Written by Akhter Syed in Taxation Taxpayers may claim credit for eligible tax collected or deducted during Tax Year 2027, subject to statutory restrictions, while unused eligible credits may qualify for refunds. The Federal Board of Revenue (FBR) has explained the rules governing tax credits for amounts collected or deducted under Section 168 of the Income Tax Ordinance, 2001, for Tax Year 2027. According to the Income Tax Ordinance updated up to June 30, 2026, Tax Year 2027 covers the period from July 1, 2026, to June 30, 2027. Section 168 provides that tax deducted from payments is treated as income derived by the recipient, while tax collected or deducted is generally treated as tax paid by the person from whom it was collected or deducted. Subject to the conditions and exceptions specified in the law, taxpayers are entitled to claim credit for eligible tax collected or deducted when calculating their tax liability on taxable income for the relevant tax year. The provision also addresses tax credits for companies that are members of associations of persons (AOPs). Such companies may claim credit for tax collected or deducted from the association according to a prescribed formula based on their share of profits, the association’s taxable income…