03-29-2009, 06:52 AM
By Sajid Chaudhry
ISLAMABAD: The Federal Board of Revenue (FBR) announced on Saturday that sellers of shares at stock exchanges would be entitled to take the credit of the tax withheld from them as well as the member of stock exchange in respect of the shares owned by them.
To enable the seller of shares to claim tax credit, member of the stock exchange would certify the quantum of tax withheld from each person traded through the member and would furnish a statement, to the concerned Director General, RTO, for the verification of claim of the taxpayers who traded the shares through the member.
Income Tax Circular No 02 of 2009 issued here on Saturday stated that anomaly arising out of amendments in section 233A – collection of tax by a stock exchange registered in Pakistan has been clarified.
A reference has been made to the FBR to clarify that who will take the credit of the tax withheld under clause © of sub-section (1) of section 233A of the Income Tax Ordinance, 2001. Whether the member of the stock exchange or the seller of shares who did the trading of shares through the said member?
Section 233A of the Income Tax Ordinance, 2001 relates to collection of tax by a stock exchange registered in Pakistan. A stock exchange registered in Pakistan shall collect advance tax, (a) at the rates specified in Division IIA of Part IV of First Schedule from its members on purchase of shares in lieu of 2 [tax on] the commission earned by such members. (b) at the rates specified in Division IIA of Part IV of First 3 [Schedule] from its members on sale of shares in lieu of 4 [tax on] the commission earned by such members. © from its 5 [Members] in respect of trading of shares by the members at the rates specified in Division IIA of Part IV of First Schedule; and (d) from its 6 [Members] in respect of financing of carryover trades [7] in share business at the rate specified in Division IIA of Part IV of First schedule. The tax collected under clauses (a) to © of sub-section (1) shall be minimum tax.
The matter has been considered. FBR has said that though the tax in respect of trading of shares is deducted from the member by the stock exchange yet the tax so withheld under clause © of sub-section (1) of section 233A of the Income Tax Ordinance, 2001, does not pertain to him exclusively.
He is only an intermediary and the tax withheld under the aforesaid provisions of law, belongs to the seller of shares also who traded through him. Legally speaking, the seller is entitled to take the credit of the tax so withheld as well as the member in respect of the shares owned by him. The member of the stock exchange is the custodian of the record, as the transactions of shares are made through him on the stock exchange.
It is, therefore, clarified that the member would certify the quantum of tax withheld from each person traded through him and shall furnish a statement, to the concerned Director General, RTO, for the verification of claim of the taxpayers who traded the shares through him.
http://www.dailytimes.com.pk/default.asp...2009_pg5_4
ISLAMABAD: The Federal Board of Revenue (FBR) announced on Saturday that sellers of shares at stock exchanges would be entitled to take the credit of the tax withheld from them as well as the member of stock exchange in respect of the shares owned by them.
To enable the seller of shares to claim tax credit, member of the stock exchange would certify the quantum of tax withheld from each person traded through the member and would furnish a statement, to the concerned Director General, RTO, for the verification of claim of the taxpayers who traded the shares through the member.
Income Tax Circular No 02 of 2009 issued here on Saturday stated that anomaly arising out of amendments in section 233A – collection of tax by a stock exchange registered in Pakistan has been clarified.
A reference has been made to the FBR to clarify that who will take the credit of the tax withheld under clause © of sub-section (1) of section 233A of the Income Tax Ordinance, 2001. Whether the member of the stock exchange or the seller of shares who did the trading of shares through the said member?
Section 233A of the Income Tax Ordinance, 2001 relates to collection of tax by a stock exchange registered in Pakistan. A stock exchange registered in Pakistan shall collect advance tax, (a) at the rates specified in Division IIA of Part IV of First Schedule from its members on purchase of shares in lieu of 2 [tax on] the commission earned by such members. (b) at the rates specified in Division IIA of Part IV of First 3 [Schedule] from its members on sale of shares in lieu of 4 [tax on] the commission earned by such members. © from its 5 [Members] in respect of trading of shares by the members at the rates specified in Division IIA of Part IV of First Schedule; and (d) from its 6 [Members] in respect of financing of carryover trades [7] in share business at the rate specified in Division IIA of Part IV of First schedule. The tax collected under clauses (a) to © of sub-section (1) shall be minimum tax.
The matter has been considered. FBR has said that though the tax in respect of trading of shares is deducted from the member by the stock exchange yet the tax so withheld under clause © of sub-section (1) of section 233A of the Income Tax Ordinance, 2001, does not pertain to him exclusively.
He is only an intermediary and the tax withheld under the aforesaid provisions of law, belongs to the seller of shares also who traded through him. Legally speaking, the seller is entitled to take the credit of the tax so withheld as well as the member in respect of the shares owned by him. The member of the stock exchange is the custodian of the record, as the transactions of shares are made through him on the stock exchange.
It is, therefore, clarified that the member would certify the quantum of tax withheld from each person traded through him and shall furnish a statement, to the concerned Director General, RTO, for the verification of claim of the taxpayers who traded the shares through him.
http://www.dailytimes.com.pk/default.asp...2009_pg5_4