Withholding Tax – Part II

TheProReaders > All Articles  > Withholding Tax – Part II

Withholding Tax – Part II

Withholding Tax-II
Spread Learning


Withholding Tax is the tax under which tax deducted or collected at source is treated as a minimum tax for such transaction.

This tax becomes final tax when withholding tax is higher than normal tax, otherwise, adjustable in normal tax.

Withholding Tax on Supply of goods by a resident person – Section 153, Division III Part III 1st Schedule

Withholding tax on the supply of goods is applicable as follows:

Applicable Section Nature Filer Non-Filer
Other Goods u/s 153(1)(a)/5 Association of Persons (AOP) 4.50% 9.00%
Other Goods u/s 153(1)(a)/5 Individuals 4.50% 9.00%
Other Goods u/s 153(1)(a)/4 Company 4.00% 8.00%
Fast Moving Goods u/s 153(1)(a)/28 Association of Persons (AOP) 0.25% 0.50%
Fast Moving Goods u/s 153(1)(a)/28 Individuals 0.25% 0.50%
Fast Moving Goods u/s 153(1)(a)/28 Company 0.25% 0.50%

Withholding Tax on Fast Moving Consumer Goods – Section 2 (22A)

These goods are consumer goods that are supplied in retail markets.

Withholding Tax on Execution of contracts:

Withholding tax rates in the execution of contracts are as follows:

10% – for a contract with sportspersons.

6.5% – for a contract with a company, 7.5% other than a company

Threshold Rs.75,000:

Where payment to the service provider is less than Rs.75,000 aggregate during a financial year no tax shall be deducted.


Payments to the following are exempted from the provisions of section 153;

  • To the Provincial government, local authority
  • For electricity and gas.
  • To Hotels and restaurants receive payment in cash.
  • Shipping companies and air carriers for passenger tickets and cargo charges of goods.

The tax shall be deducted by the following persons:

Federal Government, Provincial Government, Local Government
Company, Non-profit organization, AOP
Individuals, AOP, and persons registered under the sales tax act have a turnover of Rs.100 million or above in any preceding years.
Foreign Contractors or consultants
Consortium or joint venture
Builder and land developers

Withholding Tax on imports – Section 148(7), (7A), Part II 1st Schedule and 12th Schedule

Tax on imports of goods ranges from 1% to 5.5%.

Please refer to Income Tax Ordinance Part I, II, and III of the 12th schedule.

Withholding Tax on Import of mobile phones:

Tax ranges from Rs.70 to Rs.11,500

Withholding Tax on Commission or Brokerage – Section 233, Division II Part IV 1st Schedule

Tax from commission or brokerage shall be deducted at the following rates as minimum tax liability:

Person Rate %
Advertising agents 10
Life insurance agents where a commission is more than Rs.500,000 8
Other cases 12

Tax on advertising agents shall be deducted from the amount of commission as A x (15/85).

Where A is an amount payable to electronic or print media for advertising services excluding commission.

FBR Website

First Part

Withholding Tax – Part I

Please also read:

Final Tax Regime Part I

Income from Property

Ali Murtaza

No Comments

Leave a Comment