KARACHI: The Finance Act 2016 has imposed 3.0 percent adjustable advanced income tax on the turnover declared by persons registered under provincial sales tax laws.
According to Finance Act 2016, a new section 147(A) has been introduced to Income Tax Ordinance, 2001 for advance tax from provincial sales tax registered persons.
Under the new provision, (1) every provincial sales tax registered person shall be liable to pay adjustable advance tax at the rate of three percent of the turnover declared before the provincial revenue authority.
The advance tax under sub-section (1) shall be paid monthly at the time when sales tax return is to be filed with the provincial revenue authority.
Advance tax paid under this section may be taken into account while working out advance tax payable under Section 147 of the Income Tax Ordinance, 2001.
According to the Finance Act 2016, the provisions of the ordinance shall apply to any advance tax due under this section as if the amount due were tax due under an assessment order.
A taxpayer who has paid advance tax under this provision for a tax year shall be allowed a tax credit for that tax in computing the tax due by the taxpayer on the taxable income of the taxpayer for that year.
A tax credit allowed for advance tax paid under this section shall be applied in accordance the ordinance.
A tax credit or part of a tax credit allowed under this section for a tax year that is not able to be credited shall be refunded to the taxpayer.
According to the Finance Act 2016, this section shall not apply to a person who was filer on the June 30 of the previous tax year.