TIPU ASSOCIATES Consultants Advisors Tax Corporate Finance Address

TIPU ASSOCIATES Consultants & Advisors (Tax, Corporate & Finance) Address: 97/8 -B Babar Block, New Garden Town, Lahore. UAN No. 042 -111 -9210 -10 Website: www. tipuassociates. com 1

INCOME TAX ORDINANCE, 2001 INCOME TAX RATES FOR TAX YEAR 2017 (July 01, 2016 to June 30, 2017) 2

TAX ON UNDISTRIBUTED RESERVES (UNDER SECTION 5 A) Holding Period Tax Rate Profit on debt does not exceed Rs. 25 million 10% Exceeds Rs. 25 million but does not exceed Rs. 50 million Rs 2, 500, 000/- plus 12. 5% of amount exceeding Rs. 25 million Exceeds Rs. 50 million Rs. 5, 625, 000/- plus 15% of the amount exceeding Rs. 50 million 3

TAX ON BUILDERS (Under Section 7 C) Area (Sq. Ft. ) (A) Karachi, Lahore and Islamabad (B) Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad, Quetta (C) Urban Areas not specified in (A) and (B) For commercial buildings - Rs. 210/- per Sq. Ft. For residential buildings Up to 750 Rs. 20/- per Sq. Ft. Rs. 15/- per Sq. Ft. Rs. 10/- per Sq. Ft. 751 to 1500 Rs. 40/- per Sq. Ft. Rs. 35/- per Sq. Ft. Rs. 25/- per Sq. Ft. 1501 & more Rs. 70/- per Sq. Ft. Rs. 55/- per Sq. Ft. Rs. 35/- per Sq. Ft. 4

TAX ON DEVELOPERS (Under Section 7 D) Area (Sq. Yd. ) (A) Karachi, Lahore and Islamabad (B) Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad, Quetta (C) Urban Areas not specified in (A) and (B) For commercial buildings - Rs. 210/- per Sq. Yd. For residential buildings Up to 750 Rs. 20/- per Sq. Yd. Rs. 15/- per Sq. Yd. Rs. 10/- per Sq. Yd. 751 to 1500 Rs. 40/- per Sq. Yd. Rs. 35/- per Sq. Yd. Rs. 25/- per Sq. Yd. 1501 & more Rs. 70/- per Sq. Yd/ Rs. 55/- per Sq. Yd. Rs. 35/- per Sq. Yd. 5

CAPITAL GAIN (UNDER SECTION 37) Capital Gain on disposal of Securities (Under Section 37(A) – DIVISION VII Holding Period Tax Rate (Filer) Tax Rate (Non-filer) 15% 18% More than twelve months but less than twenty-four months 12. 5% 16% More than twenty-four months but less than four years 7. 5% 11% Where the security was acquired before 1 st July 2012 0% 0% Future commodity contracts entered into by the members of Pakistan Mercantile Exchange 5% 5% Less than 12 months Capital Gain on disposal of Immovable Property (Under Section 37(1 A) – DIVISION VIII Holding Period Tax Rate Upto five years 10% More than five years 0% 6

DIVISION I OF PART I OF FIRST SCHEDULE Rate of tax for Business Individuals and Association of Persons (AOPs) Total Income Up to Rs. 400, 000 Tax Rate 0% Rs. 400, 001 to Rs. 500, 000 7% of the amount exceeding Rs. 400, 000 Rs. 500, 001 to Rs. 750, 000 Rs. 7, 000 plus 10% of amount exceeding Rs. 500, 000 Rs. 750, 001 to Rs. 1, 500, 000 Rs. 32, 000 plus 15% of amount exceeding Rs. 750, 000 Rs. 1, 500, 001 to Rs. 2, 500, 000 Rs. 144, 500 plus 20% of amount exceeding Rs. 1, 500, 000 Rs. 2, 500, 001 to Rs. 4, 000 Rs. 344, 500 plus 25% of amount exceeding Rs. 2, 500, 000 Rs. 4, 000, 001 to Rs. 6, 000 Rs. 719, 500 plus 30% of amount exceeding Rs. 4, 000 Rs. 6, 000, 001 and above Rs. 1, 319, 500 plus 35% of amount exceeding Rs. 6, 000 Minimum tax U/S 113 @ 1. 00% of the turnover having turnover of Rs. 50 million for TY 2016 & Rs. 10 million for TY 2017. 7

DIVISION II OF PART I OF FIRST SCHEDULE Rate of tax Companies Type of Company Tax Rate Public 31% Banking 35% Others 31% Small Companies 25% Minimum Tax U/S 113 @ 1% and for companies operating trading houses 0. 5% upto tax year 2019 and 1% thereafter. (Clause (57) of Part IV of Second Schedule) Alternative corporate tax U/S 113 C – A company is required to pay corporate tax @ 17% on the accounting profit if the corporate tax is higher than the tax payable by a company under Division II of Part I of the First Schedule and minimum tax payable under any of the provisions of the Ordinance. 8

