Following is the text of the notification SRO. 1072: The following draft of certain further amendments in the Income Tax Rules, 2002, which the Federal Board of Revenue proposes to make in exercise of the powers conferred by sub-section (I) of Section 237 of the Income Tax Ordnance, 2001 (XLIX of 2001), is hereby published for the information of all persons likely to be affected thereby, as required by sub-section (3) of the said section, and notice is hereby given that the draft will be taken into consideration by the Federal Board of Revenue after seven days of its publication in the official Gazette.
Any objection or suggestion, which may be received from any person, in respect of the said draft, before the expiry of the aforesaid period, shall be considered by the FBR.
In the aforesaid Rules, rule 43-B shall be re-numbered as sub-rule (I) of that rule and thereafter the following new sub-rule (2) shall be added, namely:
"(2) In case of remittance abroad to non-resident, seven days before the amount is intended to be remitted abroad to that non-resident, through State Bank or any banking company."
When contacted, a tax lawyer told this correspondent that proposed amendment relates to provisions of Section 158 of the Income Tax Ordinance, 2001 read with Rule 43-B of Income Tax Rules, 2002 which reads as under:
Section 158: Time of deduction of tax.- A person required to deduct tax from an amount paid by the person shall deduct tax:-
(a) in the case of deduction under section 151, at the time the amount is paid or credited to the account of recipient, whichever is earlier; and (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.
Rule 43B- Amount actually paid under section 158.- The amount actually paid as per clause (c) of section 158 of the Ordinance includes:-
(a) amount paid by the person, as withholding agent;
(b) amount paid on behalf of the person, as withholding agent;
(c) amount paid at the instruction of the person, as withholding agent; and
(d) gross amount settled or discharged by the person, as withholding agent, to other person before netting off or adjusting such amount against any receivable from the said other person.
Conclusively time limit for income tax deduction at source in the light of provisions of Section 158 of the Income Tax Ordinance, 2001 to non-resident has now been proposed at seven days before the amount is intended to be remitted abroad to that non-resident, through State Bank of Pakistan or any other banking company.
Copyright Business Recorder, 2017