ISLAMABAD: Federal Board of Revenue (FBR) received details from educational institutions of persons paying over Rs200,000 annual fee FBR).
According to sources, the educational institutions had provided the details of persons paying annual fee of above Rs200,000 along with the withholding tax statement for the period July – December 2019.
They said that the educational institutions are required to provide details of persons paying fees including their names, address, CNIC and amount tax withheld.
The sources said that being withholding agents the educational institutions are required to file withholding statements biannually. The withholding statement for the period July – December 2019/2020 was due on January 31, 2020.
The educational institutions are required to withholding tax under Section 236I of Income Tax Ordinance, 2001.
Section 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 i.e. five percent 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.”