DIVISION IIA OF PART I OF FIRST SCHEDULE Rates of Super Tax (Under Section 4 B) Type of Company Tax Rate Banking Company 4% of income Person, other than banking company having income equal to or exceeding Rs. 500 million 3% of income 9

ADVANCE TAX UNDER SECTION 148 - IMPORTS Sr. No. Nature of Payment Tax Rate (Filer) (Non-filer) 1(i) Industrial Undertaking Importing Remeltable Steel (PCT Heading 72. 04) 1% 1. 5% 1(ii) Person Importing Potassic Fertilizers 1% 1. 5% 1(iii) Peron Importing Urea 1% 1. 5% 1(iv) Manufacturer covered under SRO 1125 (I)/2011 dated 31 -Dec-11 1% 1. 5% 1(v) Person importing gold 1% 1. 5% 1(vi) Person importing cotton 1% 1. 5% 1(vii) Designated buyers of LNG on behalf of Govt. of Pakistan 1% 1. 5% 2 Person importing pulses 2% 3% 3 Commercial importers covered under SRO 1125 (I)/2011 dated December 31, 2011 3% 4. 5% 4 Ship breakers on import of ships 4. 5% 6. 5% 5 Industrial undertakings not covered under serial # 1 to 4 5. 5% 8% 6 Companies not covered under serial # 1 to 5 5. 5% 8% 7 Person not covered under serial # 1 to 6 6% 9% Responsible Person: Custom Authorities 10

ADVANCE TAX UNDER SECTION 148 - IMPORTS Cooking oil / vegetable ghee (Under Section 148 A) Nature of Payment Tax on local purchase of cooking oil or vegetable ghee by manufacturer Tax Rate (Filer) (Non-Filer) 2% 11

DIVISION I OF PART I OF FIRST SCHEDULE Rate of tax for Salaried Individual (Under Section 149) Total Income Up to Rs. 400, 000 Tax Rate 0% Rs. 400, 001 to Rs. 500, 000 2% of amount exceeding Rs. 400, 000 Rs. 500, 001 to Rs. 750, 000 Rs. 2, 000 plus 5% of amount exceeding Rs. 500, 000 Rs. 750, 001 to Rs. 1, 400, 000 Rs. 14, 500 plus 10% of amount exceeding Rs. 750, 000 Rs. 1, 400, 001 to Rs. 1, 500, 000 Rs. 79, 500 plus 12. 5% of amount exceeding Rs. 1, 400, 000 Rs. 1, 500, 001 to Rs. 1, 800, 000 Rs. 92, 000 plus 15% of amount exceeding Rs. 1, 500, 000 Rs. 1, 800, 001 to Rs. 2, 500, 000 Rs. 137, 000 plus 17. 5% of amount exceeding Rs. 1, 800, 000 Rs. 2, 500, 001 to Rs. 3, 000 Rs. 259, 500 plus 20% of amount exceeding Rs. 2, 500, 000 Rs. 3, 000, 001 to Rs. 3, 500, 000 Rs. 359, 500 plus 22. 5% of amount exceeding Rs. 3, 000 Rs. 3, 500, 001 to Rs. 4, 000 Rs. 472, 000 plus 25% of amount exceeding Rs. 3, 500, 000 Rs. 4, 000, 001 to Rs. 7, 000 Rs. 597, 000 plus 27. 5% of amount exceeding Rs. 4, 000 Rs. 7, 000, 001 and above Rs. 1, 422, 000 plus 30% of amount exceeding Rs. 7, 000 Responsible Person: Every Employer 12

DEDUCTION AT SOURCE – DIVISION III Salary (Under Section 149) Nature of Payment Salary inclusive of perquisites Golden Handshake Tax Rate (Filer) (Non-Filer) Average 3 years average rate of tax Salary (Under Section 149(3)) Nature of Payment Directorship Fee and Board Meeting Responsible Person: Every Employer Tax Rate (Filer) (Non-Filer) 20% of gross amount paid 13

DEDUCTION AT SOURCE – DIVISION III Dividend (Under Section 150) Nature of Payment Dividend Income from Company Reduced Rates: - Purchaser of Wapda privatized power project, company setup for power generation or company supplying coal exclusively to power generation projects. - Collective investment, REIT Scheme or mutual funds Stock Fund Tax Rate (Non-Filer) 12. 5% 20% 7. 5% Money Market Fund, Income Fund or any other fund Filer Non-Filer Individual 10% 15% Company 10% 25% AOP 10% 15% - Provided in case of stock fund if dividend receipts are less than capital gains Responsible Person: Every Person Tax Rate (Filer) 12. 5% 14

