ISLAMABAD: Federal Board of Revenue (FBR) has excluded taxpayers having turnover below Rs100 million from mandatory collection and deduction of withholding tax.
The FBR issued Income Tax Circular No. 03 of 2020 a day earlier to explain changes made to Income Tax Ordinance, 2001 through Finance Act, 2020.
The FBR said that in order to promote ease of doing business, the Finance Act, 2020 has made certain amendments whereby, effective from July 01, 2020, threshold of turnover for an individual or an AOP for categorization as a “prescribed person” in terms of sub-section (7) of section 153 of the Ordinance has been enhanced from “Rs.50 million and above” to “Rs.100 million and above” in the preceding tax year.
Similarly, obligation to withhold tax under section 153 of the Ordinance as a “prescribed person” under sub-section (7) of section 153 of the Ordinance w.e.f. July 01, 2020 shall be limited to persons registered under the Sales Tax Act,1990 having turnover of Rs.100 million or above in any of the preceding tax years.
Prior to change, all sales tax registered persons irrespective of annual turnover, fell in the ambit of a prescribed person for the purpose of tax withholding u/s 153 of the Ordinance, the FBR added.