INCOME TAX (SECOND AMENDMENT) ACT, 2016
An Act further to amend the Income Tax Ordinance, 2001
[Gazette of Pakistan, Extraordinary, Part-I, 30th January, 2016]
ACT NO. II OF 2016
No. F. 22(41)/2015-Legis., dated 29.1.2016.–The following Act of Majlis-e-Shoora (Parliament) received the assent of the President on the 29th January, 2016 and is hereby published for general information:–
WHEREAS it is expedient further to amend the Income Tax Ordinance, 2001 (XLIX of 2001), for the purposes hereinafter appearing;
It is enacted as follows:–
1. Short title and commencement.–(1) This Act may be called the Income Tax (Second Amendment) Act, 2016.
2. It shall come into force at once.
2. Amendment of Section 153 and 236-P and Second Schedule, Ordinance XLIX of 2001.–In the Income Tax Ordinance, 2001 (XLIX of 2001),–
(1) in Section 153,–
(a) in sub-section (3), in the provision, in clause (b), for semicolon and the word “;and” the expression “, provided that” shall be substituted and thereafter the following sub-clauses shall be added, namely:–
“(i) where the aforesaid minimum tax for providing or rendering services, in respect of sectors as specified in clause (94) of Part IV of the Second Schedule is in excess of tax payable under Division II of Part I of the First Schedule, the excess amount of tax paid shall be carried forward for adjustment against tax liability under the aforesaid Part of the subsequent tax year;
(ii) where the excess tax is not wholly adjusted, the amount not adjusted shall be carried forward to the following tax year and adjusted against tax liability under the aforesaid Part for that year, and so on, but the said excess shall not be carried forward to more than five tax years immediately succeeding the tax year for which the excess was first paid; and
(iii) the said excess amount shall not be carried forward in case of a company for which provisions of this clause are not applicable under Clause (94) of Part IV of the Second Schedule; and”; and
(b) after sub-section (4), the following new sub-section shall be inserted, namely:–
“(4-A) The Commissioner, on an application made by the recipient of a payment referred to in clause (94) of Part IV of the Second Schedule, in cases where the said recipient has fulfilled the conditions as specified in the said clause, by an order in writing for a period of at least three months, may allow any person to make the payment without deduction of tax in respect of payments as referred to in Clauses (b) of sub-section (1) of Section 153:
Provided that the recipient of the payment has made advance payment of tax equal to two percent of the total turnover of the corresponding period of the immediately preceding tax year.”;
(2) in Section 236-P, in sub-section (4), the expression “Pakistan Realtime Interbank Settlement Mechanism (PRISM) transactions or” shall be omitted; and
(3) in the Second Schedule, in Part IV, after clause (93), the following new clause shall be added, namely:
“(94) The provisions of clause (b) of the proviso to sub-section (3) of Section 153 shall not apply for tax year 2016 to a company being a filer and engaged in providing or rendering freight forwarding services, air cargo services, courier services, manpower outsourcing services, hotel services, security guard services, software development services, tracking services, advertising services (other than by print or electronic media), share registrar services, engineering services or car rental services:
Provided that the tax payable or paid on the income from providing or rendering aforesaid services shall not be less than two percent of the gross amount of turnover from all sources and that the company furnishes in writing an irrevocable undertaking by the fifteenth day of November, 2015 to present its accounts to the Commissioner within thirty days of filing of return, for audit of its income tax affairs for tax year 2016.