DEDUCTION AT SOURCE – DIVISION III Profit on Debt (Under Section 151) Profit on Debt (Under Section 151(1)(a)) Nature of Payment Yield on National Deposit Certificates including Defence Saving Certificates Tax Rate (Filer) Tax Rate (Non-Filer) 10% 17. 5% Responsible Person: National Saving Centre and Post Office Profit on Debt (Under Section 151(1)(b)) Nature of Payment Profit on account or deposits maintained with company or institution Responsible Person: Banking Company PROVIDED THAT for a Non-Filer, if the yield of profit paid is Rs. 500, 000/- or less the rate 15 shall be 10%

DEDUCTION AT SOURCE – DIVISION III Profit on Debt (Under Section 151(1)(c)) Nature of Payment Government Securities Tax Rate (Filer) Tax Rate (Non-Filer) 10% 17. 5% Responsible Person: Payer Profit on Debt (Under Section 151(1)(d)) Nature of Payment Profit on Bonds, Certificates, Debentures, Security or Instruments of any kind other than loan agreements. Responsible Person: Banking Company, Financial Institution, Company, Finance Society PROVIDED THAT for a Non-Filer, if the yield of profit paid is Rs. 500, 000/- or less the rate shall be 10% 16

DEDUCTION AT SOURCE – DIVISION III Payment to Non-residents (Under Section 152) Payment to Non-residents (Under Section 152(1)) Nature of Payment Royalty or Fee for Technical Service Tax Rate (Filer) Tax Rate (Non-Filer) 15% Responsible Person: Every Person making payment 17

DEDUCTION AT SOURCE – DIVISION III Payment to Non-residents (Under Section 152(1 A)) Tax Rate (Filer) Tax Rate (Non-Filer) - Contract or sub-contract under a construction, assembly or installation project in Pakistan including a contract for the supply of supervisory activities relating to such project. 7% 12% - Any other contract for construction or services rendered relating there to. 7% 12% - Contract for advertisement services rendered by TV Satellite Channels. No deduction in respect of payments to foreign news agencies syndicate services and non-resident contributors who have no PE in Pakistan[clause (41 B)Part-IV] 7% 12% Nature of Payment On execution of contract Responsible Person: Every Person making payment 18

DEDUCTION AT SOURCE – DIVISION III Payment to Non-residents (Under Section 152(1 AA)) Nature of Payment Tax Rate (Filer) Any payment of insurance premium or re-insurance to a non-resident person Tax Rate (Non-Filer) 5% Responsible Person: Every person making payment (Not applicable in the case of payment to P. E of non-resident persons, Section 152(2 AA)) Payment to Non-residents (Under Section 152(1 AAA)) Nature of Payment to non-resident media person relaying from outside Pakistan, for advertisement services provided. Tax Rate (Filer) Tax Rate (Non-Filer) 10% Responsible Person: Every person making payment 19

DEDUCTION AT SOURCE – DIVISION III Payment to Non-residents (Under Section 152(2)) Nature of Payment Tax Rate (Filer) Tax Rate (Non-Filer) Payment for profit on debt to a non-resident having no permanent establishment in Pakistan 10% of gross amount paid [clause (5 A) Part-II 2 nd Schedule. Any other payment to non-resident, not otherwise specified 20% of the gross amount or reduced rate under Double Taxation Agreement if applicable Responsible Person: Every person making payment 20

DEDUCTION AT SOURCE – DIVISION III Payment to Non-residents (Under Section 152(2 A)) Tax Rate (Filer) Tax Rate (Non-Filer) (i) Sale of goods by a Company Sale of goods other than by Companies 4% 4. 5% 6% 6. 5% (ii) Rendering/providing of services by Company Rendering/providing of services other than by Companies 8% 10% 12% 15% (ii-a) Rending/providing transport services 2% 2% (iii) Execution of a contract other than a contract for sale of goods or providing/rendering of services. Payment to sports person Payment to a Company 10% 7% 10% 12% Nature of Payment Every Prescribed person making payment to a Permanent Establishment of Non- Resident. For: Responsible Person: Every Person making payment 21

DEDUCTION AT SOURCE – DIVISION III Payment for Foreign produced commercials (Under Section 152 A) Nature of Payment to non-resident foreign produced commercial Tax Rate (Filer) Tax Rate (Non-Filer) 20% Responsible Person: Every Person making payment 22

