RETURNS AND

ASSESSMENT
WITHHOLDING TAXES
 Withholding tax is an amount withheld by the party
making a payment to another (payee) and paid to the
taxation authorities.
 The amount the payer deducts may vary, depending on
the nature of the product or service being paid for.
 The payee is assessed on the gross amount, and the tax
to be withheld (the withholding tax) is computed in that
assessment.
 The purpose of withholding tax is to facilitate or
accelerate collection, by collecting tax from payers
rather than a much greater number of payees, and by
collecting tax from payers within the jurisdiction rather
than payees who may be outside the jurisdiction.
 Withholding is an act of deduction or collection of tax at source,
which has generally been in the nature of an advance tax payment.
It is an effective mechanism and important/timely source of revenue.

  Under the repealed Income Tax Act, 1922, tax was deducted from
two main sources of income; namely, salaries and interest on
securities.

 However, in the 1990s, withholding tax net was expanded

extensively by providing for withholding tax on a wider variety of
transactions and making most of them presumptive.

 Provisions of the Income Tax Ordinance, 2001, are more or less the
same, except for a few changes and additions. Important
withholding provisions relate to salary, imports, exports,
commission and brokerage, dividend, contracts, profit on debt,
utilities, vehicles tax, stock exchange-related provisions and non-
residents, etc., with varying rates.
WITHHOLDING TAXES

Section Responsible Nature of Payment Rate

148 Custom Authority Imports 2% F

149 Employer Salary Effective rate as per

slabs
150 Resident Company Dividend, any company 10% F 

151 All payers including: Profit on debt:

Banking Company National Saving Certificates
Financial Institutions Profit on account of deposit
Federal Government Profit on any security issued 10% F
152 All payers Payment to non resident on  
account of :
Royalty 15% F
Fees for Technical Services
Others 30%
WITHHOLDING TAXES

Section Responsible Nature of Payment Rate

153 Federal Government Payments to resident person  
Company for:
Association of Persons
Foreign Contractor
Consultant

- Sale of goods 3.5%

- Transport services 2% F
- Other services 6% F
- Execution of contracts 6% F
 
154 Authorized foreign exchange Export proceeds  0.75% F
dealers/ Banking Company
WITHHOLDING TAXES
Section Responsible Nature of Payment Rate

155 Federal Government Rent of immovable property Effective

Company rate as per
Association of Persons slabs
Foreign Contractor
Consultant

156 All payers Prize on prize bonds 10% F

Winning from raffle, lottery,
quiz, crossword puzzle or 20% F
Prize offered by companies
for sales promotion
156-A All payers Petroleum products to petrol 10% F
pump operator
WITHHOLDING TAXES
Section Responsible Nature of Payment Rate

231-A Banking Companies Cash withdrawal 0.3%

exceeding Rs. 25,000

233 Federal government Brokerage and

Provincial government Commission
Local authority
Company 10% F
Association of person

233-A Stock Exchanges Commission on  

registered in Pakistan shares:

● Sale and Purchase 0..01% F

● Badla Financing 10% F

WITHHOLDING TAXES
Section Responsible Nature of Payment Rate
234 Person collecting Goods transport Rs. 1,200 - 36,000 F
motor vehicle tax vehicles with different
registered laden
weights
    Passenger transport Rs. 25 - 100 per seat
vehicles with different
registered seating
capacity
    Private motor cars Rs. 750 - 8,000
235 Person preparing Commercial / Rs. 60 - 2,000
the bills industrial consumer of
electricity
236 Person preparing PTCL telephones 10%
the bills
Mobile phones & 10%
prepaid telephone
cards
ASSESSMENT

 Assessment is the act through which the taxable

income and the tax liability of a taxpayer is
determined.
 The whole process which enables the tax department
to finalize an assessment is termed as Assessment
Procedure.
 The assessment procedure involves following steps:
 Filing of Tax Return (Return of total income)
 Scrutinizing the return and supporting documents
 Issuance of Assessment Order
 Payment of tax payable, if any
FILING OF RETURN
 A Tax Return is the prescribed document which is used by the
taxpayer in order to declare its taxable income.

 Following persons are required to file the Tax Return:

 Every company
 Every non profit organization
 Every individual whose taxable income exceeds:
 Non salaried male Rs.100,000
 Non salaried female Rs.125,000
 Salaried male Rs.180,000
 Salaried male Rs.240,000
 Every person who charged to tax for any of the preceding two tax
years
 Every person who claims a loss carried forward for a tax year
 Every person who owns immovable property. area of 250 square
yards
 Every person who owns a flat within the municipal limits
DATE OF FILING RETURN
Sr. Taxpayer Last date

1 An individual 30th Sep

2 A company with tax year 30th Sep

ending between
1st Jul – 31st Dec
3 A company with tax year 31st Dec
ending between
1st Jan – 30th Jun
WEALTH STATEMENT

 Wealth Statement contains the

information regarding the total assets and
liabilities of the taxpayer as on the last day
of the tax year.

 Every resident tax payer is required to file a

wealth statement along with the filing of
return of income for any tax year if his last
declared or assessed income is Rs.500,000
or more.
ASSESSMENT
Normal Assessment
 The return is complete in all respects.
 The return shall be considered as an Assessment
Order issued to the taxpayer by the Commissioner.

Best Judgment Assessment

 Where a person fails to furnish the tax return.
 The Commissioner may, based on any available
information, make an assessment.

Provisional Assessment
 Where a person has concealed an asset.
 The Commissioner may, taking into account the
concealed asset, issue a provisional assessment order.