CIRCULAR NO 07 OF 2010, Islamabad, dated 30 June, 2010

ADVANCE TAX ON TRANSACTIONS IN BANK (SECTION 231AA) C.No. l(12)WHT/2010 GOVERNMENT OF PAKISTAN (REVENUE DIVISION) FEDERAL BOARD OF REVENUE CIRCULAR NO 07 OF 2010, Islamabad, dated 30 June, 2010 Subject: ADVANCE TAX ON TRANSACTIONS IN BANK (SECTION 231AA) CIRCULAR NO 07 OF 2010, Islamabad, dated 30 June, 2010:- Through Finance Act 2010, new section 231AA has been introduced in the Income Tax Ordinance, 2001. The provisions of this section are explained as under: 1. Under this section every - (i) Banking company; (ii) Non-banking financial institution; (iii) Exchange company; or (iv) Authorized dealer of foreign exchange is required to deduct adjustable advance tax @ 0.3% on sale of any instrument against cash including the following: (i) Demand Draft; . (ii) Pay order; (iii)CDR; (iv) SpR; (v) STDR; (vi). RTC; or (vii) Any other instrument of bearer nature; 2. The tax is deductible on transfers if made against cash including - (i) on line transfer; (ii) telegraphic transfer; (iii) mail transfer; and (iv) any other mode of electronic transfer. 3. This tax shall also be charged on payment if made in cash on cancellation of any of the instruments referred above. 4. This…