DEDUCTION AT SOURCE – DIVISION III Payment for Goods, Services and Contracts (Under Section 153) (Payment in full or in part including by way of advance to a resident person. ) Payment for Goods, Services and Contracts (Under Section 153(1)(a)) Tax Rate (Filer) Tax Rate (Non-Filer) For sale of rice, cotton seed, edible oil. 1. 5% In case of supplies made by the distributors of fast moving consumer goods - In case supplier is a company - In case supplier is other than company 3% 3. 5% For sale of any other goods (i)In the case of companies (ii)In the case of other than companies 4% 4. 5% 6% 6. 5% Nature of Payment Responsible Person: Federal Government. Company including a Small Company. Association of person constituted by or under any law. Non-profit Organization Foreign Contractor or Consultant, Consortium or Joint venture. An Exporter or an Export House Association of person having turnover of 50 Million or more. Individual having turnover 23 of 50 Million or more. Persons registered under Sales Tax Act, 1990

DEDUCTION AT SOURCE – DIVISION III Payment for Goods, Services and Contracts (Under Section 153(1)(b)) Nature of Payment Transport services All others (i)In the case of Companies (ii)In all other than Companies (iii)Person making payments to electronic and print media for advertisement services In case of Companies In other cases Reduce Rates: i. Services provided outside Pakistan and receipt brought into Pakistan (Clause 3 Part-II of the 2 nd Schedule) Tax Rate (Filer) Tax Rate (Non-Filer) 2% 2% 8% 10% 12% 15% 1% 1% Responsible Person: Federal Government. Company including a Small Company. Association of person constituted by or under any law. Non-profit Organization Foreign Contractor or Consultant, Consortium or Joint venture. An Exporter or an Export House Association of person having turnover of 50 Million or more. Individual having turnover of 50 Million or more. Persons registered under Sales Tax Act, 1990 24

DEDUCTION AT SOURCE – DIVISION III Payment for Goods, Services and Contracts (Under Section 153(1)(c)) Tax Rate (Filer) Tax Rate (Non-Filer) (i) Payment to Sports persons 10% (ii) In the case of Companies 7% 10% 7. 5% 10% Nature of Payment (iii) In the case of other than companies Responsible Person: Federal Government. Company including a Small Company. Association of person constituted by or under any law. Non-profit Organization Foreign Contractor or Consultant, Consortium or Joint venture. An Exporter or an Export House Association of person having turnover of 50 Million or more. Individual having turnover of 50 Million or more. Persons registered under Sales Tax Act, 1990 25

DEDUCTION AT SOURCE – DIVISION III Payment for Goods, Services and Contracts (Under Section 153(2)) Nature of Payment Every Exporter or Export House deducts Tax on payments in respect of services of stitching, dying, printing etc. received/provided. Division IV (Para-3) of Part-III of 1 st Schedule Tax Rate (Filer) Tax Rate (Non-Filer) 1% Responsible Person: Federal Government. Company including a Small Company. Association of person constituted by or under any law. Non-profit Organization Foreign Contractor or Consultant, Consortium or Joint venture. An Exporter or an Export House Association of person having turnover of 50 Million or more. Individual having turnover of 50 Million or more. Persons registered under Sales Tax Act, 1990 26

DEDUCTION AT SOURCE – DIVISION III Exports and Foreign Indenting Commission (Under Section 154) (Tax to be deducted on the value of export proceeds at the time of export. ) Exports and Foreign Indenting Commission (Under Section 154(1)) Nature of Payment Tax Rate (Filer) On realization of proceeds on account of export of goods [ exemption to cooking oil or vegetable ghee exported to Afghanistan if tax u/s 148 is paid] Tax Rate (Non-Filer) 1% Responsible Person: Authorized dealer / Banking Company Exports and Foreign Indenting Commission (Under Section 154(2)) Nature of Payment On realization of proceeds on account of commission to; I. Non-export indenting agent II. Export indenting agent / export buying house Responsible Person: Authorized dealer / Banking Company Tax Rate (Filer) Tax Rate (Non-Filer) 5% 5% 27

DEDUCTION AT SOURCE – DIVISION III Exports and Foreign Indenting Commission (Under Section 154(3)) Nature of Payment Tax Rate (Filer) On realization of proceeds on account of sale of goods to an exporter under inland back to back LC or any other arrangement as may be prescribed by FBR Tax Rate (Non-Filer) 1% Responsible Person: Authorized dealer / Banking Company Exports and Foreign Indenting Commission (Under Section 154(3 A)) Nature of Payment Tax Rate (Filer) Exports of goods located in EPZ Tax Rate (Non-Filer) 1% Responsible Person: EPZ Authority Exports and Foreign Indenting Commission (Under Section 154(3 B)) Nature of Payment to indirect exporters as defined in DTRE Rules, 2001 Tax Rate (Filer) Tax Rate (Non-Filer) 1% Responsible Person: Direct exporters / export house registered under DTRE Rules, 200128

