ISLAMABAD: The Federal Board of Revenue (FBR) has granted exemption to Crop Loan Insurance Scheme (CLIS) and Livestock Insurance Scheme (LIS) from paying withholding tax.
The FBR exempted CLIS and LIC from WHT payment under section 236 U of the Income Tax Ordinance 2001 and also issued an SRO.06(I)/2016 in this regard. However, the provisions of the section 236U will not apply to an insurance company collecting premium under CLIS and LIS.
The revenue authority introduced a new section 236U in the Income Tax Ordinance 2001 through the Finance Act, 2016 which required collection of advance income tax at 4 per cent by every insurance company and agents of insurance company to collect tax from non-filers at the time of collection of general insurance premium.
The Finance Division is operating two above-mentioned schemes, through which the government reimburses the insurance premium of the loans obtained from the banks by the subsistence farmers.
