Tax Rates applicable during 2022-2023 for phone and Internet usage

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Tax Rates applicable during 2022-2023 for phone and Internet usage
Tax Rates applicable during 2022-2023 for phone and Internet usage

During 2022-2023, the Federal Board of Revenue (FBR) will announce withholding tax rates for using telephones and the Internet.

After the Income Tax Ordinance, 2001, was amended through the Finance Act, 2022, the FBR issued withholding tax cards for 2022-2023.

As per Section 236 of the 2001 Income Tax Ordinance, tax authorities collect withholding tax on Internet and phone usage.

Under Section 236 of the Ordinance, the following tax rates are applicable:

WITHHOLDING TAX RATES:

Taxes are charged to telephone subscribers (other than mobile phone subscribers) whose monthly bills exceed Rs1,000.

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 If you are a subscriber of the Internet, mobile telephone, pre-paid internet card, or sale of a unit through any electronic medium or in any form, the tax rate will be 15%.

Section 236: Telephone and internet users

(1) The following amounts are subject to advance tax at the rates specified in Division V Part IV of the First Schedule:

(a) telephone bill of a subscriber;

(b) prepaid cards for telephones;

(c) sale of units through any electronic medium or whatever form; and

(d) internet bill of a subscriber; and

(e) prepaid cards for the Internet.

(2) Telephone or internet bills must be prepared the same way as telephone or internet charges.

(3) When issuing or selling prepaid telephone or internet cards, the person issuing or selling the cards must collect advance tax from purchasers.

(3A) When distributing or selling units, any person issuing or selling them electronically or otherwise shall collect an advance tax under sub-section (1) from the purchaser.

(1) Unless a person produces a certificate from the Commissioner that his income during the tax year is exempt from tax, advance tax cannot be collected from the Government, a foreign diplomat, or a diplomatic mission in Pakistan.

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