(3) of the income
tax.
 Individuals who is latest excess taxable income is less than 1 million are not required to pay advance tax section 147 (2) of the income tax ordinance 2001.
 IV) CREDIT OF ADVANCE TAX(SEC43)/REFUND (SEC 170)

As per provision of section 147 (8) (9) and (10) of the income tax ordinance 2001 the person who has paid the advance tax under the section 147 of the income tax
ordinance, 2001 is allowed to claim a credit under section 43 of the income tax ordinance, 2001 at the time of computing the tax due on its taxable income and in
the case where he is not able to credit the same then it shall be funded to the taxpayers in accordance with section 170 of the income tax ordinance 2001.

3. Fill the columns for respective Activity

SECTION ACTIVITY RESPONSIBILITY for Time limit for status

deduction payment
148 Imports Collector of customs At the same time Minimum
and manner as (section 148(7))
the custom duty is
payable in respect
of the goods
imported
149 Tax on Salary Income Person responsible for At the time the Adjustable
paying salary to the salary is actually
employee paid
149(3) Fee paid to directors for meeting Person responsible for At the time of
making payment payment
150 Dividend Income Every person paying At the time the Final section 5
dividend dividend is read with
actually paid section 8
150A Return on Investment in Sukuk Special purpose vehicle, At the time of Final section
company actual payment 5AA read with
section 8
151 Profit on debt Every person making At the time the Minimum tax on
payment of profit/yield yield ( profit on the profits on
debt) is credited debt arising to a
to the account of taxpayer.
151(1)(a) . Yield or profit (profit on debt) on account, deposit or a certificate under the National saving schemes or Post Every person making At the time the Minimum tax on
office savings payment of yield/ profit yield ( profit on the profits on
debt) is credited debt arising to a
to the account of taxpayer.
151(1)(b) Profit on debt paid by Banking company or financial institution on account or deposit maintained Banking, company or At the time of Minimum tax on
financial institution profit on debt is the profits on
credited to the debt arising to a
 account of the taxpayer. except
recipient or is where
actually paid Taxpayer is a
company; or
profit on debt is
taxable
151(1)( c) Profit on securities , other than those mentioned in s. 151(1)(a), issued by federal / provincial government or a Federal / provincial Govt/ At the time time Minimum tax on
local government Local authority of profit on debt is the profits on
credited to the debt arising to a
account of the taxpayer. except
recipient or where
Taxpayer is a
company; or
profit on debt is
taxable
151(1)(d) Profit on bonds , certificates, debentures, securities or instruments of any kind (other than loan agreements Banking company, a At the time of Minimum tax on
between borrowers and banking companies or development financial institutions) financial institution, a profit on debt is the profits on
company or finance credited to the debt arising to a
society account of the taxpayer. except
recipient or is where
actually paid, Taxpayer is a
whichever is company; or
earlier profit on debt is
taxable
152 Payments to non-residents Every person paying At the time the Minimum as per
royalty or fee for royalty or fee for section 6 read
technical services to a technical services with section 8
non resident is actually paid
152(2A) Every Prescribed person making payment to a Permanent Establishment of Non- Resident. For: Every prescribed person At the time Minimum for
(a) Sale of goods
(i) In case of a company
amount is paid section 152
(ii) Other than company cases
153 Payment for goods & services Every prescribed person At the time the Minimum tax
amount is actually for all except in
paid the case where
it shall not be
minimum tax on
sale or supply of
goods.
154 Exports Every authorized dealer At the time of Final
in foreign exchange realization of the
 export proceeds
154(2) On realization of proceeds on account of commission to; Every authorized dealer At the time of Final
in foreign exchange realization
154(3) On realization of proceeds on account of sale of goods to an exporter under inland back to back LC or Every banking company at the time of Final
any other arrangement as may be prescribed by FBR
realization of
proceeds amount
154(3A) Exports of goods located in Export Processing Zone (BPZ BPZ authority At the time of Final
export of goods
154(3B) Payment to indirect exporters as defined in DTRE( Duty & Tax Remission for exporters) rules, 2001 Direct exporters At the time of Final
payment against a
firm contract
154(3C) Clearance of goods exported Collector of custom At the time of Final
exports of goods
155 Income from Property Every prescribed person At the time of rent Adjustable
as per section 55 is actually paid
156 Payments made on account of winning of prize on prize bond , Cross word, raffle, lottery & quiz Every person making At the time the Final
payment prizes or winning
are actually paid
156 A Petroleum Products Every person selling At the time Final
petroleum product commission is
actually paid
156B Withdrawal of balance under pension fund Pension fund manager At the time of Adjustable
withdrawal
231A Cash Withdrawal from a Bank Every banking company At the time cash is Adjustable
withdrawn
231AA (1) Advance tax on transaction in bank Every banking company, At the time of sale Adjustable
non-banking financial of instrument
institution
231AA(2) Transfer of any sum against cash through online transfer Every banking company, At the time of
non-banking financial transfer of any
institution sum
231B Advance Tax on Private motor vehicles Motor vehicle At the time of Adjustable
registration authority registration of
new vehicle
231B(1A) Leasing of Motor vehicle to persons not appearing in the Active Payers’ List Every leasing company At the time of Adjustable
lease
231B(2) Transfer of Registration or ownership of motor vehicle Motor vehicle At the time of Adjustable
registration authority transfer
233 Brokerage & Commission Federal government At the time of Minimum tax
 (i) Advertising Agents brokerage
(ii) Life Insurance Agents where Commission received is less than Rs. 0.5 Million per annum

