Withholding tax paid by stock members on sale, purchase of shares made final liability


KARACHI: Federal Board of Revenue (FBR) has made withholding tax as final tax liability paid by members of stock exchange on commission earned on purchase or sale of shares.
According to Withholding Tax Card 2017/2018 issued by the FBR, the Pakistan Stock Exchange will collect withholding tax at 0.1 percent of sale or purchase value of shares from members of stock exchange at the time of making or receiving payment.
The stock exchange will collect the tax from its members under Section 233A of Income Tax Ordinance, 2001. The withholding tax from the stock members will be final tax liability.
Under Section 233AA of Income Tax Ordinance, 2001 the National Clearing Company of Pakistan Limited (NCCPL) will collect 10 percent mark-up or interest as withholding tax from members of stock exchange.
According to withholding tax card the NCCPL will collect advance tax on margin financing through a share business from members of stock exchange at the time of mark-up or interest is paid. This tax is adjustable against total tax liability.

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