DEDUCTION AT SOURCE – DIVISION III Exports and Foreign Indenting Commission (Under Section 154(3 C)) Nature of Payment Clearance of goods exported Tax Rate (Filer) Tax Rate (Non-Filer) 1% Responsible Person: Collector of custom 29

DEDUCTION AT SOURCE – DIVISION III Income from Property (Under Section 155) Nature of Payment Tax Rate (Filer) Tax Rate (Non-Filer) Any payment in full or in part including by way of advance on account of rent of immovable property including rent of furniture and fixtures and services relating to such property (A) In case of individual or AOP i. Amount not exceeding 200, 000 ii. 200, 000 but does not exceed 600, 000 iii. 600, 000 but does not exceed 1, 000 iv. 1, 000 but does not exceed 2, 000 v. Exceeding 2, 000 B) In case of company Nil 5% of the amount exceeding 200, 000 Rs. 20, 000+10% of amount exceeding 600, 000 Rs. 60, 000+15% of amount exceeding 1, 000 Rs. 210, 000+20% of amount exceeding 2, 000 15% of the amount of rent paid Responsible Person: The Federal Government, A Provincial Government, Local Government, A Company. A Non-profit organization or a charitable institution, A diplomatic mission of a foreign state. A private educational institution, a boutique, a beauty parlour, a hospital, a clinic or a maternity home. Individuals or AOP paying gross 30 rent of Rs. 1. 5 million and above in a year. Any other person notified by the board.

DEDUCTION AT SOURCE – DIVISION III Prizes and Winnings (Under Section 156) Tax Rate (Filer) Tax Rate (Non-Filer) Payment of prize on a prize bond or cross word puzzle 15% 20% Payment on a winning from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sale 20% Tax Rate (Filer) Tax Rate (Non-Filer) 12% 15% Nature of Payment Responsible Person: Every Person Petroleum Products (Under Section 156 A) Nature of Payment to petrol pump operator on account of sale of petroleum products Responsible Person: Every Person 31

DEDUCTION AT SOURCE – DIVISION III Withdrawal of balance under Pension Fund (Under Section 156 B) Nature of Payment i) Withdrawal before retirement age ii) Withdrawal if in excess of 25% of accumulated balance at or after the retirement age Tax Rate (Filer) Tax Rate (Non-Filer) As specified in sub section (6) of section 12 i. e. average rate of tax for the last 3 preceding years or rate applicable for the year whichever is lower. Responsible Person: Pension Fund Manager 32

DEDUCTION AT SOURCE – DIVISION III Cash Withdrawal from Bank (Under Section 231 A) Nature of Payment of cash withdrawal exceeding Rs. 50, 000/- in a day Tax Rate (Filer) Tax Rate (Non-Filer) 0. 3% 0. 6% Responsible Person: Every Banking Company 33

DEDUCTION AT SOURCE – DIVISION III Advance tax on transactions in bank (Under Section 231 AA) Nature of Payment 1. Sale against cash of any instrument including demand draft, payment order, CDR, STDR, SDR, RTC, or any other instrument of bearer nature or of receipt of cash on cancellation of any of these instruments (except in case of inter-bank or intra-bank transfer and also where payment is made through a crossed cheque for purchase of these financial instruments). 2. Transfer of any sum against cash through online transfer, telegraphic transfer, mail transfer or any other mode of electronic transfer (except online transmission of day to day collection to centralized account of a distributor where the depositor and the beneficiary is the same maintained under cash management arrangements provided by a bank shall be treated as interbank transfer) Tax Rate (Filer) Tax Rate (Non-Filer) 0. 3% of the amount exceeding Rs. 25, 000/in a day 0. 6% of the amount exceeding Rs. 25, 000/in a day Responsible Person: Every banking company non-banking financial institution, exchange company or any authorized dealer of foreign exchange 34

DEDUCTION AT SOURCE – DIVISION III Advance Tax on private motor vehicles (Under Section 231 B) Advance Tax on private motor vehicles (Under Section 231 B(1)) (At the time of registration of motor vehicle) Tax Rate (Filer) Tax Rate (Non-Filer) 1) Upto 850 cc Rs. 10, 000 2) 851 cc to 1000 cc Rs. 20, 000 Rs. 25, 000 3) 1001 cc to 1300 cc Rs. 30, 000 Rs. 40, 000 4) 1301 cc to 1600 cc Rs. 50, 000 Rs. 100, 000 5) 1601 cc to 1800 cc Rs. 75, 000 Rs. 150, 000 6) 1801 cc to 2000 cc Rs. 100, 000 Rs. 200, 000 7) 2001 cc to 2500 cc Rs. 150, 000 Rs. 300, 000 8) 2501 cc to 3000 cc Rs. 200, 000 Rs. 400, 000 9) Above 3000 cc Rs. 250, 000 Rs. 450, 000 Nature of Payment Responsible Person: Motor Vehicle registration authority 35

