Revenue Board clarifies definition under Income Tax Ordinance

ISLAMABAD (February 15 2003) : The Central Board of Revenue (CBR) has issued a clarification to all Regional Commissioners of Income Tax (RCITs) pertaining to withholding of tax by 'Association of Persons' under Income Tax Ordinance 2001.

According to a recent directive to the RCITs, partnership of individuals constituted through an instrument of partnership deed and registered with the Registrar of Firms under the Partnership Act, 1932, does not fall within the meaning of the 'Prescribed Persons' as given in sub-section (9) of section 153 of the Income Tax Ordinance 2001. As per sub-section (9) of section 153 (payment for goods and services) of the Income Tax Ordinance 2001, 'prescribed person' means the federal government, a company, an association of persons, a foreign contractor or consultant, or a consortium of joint venture.

'Professional services' include the services of accountants, architects, dentists, doctors, engineers, interior decorators and lawyers, otherwise than as an employee.

'Sale of goods' includes a sale of goods for cash or on credit, whether under written contract or not.