Income Tax Ordinance, 2001

CHAPTER-II

CHARGE OF TAX

From: 2023-07-01 - To: 0000-00-00 1[5A. Tax on undistributed profits.- (1) For tax 2[years 2017 to 2019], a tax shall be imposed at the rate of 3[five] percent of its accounting profit before tax on every public company, other than a scheduled bank or a modaraba, that derives profit for a tax year but does not distribute at least 4[twenty] percent of its after tax profits within six months of the end of the tax year through cash 5[***]: Provided that for tax year 2017, bonus shares or cash dividends may be distributed before the due date mentioned in sub-section (2) of section 118, for filing of a return. (2) The provisions of sub-section (1) shall not apply to- (a) a company qualifying for exemption under clause (132) of Part I of the Second Schedule; and (b) a company in which not less than fifty percent shares are held by the Government. _______________________________________________________________ 1-Substituted vide the Finance Act, 2017 (XXVII of 2017) assented on 19th June, 2017. At the time of substitution Section 5A was as under:- “5A. Tax on undistributed reserves.- (1) Subject to this Ordinance, a tax shall be imposed at the rate of ten percent, on every public company other than a scheduled bank or a modaraba, that derives profits for a tax year but does not distribute cash dividends within six months of the end of the said tax year or distributes dividends to such an extent that its reserves, after such distribution, are in excess of hundred percent of its paid up capital, so much of its reserves as exceed hundred per cent of its paid up capital shall be treated as income of the said company: Provided that for tax year 2015, cash dividends may be distributed before the due date mentioned in sub-section (2) of section 118, for filing of return for tax year 2015. (2) The provisions of sub-section (1) shall not apply to--- (a) a public company which distributes profit equal to either forty percent of its after tax profits or fifty percent of its paid up capital, whichever is less, within six months of the end of the tax year; (b) a company qualifying for exemption under clause (132) of part 1 of the Second Schedule; and (c) a company in which not…