The Punjab Revenue Authority (PRA) has declared telecommunication, banking, and insurance companies as withholding agents. These companies are now required to withhold 80 percent of the tax amount on the receipt of taxable services, while the service provider company must deposit the remaining 20 percent to the government.
Exercising the powers conferred under Section 76 of the Punjab Sales Tax on Services Act, 2012, the Punjab Revenue Authority, with the approval of the government, has amended the Punjab Sales Tax on Services (Withholding) Rules, 2015, with immediate effect.
The key change in the PRA withholding rules is that withholding agents will now also be responsible for deducting PRA tax—even from registered service providers that are companies—which was not required under the previous withholding rules.
According to the notification, telecommunication, banking, and insurance companies, upon receipt of taxable services (other than advertisement services) from a service provider company that is an active taxpayer, shall withhold 80 percent of the tax amount. The service provider company shall deposit the remaining 20 percent to the government.
Other companies, upon receipt of taxable services (other than advertisement services) from a service provider company that is an active taxpayer, shall withhold only 20 percent of the tax amount, while the remaining 80 percent shall be deposited by the service provider company.
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Increase in tax net is good approach but implementing withholding tax on every person even the senior citizens who saved their saving in Islamic banking are neither getting benefit on investment rather withholding tax has further increased from this month.
Please think of Private salaried individuals they are paying double tax and cannot earn money from other sources.