FBR Introduces SOPs for Withholding Tax Challan Creation under Sections 236C & 236K for Holders of POC or NICOP

The FBR has now provided Standard operating procedures (SOPs) relating to the preparation of the withholding tax challans under section 236C and section 236K of the IT Ordinance 2001 for the holders of the Pakistan Origin Cards (POC) or the National Identity cards for overseas Pakistanis (NICOP).

Key Details

The federal government under the Finance Act 2022 has added Clause 111AC under the Second Amendment Schedule PART IV of the Income Tax Ordinance, 2001. This clause helps non-resident individuals holding POC or NICOP to be free from higher tax rates under Section 236C & 236K irrespective of not coming in AT.

New Process in the IRIS System

To implement this exemption:

• Uploading Documents: This exemption is only extended to Non-resident taxpayers and to avail this one they have to upload their POC or NICOP while creating the CPR with the IRIS system.
• Provisional PSID Generation: When uploading, a temporary PSID will be produced which will be sent to the login of the Chief Commissioner Inland Revenue (CCIR).
• Verification Process:
  1. The CCIR will then send the case to Commissioner Inland Revenue (CIR).
  2. The CIR will assessment the status of the taxpayer as non-resident and such supporting evidence as may be necessary.
  3. If the CIR is satisfied with this exemption, the CIR will approve the exemption and the taxpayer will be notified through SMS or e-mail.

Prioritization and Timelines

In an effort to de-emphasize the negative impact of verification the FBR has said that the verification process should take not more than one business day.

This change is to revise the procedure for non-resident taxpayers so that they may exercise their exemptions in the simplest way possible. It is typical for CCIRs to be asked to perform verifications’ quickly in order to maintain compliance and expediency.

Stay tuned for further developments!

Explore: Income Tax Ordinance in Pakistan