5% tax on rental income

[insaan]

s-155
Every (words "Subject to sub-section (2), every" substituted by Finance Bill 2006) <b>prescribed person</b> making a payment in full or part (including a payment by way of advance) to any person on account of <b>rent of immovable property</b> (including rent of furniture and fixtures, and amounts for services relating to such property) shall deduct tax from the gross amount of rent paid at the rate specified in Division V of Part III of the First Schedule.(5%)(3) In this section, “prescribed person” means –

(i) the Federal Government;

(ii) a Provincial Government;

(iii) local authority;

(iv) a company;

(v) a non-profit organization;

(vi) a diplomatic mission of a foreign state; or

(vii) any other person notified by the Central Board of Revenue for the purpose of this section

<u>so only the prescribed person are required to deduct tax
on rent of immovable property</u>

+

liablity for person receiving rent may arise in case of failure of tax deduction at source
refer section 160,161,162

updated income tax ordinance is available at
http//www.taxonline.com.pk/incometax/itaxord2001/sections/itord2001.html