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Advance tax on payment of fee to Educational Institutions

GOVERNMENT OF PAKISTAN
REVENUE DIVISION
FEDERAL BOARD OF REVENUE

C.No.4 (36) ITP/2013                                                        Islamabad, the 19 July, 2013

Circular No.6 of 2013
Income Tax

Subject: FINANCE ACT, 2013 — EXPLANATION REGARDING  IMPORTANT AMENDMENTS MADE IN THE INCOME TAX  ORDINANCE, 2001.

Salient features of the amendments made in the Income Tax Ordinance, 2001 through Finance Act. 2013 are explained as under:-

[Section 23611

Please Note: Since 2013-14, as per newly inserted section 2361 every educational institution is required to collect advance income tax at the rate of 5% on the amount of fee paid to an educational institution.

  1. Advance tax on payment of fee to Educational Institutions [Section 2361]

As per newly inserted section 2361 every educational institution is required to collect advance income tax at the rate of 5% on the amount of fee paid to an educational institution. The person responsible for preparing monthly, bimonthly or quarterly fee voucher or challan shall also charge withholding tax in case the fee exceeds two hundred thousand rupees annually.

The term fee includes tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable. The tax collected in this section is adjustable. The withholding agent for the purposes of this section i.e. educational institution shall also provide details in the withholding statement to be filed under section 165 to the Income Tax Ordinance,

2001.

http://downloadtfbr.gov.pk/Docs/201372214742171992013CIRCULAR06.pdf