DEDUCTION AT SOURCE – DIVISION III Advance Tax on private motor vehicles (Under Section 231 B(1 A)) Nature of Payment At the time of leasing of motor vehicle Tax Rate (Filer) Tax Rate (Non-Filer) Nil 3% Responsible Person: Every leasing company, scheduled bank, investment bank, development finance institution or modaraba 36

DEDUCTION AT SOURCE – DIVISION III Advance Tax on private motor vehicles (Under Section 231 B(2)) (At the time of transfer of registration or ownership) Tax Rate (Filer) Tax Rate (Non-Filer) Nil Rs. 5, 000 2) 851 cc to 1000 cc Rs. 5, 000 Rs. 15, 000 3) 1001 cc to 1300 cc Rs. 7, 500 Rs. 25, 000 4) 1301 cc to 1600 cc Rs. 12, 500 Rs. 65, 000 5) 1601 cc to 1800 cc Rs. 18, 750 Rs. 100, 000 6) 1801 cc to 2000 cc Rs. 25, 000 Rs. 135, 000 7) 2001 cc to 2500 cc Rs. 37, 500 Rs. 200, 000 8) 2501 cc to 3000 cc Rs. 50, 000 Rs. 270, 000 9) Above 3000 cc Rs. 62, 500 Rs. 300, 000 Nature of Payment 1) Upto 850 cc Responsible Person: Motor Vehicle registration authority Provided that rate of tax to be collected shall be reduced by 10% each year from the date 37 of first registration in Pakistan.

DEDUCTION AT SOURCE – DIVISION III Brokerage and Commission (Under Section 233) Tax Rate (Filer) Tax Rate (Non-Filer) Brokerage and commission income (including nonresident agents) 12% 15% 1. In case of 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% Nature of Payment Responsible Person: Federal Government, Provincial Government, Local Government, A Company, AOP constituted by or under any law 38

DEDUCTION AT SOURCE – DIVISION III Collection of tax by Stock Exchange (Under Section 233 A) Collection of tax by Stock Exchange (Under Section 233(1)(a)) Nature of Payment On purchase of shares in lieu of the commission earned by its Member Tax Rate (Filer) Tax Rate (Non-Filer) 0. 02% of purchase value Responsible Person: Stock exchange registered in Pakistan Collection of tax by Stock Exchange (Under Section 233(1)(b)) Nature of Payment Tax Rate (Filer) On sale of shares in lieu of the commission earned by its Member Tax Rate (Non-Filer) 0. 02% of sale value Responsible Person: Stock exchange registered in Pakistan Collection of tax by NCCPL (Under Section 233 AA) Nature of Payment Tax Rate (Filer) Advance Tax on margin financing through Stock Exchanges registered in Pakistan. Responsible Person: National Clearing Company of Pakistan Limited Tax Rate (Non-Filer) 10% of Mark-up or interest 39

DEDUCTION AT SOURCE – DIVISION III Tax on Motor Vehicles (Under Section 234) Tax Rate (Filer) Tax Rate (Non-Filer) Rs. 2. 50 per kg of the laden weight Rs. 4. 00 per kg of the laden weight Rs. 1200 per annum Rs. 50 per seat per annum Rs. 100 per seat per annum (b) 10 or more persons but less than 20 persons. Rs. 100 per seat per annum Rs. 200 per seat per annum (c) 20 persons or more. Rs. 300 per seat per annum Rs. 500 per seat per Annum Nature of Payment (i)In the case of goods Transport Vehicles. 1(A)Transport vehicle with laden weight of 8120 Kg or more after a period ten years from the date of first registration Passenger transport (2)In the case of Passenger Transport Vehicles plying for hire, seating capacity. (a) 4 or more persons but less than 10 persons. Responsible Person: Person collecting motor vehicle tax 40

DEDUCTION AT SOURCE – DIVISION III Tax on Motor Vehicles (Under Section 234) Tax Rate (Filer) Tax Rate (Non-Filer) Rs. 800 Rs. 1, 200 b) 1001 cc to 1199 cc Rs. 1, 500 Rs. 4, 000 c) 1200 cc to 1299 cc Rs. 1, 750 Rs. 5, 000 d) 1300 cc to 1499 cc Rs. 2, 500 Rs. 7, 500 e) 1500 cc to 1599 cc Rs. 3, 750 Rs. 12, 000 f) 1600 cc to 1999 cc Rs. 4, 500 Rs. 15, 000 g) 2000 cc & above Rs. 10, 000 Rs. 30, 000 Nature of Payment (3) Other Private Motor Vehicles With Engine Capacity of : a) Upto 1000 cc Responsible Person: Person collecting motor vehicle tax CNG Stations (Under Section 234 A) Nature of Payment On the amount of gas bill of a Compressed Natural Gas Responsible Person: Person preparing gas consumption bill Tax Rate (Filer) Tax Rate (Non-Filer) 4% 41

