ISLAMABAD: Federal Board of Revenue (FBR) has updated withholding tax rates on purchase of domestic and international air tickets during tax year 2021.
The FBR issued withholding tax card 2020-2021 (updated up to June 30, 2020) after incorporating amendments made to Income Tax Ordinance, 2001 through Finance Act, 2020.
Under Section 236B of Income Tax Ordinance, 2001, person preparing air ticket shall collect/deduct withholding tax at five percent of the gross amount of ticket from purchaser of domestic air travel ticket at the time of realization of sale proceeds.
The tax withheld shall be adjustable against payable liability.
Under Section 236L of the Ordinance, airlines issuing the air ticket shall collect withholding tax from purchasers of international air travel tickets at the time of realization of sale proceeds.
The rate of advance tax on purchase of international ticket shall be:
(i) First/Executive class: Rs16000 per person
(ii) Others excluding Economy: Rs12000 per person
(iii) Economy: the tax rate shall be zero
The tax withheld under this section shall be adjustable against payable liability.
