Withholding Tax Card 2016/2017: payment on dividend in-specie

KARACHI: Federal Board of Revenue (FBR) has updated withholding tax rate to be collected at the time of making payment of dividend in-specie during 2016/2017.
Dividend in specie under section 236S of Income Tax Ordinance, 2001
Every person making payment of dividend-in-specie shall collect tax from the gross amount of the dividend in specie paid at the rate specified below:
Division I of Part III of the First Schedule.
(a) 7.5 percent in the case of dividends declared or distributed by purchaser of a power project privatized by WAPDA or on shares of a company set up for power generation or on shares of a company, supplying coal exclusively to power generation projects;
(b) 12.5 percent for filers other than mentioned in (a) above;
(c) 20 percent for non-filers other than mentioned in (a) above:
Provided that the rate of tax required to be deducted by a collective investment scheme, REIT Scheme or a mutual fund shall be-

Person Stock Fund Money market fund, income fund or REIT scheme or any other fund
Filer Non-Filer
(1) (2) (3) (4)
Individual 10% 10% 15%
Company 10% 25% 25%
AOP 10% 10% 15%

Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, the rate of tax deduction shall be 12.5 percent:
Provided further that if a Developmental REIT Scheme with the object of development and construction of residential buildings is setup by thirtieth day of June, 2018, rate of tax on dividend received by a person from such Developmental REIT Scheme shall be reduced by fifty percent for three years from thirtieth day of June, 2018.

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