Section 236O: Advance tax under this chapter

1[236O. Advance tax under this chapter.—The advance tax under this chapter shall not be collected 2[“or deducted from”] — (a) the Federal Government or a Provincial Government; (b) a foreign diplomat or a diplomatic mission in Pakistan; or (c) a person who produces a certificate from the Commissioner that his income during the tax year is exempt.”] 3[ ] 4[ ] 5[ ] 6[ ] (3) 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).]” 1[ ] 2[ ] 3[ ] 4[ 5[ ] ] for use or right to use industrial, commercial and scientific equipment shall deduct tax from the gross amount at the rate specified in Division XXIII of Part IV of the First Schedule. (2) Every prescribed person making a payment in full or in part including a payment by way of advance to a resident person on account of rent of machinery shall deduct tax from the gross amount at the rate specified in Division XXIII of Part IV of the First Schedule. (3) The tax deductible under sub-sections (1) and (2) shall be 6[minimum] tax on the income of such resident person. [Explanation.— For the removal of doubt, it is explained that the income of person referred to in sub-section (3) means the amount on which tax is deductible under sub-section (1) or (2) of this section.] (4) In this section ―prescribed person‖ means a prescribed person as defined in sub-section (7) of section 153. (5) The provisions of sub-section (1) and (2) shall not apply to— (a) agricultural machinery; and (b) machinery leased by a leasing company, an investment bank or a modaraba or a scheduled bank or a development finance institution in respect of assets owned by the leasing company or an investment bank or a modaraba or a scheduled bank or a development finance institution.” 1 30th Section “236R” omitted through Finance Act, 2020 dated June, 2020 the omitted section read as follows: “236R. Collection of advance tax on education related expenses remitted abroad.―(1) There shall be collected advance tax at the rate specified in Division XXIIV of Part-IV of the First Schedule on the amount of education related expenses remitted abroad. (2) Banks, financial institutions, foreign exchange companies or any other person responsible for remitting foreign currency abroad shall collect advance tax from the payer of education related expenses. (3) Tax collected under this section shall be adjustable against the income of the person remitting payment of education related expenses. (4) For the purpose of this section, “education related expenses” includes tuition fee, boarding and lodging expenses, any payment for distant learning to any institution or university in a foreign country and any other expense related or attributable to foreign education.” 1[ ] 2[ ] 3[ ] 4[ ] 5[ ] 6[ ] 7[ ] 1 30th Section 236U omitted through Finance Act, 2020 dated June, 2020 the omitted section read as follows: “236U. Advance tax on insurance premium.- (1) Every insurance company shall collect advance tax at the time of collection of insurance premium from 1[person whose name is not appearing in the active taxpayers’ list] in respect of general insurance premium and life insurance premium, at the rates specified in Division XXV of Part IV of the First Schedule. (2) Insurance premium collected through agents of the insurance company shall be treated to have been collected by the insurance company. (3) Advance tax collected under this section shall be adjustable.” 1[236Y. Advance tax on persons remitting amounts abroad through credit or debit or prepaid cards.— (1) Every banking company shall collect advance tax, at the time of transfer of any sum remitted outside Pakistan, on behalf of any person who has completed a credit card or debit card or prepaid card transaction with a person outside Pakistan at the rate specified in Division XXVII of Part IV of the First Schedule. (2) The advance tax collected under this section shall be adjustable.]

Effective date: 2001-09-13

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