(iii) Persons not covered in 1 & 2

233A Collection of tax by Stock Exchange This section has been

made inapplicable
233AA18 Collection of Tax by NCCPL Advance Tax on margin financing through in share business. NCCPL At the time of Adjustable
mark-up/interest
paid
234 Tax on Motor Vehicle In the case of: Person collecting motor At the time of Adjustable
(1) Goods transport Vehicles:[clause (1)]
vehicle tax collection of
(2) Good transport vehicles with laden weight of 8120 Kg or more after a period ten years from the date
motor vehicle tax
of first registration of vehicle in Pakistan: [clause (1A)]

(3) Passenger transport vehicles plying for hire with registered seating capacity of: [clause (2)]
(4) In the case of private ‘’Moor Vehicles’’, being a broad definition, includes car, jeep, ,van, sport utility
vehicle, pick-up trucks for private use, caravan automobile , limousine , wagon and any other automobile
used for private purpose: [Clause (3)]
234A CNG Station On the amount of gas bill of a Compressed Natural Gas Station Person preparing gas At the time of gas Minimum tax
consumption bill consumption
charges
235 Electricity Gross amount of Electricity Bill of Commercial and Industrial consume Person preparing Along with Adjustable in
electricity bill payment of case of
electricity company
consumption on
charges
235B Tax on Steel Melters and composite units The person preparing In the manner Non-adjustable
.
electricity consumption electricity
bill consumption on
charges or
charged
23621 Telephone Person preparing Along with the Adjustable
(a) Telephone subscribers and internet
telephone payment of
telephone bill
236A Sale by auction Every person making sale At the time of sale Adjustable
by auction proceeds
236B Advance tax on purchase of Air Ticket Purchase of domestic air ticket Person preparing air At the time of sale Adjustable
ticket proceeds
236C Immoveable property Registering, Recording or attesting transfer of any Immoveable property Every person registering, At the time of Minimum tax
recoding or attesting registering,
 recoding or
attesting
236D Advance Tax on Function &Gatherings Prescribed person as per At the time of Adjustable
236D(1) On payment of food, service,
236D(2) or any other facility related to function and gathering
section 236 D (4) (b) payment of bill

236F Advance Tax on Cable Operators & other Electronics PEMRA At the time of Adjustable
issuance license
236G Advance Tax on sales to distributor, dealer &wholesaler Every manufacturer or At the time of sale Adjustable
commercial importer
236H Advance Tax on sales to Retailers Every manufacturer, At the time of sale Adjustable
distributor, dealer or
wholesaler.
236H Advance Tax on sale of certain petroleum products Every person selling At the time of sale Final
petroleum products
236 I Collection of Advance Tax by Educational Institution The person preparing fee At the time of Adjustable
voucher. payment of fee
236J Advance Tax on dealers, commission agents andarthis Every market committee At the time of Adjustable
or any commodity issuance of
regulatory authority renewal of license
236K Advance Tax on purchase of immovable property Every person registering, At the time of Adjustable
recoding or attesting registering,
recoding or
attesting
236K(3 Advance Tax on payment of instalment in respect of purchase of allotment of immovable property where Any person responsible At the time of Adjustable
transfer is to be effected after making payment of all instalments:
for collection of payment payment of
in instalment instalment
236L Advance Tax on purchase of international air ticket Airlines issuing the air At the time of sale Adjustable
ticket proceeds
33236P34 Advance tax on banking transaction other than through cash Every banking company At the time of sale Adjustable
instruments
236Q35 Payment to resident for use of machinery &equipment Every prescribed person At the time of Final
as per (7) of 153 payment
236R36 Education related expenses remitted abroad Banks, foreign exchange At the time of adjustable
remitting the
expenses
236S Dividend in Specie Every person paying At the time of Final
dividend in specie making payment
236U Advance Tax on Insurance Premium Insurance company and At the time of adjustable
agents collection of
 insurance
premium
236V Advance Tax on extraction of Minerals Provincial authority At the time of Adjustable
collected royalty per collecting royalty
metric ton per metric ton
from leased
236X Advance tax on Tobacco Pakistan tobacco board At the time of cess adjustable
on tobacco
236Y Advance tax on persons remitting amounts abroad Every banking company At the time of Adjustable
transfer of any
sum