Chapter IX - Income Tax Rules 2002

40. Exemption or lower rate certificate u/s 159.- (1) An application for a certificate under sub-section (1) of section 159 shall be made in the form specified in Part-VII of the First Schedule to these rules.

(2) A certificate issued by the Commissioner under sub-section (1) of section 159 shall be in the form specified in Part VIII of the First Schedule to these rules.

41 Tax deducted from salary. (1) Subject to sub-rule (2), every employer shall deduct tax from a payment of salary at the rate specified in section 149 read with in the First Schedule to the Income Tax Ordinance, 2001.

(2) The Commissioner may, upon application in writing by an employer (other than the Government) and notwithstanding anything contained in these rules, permit an employer to pay tax deducted from salary paid to employees in a lump sum for each employee every month based on the average amount of tax deductible every month from such income and to furnish a reconciliation statement at the end of the financial year in the prescribed form sub-rule 6.

(2) Where an employer has been granted permission under sub-rule (1), the employer shall –

(a) compute the tax due on the income chargeable under the head “Salary” for each employee and make any adjustments as necessary in the deduction from salary for the month of June; and

(b) furnish a reconciliation statement to the Commissioner in the prescribed form for each employee within fifteen days after the end of the financial year.

(4) Where an employee leaves employment before the end of the financial year, the adjustment referred to in clause (a) of sub-rule (3) shall be made, and the statement referred to in clause (b) of sub-rule (3) shall be furnished, within fifteen days after termination of the employee’s employment.

(4) Where an employer ceases to carry on business in a financial year, the adjustment referred to in clause (a) of sub-rule (3) shall be made, and the statement referred to in clause (b) of sub-rule (3) shall be furnished prior to ceasing business.

(5) The adjustments referred to in sub-rule (3) shall be made for each individual employee and any excess recovered from one employee should not be adjusted against any short recovery from another employee.

S. No.	Name of Employee	National Tax Number	Designation	Tax deducted from July to May	Tax deducted during June	Total tax deducted.
1	2	3	4	5	6	7

42. Payment of tax deducted.- (1) All amounts deducted under section 149 by, or on behalf of, the Government shall be paid to the credit of the Federal Government on the day the amount was collected or deducted.

(2) Except where sub-rule (1) or (5) applies, all amounts deducted under section 149 in a month shall be paid to the credit of the Federal Government by remittance to the Government Treasury, an authorised branch of the State Bank of Pakistan or the National Bank of Pakistan within 15 days from the end of the month.

(3) Where the annual salary paid by an employer to its employees for a tax year is estimated to be less than 300,000 rupees per employee, the employer may apply to the Commissioner for permission to pay tax deducted under section 149 on a quarterly basis, provided the quarterly returns are regularly filed.

(4) An application under sub-rule (3) shall be made to the Commissioner in writing –

(5) Where the Commissioner grants an application under sub-rule (4), all amounts deducted under section 149 in a quarter shall be paid to the credit of the Federal Government by remittance to the Government Treasury, an authorised branch of the State Bank of Pakistan, or the National Bank of Pakistan –

(a) for the quarter ending on the 30^th day of September, by the 15^th day of October;

(b) for the quarter ending on the 31^st day of December, by the 15^th day of January;

(6) The amount paid by 23^rd day of June, for the quarter ending the 30^th day of June shall be based on the amount paid for the quarter ending the 31^st day of March and the employer shall make an adjustment based on actual salary paid for the quarter by the 31^st day of July next following.

(7) The payment of any amount to which this rule applies shall be accompanied by an income tax challan.

(9) The prescribed income tax authorities for the purposes of submission of original copies of income tax challans under this rule shall be specified by the Central Board of Revenue through open circular from time to time.

43. Certificate of deduction of tax from salary. - (1) An employer shall issue to every employee employed by the employer in a financial year a certificate of deduction of tax from salary in the form specified in Part-III of Second Schedule to these rules within sixty days after the end of the employee’s tax year.

(2) Where an employee leaves employment before the end of the financial year, the employer shall issue to the employee a certificate of deduction of tax from salary for the period of employment in the year within seven days after termination of the employee’s employment.

(3) An employer who ceases to carry on business in a financial year shall issue a certificate of deduction of tax from salary to each employee prior to ceasing business.

(4) An employer who fails to issue a certificate of deduction of tax from salary as required under sub-rules (1), (2) or (3) shall commit an offence punishable on conviction under clause (c) of sub-section (1) of section 191.

(5) Where a certificate of deduction of tax from salary has been lost, stolen or destroyed, the recipient of the certificate may request, in writing, that the issuer of the certificate issue a duplicate certificate.

(6) Where a request has been made under sub-rule (5), the issuer of the certificate shall comply with the request and the certificate so issued shall be clearly marked “duplicate”.

(7) The certificate of deduction of tax issued by an employer to an employee shall be treated an “Employer’s Certificate in lieu of Return of Income” for the purposes of rule 35.

