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FBR seeks details of persons from education institutions paying annual fee above Rs200,000

FBR seeks details of persons from education institutions paying annual fee above Rs200,000

ISLAMABAD: Federal Board of Revenue (FBR) has directed educational institutions to provide details of persons paying annual fee above Rs200,000 in next three days.

Sources told that educational institutions including schools, colleges, universities, tuition centers, technical institutions etc. had been asked to provide details of parents or individuals paying annual fee above Rs200,000 by January 31, 2020.

The educational institutions have been directed to provide complete details of persons paying fees, which should include, name, address, CNIC amount of fee and tax deducted/withheld for the tax year 2020.

The sources told that the educational institutions would provide the details along with their biannual withholding statement due on January 31, 2020.

They said that under Section 236I of Income Tax Ordinance, 2001 educational institutions are required to collect withholding tax at five percent on gross amount of fee from person paying fee.

The section read as:

“236I. Collection of advance tax by educational institutions.— (1) There shall be collected advance tax at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.

(2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.

(3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.

(4) The term ‘fee’ includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.

(5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.

(6) Advance tax under this section shall not be collected from a person who is a non-resident and,—

(i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

(ii) furnishes a certificate that he has no Pakistan-source income; and

(iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.”

The rate of collection of tax under section 236I shall be 5 percent of the amount of fee.