Deduct WHT against Supplies and Goods limits

[AbdulSamad]

Every one know as a withholding agent we are deducting WHT on Goods and Services 3.5% and 6% respectively.

I have heard there is a per transaction / payments limit which are 25,000 and 10,000 respectively.

Is that correct please refer me complete section with clause of income tax ordinance 2001.


Examples-

If A Paid 5000 to B Co. for services and after three days he paid 7000 to B Co, A did not deduct 6% WHT on B due to both transaction individually less than Rs 10,000.

Question A did right or wrong? please answer.



Thanks

Abdul Samad

[LapTop]

<b>CIRCULAR NO. 26 OF 1991 (INCOME TAX)</b>

The monetary limit of exemption from deduction of tax from payments account of supply of goods has been raised to Rs. 25,000/-. Previously the laid limit was Rs. 10,000/- as notified vide SRO. 586(I)/91 of 30th June, 1991.
In respect of payments made on account of services rendered or execution of a contract, the monetary limit of exemption shall be Rs, 10,000/-. Now withholding tax shall not be deducted from the aforesaid payments unless such payments exceed Rs. 25,000/- in the case of supply of goods and Rs. 10,000/- in the case of services rendered or execution of a contract, in a financial year. However, if such payments exceed the above monetary limits during a financial year, then tax shall be deducted from all payments exceeding the said limits. Tax shall also be deductible on all such payments made earlier from which no deduction of tax was made.

[AbdulSamad]

Mr. Lap top


It means, it this WHT does not depend upon per transaction its depend upon annual?

Now as given above exmaples earlier, A got a mistake coz he did not deduct WHT !


Abdul Samad