Written by Akhter Syed in Taxation Under Section 235 of the Income Tax Ordinance, domestic consumers on the Active Taxpayer List are exempt, while tax collected from commercial and industrial consumers is subject to specified adjustment rules. The Federal Board of Revenue (FBR) has clarified the rules for collecting advance income tax on electricity bills during Tax Year 2027, covering the period from July 1, 2026, to June 30, 2027. According to the Income Tax Ordinance 2001, updated up to June 30, 2026, Section 235 provides for advance tax collection on electricity consumption by commercial, industrial and domestic consumers. However, domestic electricity consumers whose names appear on the Active Taxpayer List (ATL) are exempt from this collection. Under the provision, electricity distribution companies and other bill-issuing entities must collect advance tax alongside electricity charges. The taxable bill amount includes sales tax and all incidental charges. Who is exempt from electricity bill tax? The FBR has specified that advance tax under Section 235 will not be collected from individuals who provide a certificate issued by the…