Details of persons paying the annual charge above Rs200,000 in the next three days are requested by the Federal Revenue Board (FBR).
Sources in FBR stated that by 31 January 2020, parents and individuals paying an annual fee over RS200,000 were asked to give details of educational institutions, including schools, colleges, universities, tuition centers, technical establishments, etc.
In order to provide complete information on individuals paying charges, names, addresses, CNIC charges sum and tax deducted / kept for the tax year 2020, education institutions should be guided.
They said that under Section 236I of Income Tax Ordinance, 2001 educational institutions are required to collect withholding tax at five percent on gross amount of fee from person paying fee
The section read as:
“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 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.”
The rate of collection of tax under section 236I shall be 5 percent of the amount of fee.