DEDUCTION AT SOURCE – DIVISION III Electricity Consumption (Under Section 235(4)) Nature of Payment Commercial and industrial consumer bill amount exceeding Rs. 400/- per month to Rs. 20, 000/- per month Bill amount exceeding Rs. 20, 000/- per month Tax Rate (Filer) Tax Rate (Non-Filer) As given in Part-IV, Division IV of First Schedule (Tax Ranging from Rs. 80 to Rs. 1500 depending on the monthly bill) 12% for commercial consumers and 5% for industrial consumers Responsible Person: Person preparing electricity bill 42

DEDUCTION AT SOURCE – DIVISION III Domestic Electricity Consumption (Under Section 235 A) Nature of Payment Domestic consumers Tax Rate (Filer) Tax Rate (Non-Filer) 7. 5% if the amount of monthly bill is Rs. 75, 000/or more 0% if the amount of monthly bill is less than Rs. 75, 000/- Responsible Person: Person preparing electricity bill Tax on steel melters, re-rollers etc. (Under Section 235 B) Nature of Payment Tax on steel melters, re-rollers on production of steel billets, ingots and mild steel (MS products) excluding stainless steel. Responsible Person: Person preparing electricity bill Tax Rate (Filer) Tax Rate (Non-Filer) Rs. 1/- per unit of electricity consumed 43

DEDUCTION AT SOURCE – DIVISION III Telephone and Internet Users (Under Section 236) Nature of Payment Tax Rate (Filer) Tax Rate (Non-Filer) Telephone subscribers Monthly bill up to Rs. 1, 000/Bill exceeding Rs. 1, 000/- Nil 10% Subscriber of internet, mobile telephone and pre-paid internet of telephone card 14% of bill amount Responsible Person: Person preparing telephone bill / issuing or selling prepaid card for mobile phones Advance tax at the time of sale by auction (Under Section 236 A) Nature of Payment Sale by auction Tax Rate (Filer) Tax Rate (Non-Filer) 10% Responsible Person: Every person 44

DEDUCTION AT SOURCE – DIVISION III Advance Tax on Purchase of Air Ticket (Under Section 236 B) Nature of Payment Purchase of domestic air Ticket Tax Rate (Filer) Tax Rate (Non-Filer) 5% of gross amount of ticket Responsible Person: Person preparing air ticket Advance Tax on sale/transfer of immovable property (Under Section 236 C) Nature of Payment Transfer or attesting transfer of Immoveable property. Tax Rate (Filer) Tax Rate (Non-Filer) 1% 2% Responsible Person: Every person Registering or attesting transfer Advance Tax on Functions and Gatherings (Under Section 236 D) Nature of Payment Every prescribed person shall collect tax on the total amount of bill paid by a person holding or arranging functions Tax Rate (Filer) Tax Rate (Non-Filer) 5% Responsible Person: Owner, Manager & operator of the Marriage Hall, Club, Hotel, Marquee etc. 45

DEDUCTION AT SOURCE – DIVISION III Advance Tax on Cable Operators and Other Electronic Media (Under Section 236 F) Nature of Payment Tax Rate (Filer) Tax Rate (Non-Filer) (1) PEMRA shall collect tax on issuance of license for distribution or renewal of license to a license. As per various slabs given in Division XIII of 1 st Schedule (Ranging from Rs. 7, 500/- to Rs. 875, 500/- on license fee and from Rs. 10, 000/- to Rs. 900, 000/- on renewal (2) In case of IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Right 20% of the permission fee or renewal fee (3) In addition to tax collected under para (2) PEMRA shall collect tax at the rate of fifty per cent of the permission fee or renewal fee, as the case may be, from every TV Channel on which foreign TV drama serial or a play in any language, other than English, is screened or viewed. 50% of permission fee or renewal fee, as the case may be Responsible Person: PEMRA 46

DEDUCTION AT SOURCE – DIVISION III Advance Tax on sales to distributors, dealers & wholesalers (Under Section 236 G) Tax Rate (Filer) Tax Rate (Non-Filer) 0. 1% on Gross Sale i) Fertilizer 0. 7% 1. 4% ii) Other than Fertilizer 0. 1% 0. 2% Nature of Payment Advance tax has to be collected from wholesaler, distributor & dealers at the time of sales made to them. Responsible Person: Every Manufacture or Commercial importer of electronics sugar, cement, iron & steel products, motorcycles, pesticides, Cigarettes glass, textile, beverages, paint or foam sector Advance Tax on sales to retailers (Under Section 236 H) Nature of Payment Advance tax has to be collected from retailers at the time of sales made to them Tax Rate (Filer) Tax Rate (Non-Filer) 0. 5% on gross sales Responsible Person: Every Manufacture , distributor, dealer, wholesaler or Commercial importer of electronics, sugar, cement, iron & steel products, motorcycles, pesticides, Cigarettes glass, textile, beverages, paint or foam sector 47