44 Certificate of deduction from salary.- (Omitted by SRO No. 651(I)/2004 Dated 30th July 2004)

45. Furnishing of employer’s certificates to Commissioner.- (Omitted by SRO No. 651(I)/2004 Dated 30th July 2004)

46. Certificate issuing authorities - (1) An employer’s certificate in lieu of return of income referred to in rule 43 shall, in the case of a Government employee, be prepared and issued to the employee by-

(a) civil audit officers for all gazetted officers and others who draw their pay from audit offices on separate bills and also for all pensioners who draw their pensions from audit offices;
(b) chief accounts officer, Ministry of Foreign Affairs, for all gazetted officers and others in the employment of the said Ministry;
(c) treasury officers for all gazetted officers and others who draw their pay from treasuries on separate bills without countersignature and also for all pensioners who draw their pensions from treasuries;
(d) heads of civil or military offices for all non-gazetted officers whose pay is drawn on establishment bills or on bills countersigned by the head of office;
(e) forest disbursing officers and Public Works Department disbursing officers in cases where direct payment from treasuries is not made, for themselves and their establishments;
(f) head postmasters for,--
(i) themselves, their gazetted subordinates and the establishments of which the establishment pay bills are prepared by them;
(ii) supervising and controlling gazetted officers of whose headquarters post offices they are in-charge; and
(iii) pensioners drawing their pensions through post offices;
(g) head record clerks or account officer railway mail service, for themselves and all the staff whose pay is drawn in their establishment pay bills; and
(h) the disbursing officers in the case of the administrative and audit officers;
(i) controllers of military accounts (including divisional military supply, marine and field controllers) for all gazetted military officers under their audit;
(j) disbursing officers in the military works department for themselves and their establishments; or
(k) chief accounts officers or chief auditor of railways concerned for all railway employees under their audit.
(2) An employer’s certificate in lieu of return of income referred to in rule 43 shall, in any other case, be prepared and issued to the employee by,-

(a) the designated officer of the department under specific order,
(b) secretary of company;
(c) accounts officer authorized in this behalf for payment of salary;
(d) managing member or partner of an association of persons; or
(e) employer.”; and

47 Collection or deduction of tax.- Every person obliged under the Ordinance to collect tax from an amount or deduct tax from a payment shall collect or deduct the tax as specified in the Ordinance.

48 Certificate of collection or deduction.- (1) This rule applies for the purposes of sub-section (1) of section 164, which obliges a person –

(b) deducting tax from a payment under Division III of Part V of Chapter X of the Ordinance except in the case of salary;

(2) deducting tax under the Sixth Schedule, to issue a certificate as specified in rule 50 to the person from whom tax has been collected or to whom the payment has been made.

(3) A certificate required to be furnished under sub-section (1) of section 164 (other than in respect of the deduction of tax from salary and under sub-rule (2)) shall be in the form specified under rules in this Division.

(4) Where a certificate issued under sub-section (1) of section 164 has been lost, stolen or destroyed, the recipient of the certificate may request, in writing, that the issuer of the certificate issue a duplicate certificate.

(5) Where a request has been made under sub-rule (5), the issuer of the certificate shall comply with the request and the certificate so issued shall be clearly marked “duplicate”.

49 Certificate of collection/ deduction of tax at source.- Certificate u/s 164 to issue to the recipient payee or to the person who would receive credit for such tax deduction/ collection. The certificate has to be serially numbered and issued in duplicate to the person

Certified that a sum of Rs . ______________ (Amount of tax collected/ deducted in figures)

under section* ________________________ (Specify section of Income Tax Ordinance, 2001)

(Gross amount on which tax collected/ deducted in the matter of collection of tax u/s 234, 235 and 236)

148	Import of goods.	154(1)	Realisation of foreign exchange proceeds on account of export of goods.
150	Dividend	154(2)	Realisation of foreign exchange proceeds on account of indenting commission.
151	Profit on debt.	154(3)	Realisation of the proceeds on account of sale of goods to an exporters under an inland back-to back letter of credit.
152(1)	Royalty or fees for technical services paid to non-resident.	155	Rent of immovable property etc.
152(2)	Other payments (specify) to non-resident person excluding those covered u/s 152(1), 149, 150, 153, 155 and 156.	156	Prize on a prize bond, winnings from a raffle, lottery or cross word puzzle.

		233	Brokerage or commission
153(1)	Sale of goods/ rendering of services/ execution of contract by a resident person.	234	Along with motor vehicle tax.
153(3)	Execution of a turnkey contract; a contract or sub-contract for design, construction or supply of plant and equipment under a power project; a contract or sub-contract under a construction, assembly or installation project in Pakistan, including a contract for the supply of supervisory activities in relation to such project; or any other contract for construction or services rendered, other than a contract to which section 152 applies; by a non-resident person.	235	Electricity consumption
		236	Telephone users.

50. Payment of tax collected or deducted.- (1) This rule applies for the purposes of section 160, which provides for –

(a) the payment of tax collected under Division II of Part V of Chapter X of the Ordinance or deducted under Division III of Part V of Chapter X or Chapter XII of the Ordinance;

(b) the payment of tax collected or deducted under Chapter XII of the Ordinance; and

(3) All amounts to which this rule applies that have been collected or deducted by, or on behalf of, the Government shall be paid to the credit of the Federal Government on the day the amount was collected or deducted.

(4) All amounts to which this rule applies (other than where sub-rule (2) applies) that have been collected or deducted by a person shall be paid to the credit of the Federal Government by remittance to the Government Treasury, an authorised branch of the State Bank of Pakistan or the National Bank of Pakistan within one week from the date the amount was collected or deducted.

(5) The payment of any amount to which sub-rule (2) applies shall be accompanied by an income tax challan and the statement in respect of sub-rule (2) as under:-

In case where the trustees of an approved superannuation fund repay any contribution made by the employer to an employee during his lifetime but not at or in connection with the termination of his employment, or in lieu or in commutation of an annuity, they shall forthwith send to the a statement giving the following particulars, namely.-

Name of the Employee	Address	National Tax Number	The period for which the employer has contributed to the supreannuation fund.	The amount of contributions repaid.		The average of deduction of income tax during the preceding three years.	Amount of income tax deducted on repayment.	Date of deposit of tax in government treasury.	Treasury Challan No.
				Principal	Interest
1	2	3	4	5</