Income Tax Ordinance, 2001

Chapter- X

(PART V) ADVANCE TAX AND DEDUCTION OF TAX AT SOURCE (147-169)

149. Salary. — (1) Every 1[person responsible for] paying salary to an employee shall, at the time of payment, deduct tax from the amount paid at the employee’s average rate of tax computed at the rates specified in Division I of Part I of the First Schedule on the estimated income of the employee chargeable under the head “Salary” for the tax year in which the payment is made 2[including tax under section 4AB] after making 3[adjustment of tax withheld from employee under other heads and tax credit admissible under section 61 4[and 63] during the tax year after obtaining documentary evidence], as may be necessary, for 5[:]

6[(i) tax withheld from the employee under this Ordinance during the tax year;

(ii) any excess deduction or deficiency arising out of any previous deduction; or