Withholding Tax Card 2016/2017: brokerage and commission

KARACHI: The Federal Board of Revenue (FBR) has updated withholding tax rates on payment of brokerage and commission applied on filers and non-filers applicable during fiscal year 2016/2017.
Section 233 of Income Tax Ordinance, 2001

(1) Where any payment on account of brokerage or commission is made by the Federal Government, a Provincial Government, a Local Government, a company or an association of persons constituted by, or under any law (hereinafter called the “principal”) to a person (hereinafter called the “agent”), the principal shall deduct advance tax at the following rates from such payment.

S.No. Person Rate applicable on the amount of payment.
Filer Non-filer
(1) (2) (3) (4)
1. Advertising Agents 10% 15%
2. Life Insurance Agents where commission received is less than Rs.0.5 million per annum 8% 16%
3. Persons not covered in 1 and 2 above 12% 15%”

(2) If the agent retains Commission or brokerage from any amount remitted by him to the principal, he shall be deemed to have been paid the commission or brokerage by the principal and the principal shall collect advance tax from the agent.
(3) Where any tax is required to be collected from a person under sub-section (1), such tax shall be the final tax on the income of such persons.

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