Tax Book 2023

Final Tax Regime and Minimum Tax Chapter- 22

Where A = amount paid or to be paid to electronic or print media for advertising services (excluding

commission) on which tax is deductible under clause (b) of sub-section (I) of section 153.

Tax deducted under sub-section (2A) shall be Minimum Tax on the income of the advertising agent.

Explanation.— For the removal of doubt, it is explained that the income of person referred to in sub-

sections (2B) and (3) means the amount on which tax is deductible under sub-sections (1) or (2A) of

this section.

Opting out from Final Tax Regime [Clause (56G) of Part IV of the Second Schedule]

The said option available under the aforesaid clause are no more available from Tax Year 2020

although the said clause has been omitted from tax year 2021.

Example: Mr. Ahsan earned commission on local business of Rs. 500,000 (gross) during the tax year

and incurred expenses of Rs. 100,000 in deriving this income. Compute his tax liability if tax was

deductible on commission income @ 1 2 % but was not deducted.

Solution:

As the commission on local business if tax is deductible is covered under Minimum Tax Regime

hence tax liability has been computed as under;

(MTR)

Tax liability: Tax required to be deducted on commission (500,000 x 1 2 %) 6 0,000

12. CNG stations (Section 234A): Before omission by Finance Act, 2021

The person preparing the gas consumption bill shall charge tax @ 4% (6% for non filer) of the amount

of gas consumption charges and such tax shall constitute Minimum tax.

Explanation.— For removal of doubt, it is clarified that for the purposes of this section tax on income

arising from consumption of gas means the tax collected which is inclusive of sales tax and all

incidental charges.

Example: Ali is operating a CNG station. Tax collected on gas consumption charges is Rs. 4,000.

What will be his tax liability?

Solution: The tax deducted on gas consumption charges is treated as Minimum Tax liability of the

taxpayer.

13. Electricity consumption (Section 235):

In addition to tax collectible under sub-section (1), there shall be collected tax at the rates given in the

Division IV of Part IV of First Schedule from retailers and service providers as provided under section

99A of the Ordinance:

Provided that the tax shall not be collectible under this sub-section if the tax has been collected from

the person under sub-section (9) of section of the Sales Tax Act, 1990 as provided in the general

order issued under section 99A of the Ordinance.

Gross amount of monthly bill Tax

Where the amount does not exceed Rs. 30,000 (^) Rs. 3,000
Where the amount exceeds Rs. 30,000 but does not exceed Rs. 50,000 (^) Rs. 5,000
Where the amount exceeds Rs. 50,000 but does not exceed Rs.100,000 (^) Rs. 10,000
retailers and service providers as notified by the Board through Income Tax General
Order
upto Rs.200,000”;
14. Bonus shares issued by companies quoted on stock exchange [U/S 236M]
 Deleted by Finance Act, 2018.
15. Bonus shares issued by companies not quoted on stock exchange [U/S 236N]
 Deleted by Finance Act, 2018.