Deduction / Payment of Tax Chapter- 23
A person required to deduct tax from an amount paid by the person shall deduct tax -
(a) in the case of deduction of tax on profit on debt, at the time the amount is paid or credited to the
account of recipient, whichever is earlier;
(b) in other cases, at the time the amount is actually paid; and
(c) Amount actually paid shall have the meaning as may be prescribed.- Exemption or lower rate certificate (Section 159):
If the income of a person is:
(a) Exempt from tax;
(b) Chargeable to tax at lower rate, or
(c) is subject to 100% tax credit under income tax law.
Then Commissioner Inland Revenue shall issue him an exemption or lower rate certificate upon
application made in the prescribed form and made by him in writing.
A person who is required to deduct tax at source shall deduct tax according to the exemption or lower
rate certificate but if certificate is not presented to him then he shall deduct full amount of tax.
Provided that in case of a company, the Commissioner shall issue
exemption or lower rate certificate under this section within fifteen days of filing of
application by the company:Provided further that the Commissioner shall be deemed to have issued the exemption certificate
upon the expiry of 15 days from filing of application by the aforesaid company and the certificate shall
be automatically processed and issued by Iris:
Provided also that the Commissioner may modify or cancel the certificate issued automatically by
Iris on the basis of reasons to be recorded in writing after providing an opportunity of being heard.Exemption or lower rate certificate u/s 159 [Rule 40]
An application for a certificate u/s 159(1) read with clause (V) of paragraph 1 of Notification No.
SRO 947(1)/2008, dated 5.9.2008, shall be in the form specified in Part VII (a) of the First
Schedule to the Income Tax Rules, 2002.
A system based exemption certificate issued by the Commissioner Inland Revenue for goods
specified in the aforesaid notification shall be in the form specified in Part VIII (a) of the First
Schedule to Income Tax Rules, 2002.- Rules for Rates of Tax deduction (Section 159):
Any notification issued under the said sub sections and for the time being in force shall continue to
remain in force unless rescinded by the Board through notification in the official gazette.- Payment of tax collected or deducted (Section 160):
Any tax that has been collected or deducted shall be paid to the Commissioner Inland Revenue by
the person making the collection or deduction within the time and in the manner as may be
prescribed.
Payment of tax collected or deducted [Rule 43]
As required u/s 160 and under the Sixth Schedule to the Ordinance, the tax collected or deducted
under various sections of the Ordinance or Sixth Schedule to the Ordinance shall be paid to the
Commissioner Inland Revenue by way of credit to the Federal Government,-
(a) where the tax has been collected or deducted by the Federal Government or a Provincial
Government on the day the tax was collected or deducted; or
(b) where the tax has been collected or deducted by a person other than the Federal Government
or a Provincial Government,