DEDUCTION AT SOURCE – DIVISION III Collection of Advance Tax by Educational Institutions (Under Section 236 I) Nature of Payment Tax Rate (Filer) Every Educational institution has to collect advance Tax on the amount exceeding Rs. 20, 000 per annum. Tax Rate (Non-Filer) 5% Responsible Person: Person preparing fee voucher or challan Advance Tax on dealers, commission agents and arhatis (Under Section 236 J) Nature of Payment Tax Rate (Filer) Tax Rate (Non-Filer) Every Market committee shall collect tax from dealers, commission agents or Arhtis on issuance or renewal of license Group or Class A Group or Class B Group or Class C Any other category Rs. 10. 000 Rs. 7, 500 Rs. 5, 000 Responsible Person: Every Market Committee or any commodity Regulatory authority 48

DEDUCTION AT SOURCE – DIVISION III Advance Tax on purchase/transfer of immovable property (Under Section 236 K) Tax Rate (Filer) Tax Rate (Non-Filer) i) Where value of Immovable property is upto 3 million 0% 0% ii) Where the value of immovable property is more than 3 million 2% 4% Nature of Payment Responsible Person: Every person registering or attesting transfer Advance Tax on purchase of International Air Ticket (Under Section 236 L) Nature of Payment Tax Rate (Filer) Tax Rate (Non-Filer) i. First/Executive Class Rs. 16, 000/- person ii. Others excluding economy Rs. 12, 000/- person iii. Economy Nil Responsible Person: Airlines issuing the air ticket 49

DEDUCTION AT SOURCE – DIVISION III Bonus shares (Under Section 236 M) Nature of Payment Bonus shares issued by the companies quoted on Stock Exchange Tax Rate (Filer) Tax Rate (Non-Filer) 5% of the value of bonus shares determined on the basis of day end price on the first day of the closure of books Responsible Person: Every Company issuing bonus shares Bonus Shares (Under Section 236 N) Nature of Payment Bonus shares issued by the companies not quoted on Stock Exchange Tax Rate (Filer) Tax Rate (Non-Filer) 5% of the value of bonus shares on the first day of the closure of books Responsible Person: Every company issuing bonus shares Advance Tax on Banking transactions (Under Section 236 P) Nature of Payment Advance Tax on banking transactions otherwise than through cash by Non-filer Responsible Person: Every banking company Tax Rate (Filer) Tax Rate (Non-Filer) 0. 6% 50

DEDUCTION AT SOURCE – DIVISION III Payment to residents for use of Machinery & Equipment (Under Section 236 Q) Nature of Payment Tax Rate (Filer) Tax Rate (Non-Filer) (i) Payments for the right to use Industrial, Commercial, and scientific equipment 10% (ii) Payments on account of rent of Machinery, Industrial and Commercial and Scientific equipment 10% Responsible Person: Every prescribed person as per Section 153(7) Advance Tax on education related expenses remitted abroad (Under Section 236 R) Nature of Payment Collection of advance tax on education related expenses remitted abroad Tax Rate (Filer) Tax Rate (Non-Filer) 5% Responsible Person: Banks, Financial institutions, Foreign exchange company or any other person responsible for remitting foreign currency abroad 51

DEDUCTION AT SOURCE – DIVISION III Dividend in Specie (Under Section 236 S) Nature of Payment Dividend in specie Tax Rate (Filer) Tax Rate (Non-Filer) 12. 5% 17. 5% Responsible Person: Every person making payment of dividend in specie Advance Tax on Insurance Premium (Under Section 236 U) Tax Rate (Filer) Tax Rate (Non-Filer) General Insurance Premium Nil 4% Life Insurance Premium (if exceeding Rs. 0. 2 million per annum) Nil 1% Others Nil 0% Nature of Payment Responsible Person: Every Insurance Company 52

DEDUCTION AT SOURCE – DIVISION III Advance Tax on extraction of minerals (Under Section 236 V) Nature of Payment Advance tax shall be collected on value of minerals extracted, produced, dispatched and carried away from licensed or leased areas of the mines Tax Rate (Filer) Tax Rate (Non-Filer) 0% 5% Responsible Person: Provincial authority collecting royalty per metric ton from the lease-holder of mines or any person extracting minerals 53

K N A H T U O Y 54