Lahore 23°C
Karachi 28°C
Tax collected or deducted as a final tax
(1) This section shall apply where —
(b) the tax required to be deducted is a final tax under sub- section (1E) of section 152, 152A , sub-section (2) of section 154A , clause (b) of sub-section (3) of section 154B, sub-section (3) of section 156, sub-section (2) or section 156A or sub-section (7) of section 236Z on the income from which it was deductible .
(2) Where this section applies —
(a) the income shall not be chargeable to tax under any head of income in computing the taxable income of the person;
(b) no deduction shall be allowable under this Ordinance for any expenditure incurred in deriving the income;
(c) the amount of the income shall not be reduced by —
(i) any deductible allowance under Part IX of Chapter III; or (ii) the set off of any loss;
(d) the tax deducted shall not be reduced by any tax credit allowed under this Ordinance;
(e) there shall be no refund of the tax collected or deducted unless the tax so collected or deducted is in excess of the amount for which the taxpayer is chargeable under this Ordinance ; and .
(f) tax deductible has not been deducted, or short deducted, the said non-deduction or short deduction may be recovered under section 162, and all the provisions of this Ordinance shall apply accordingly.
(3) Where all the income derived by a person in a tax year is subject to final taxation under the provisions referred to in sub-section (1) or under sections 5, 6 and 7 an assessment shall be treated to have been made under section Explanation.— The expression, an assessment shall be treated to have been made under section 120 means,—
(a) the Commissioner shall be taken to have made an assessment of income for that tax year, and the tax due thereon equal to those respective amounts specified in the return ; and (b) the return shall be taken for all purposes of this Ordinance to be an assessment order.
(4) Where the tax collected or deducted is final tax under any provision of this Ordinance and hundred percent higher tax rate has been prescribed for the said tax under the Tenth Schedule, the final tax shall be the tax rate prescribed in the First Schedule and the excess tax collected under the Tenth Schedule specified for persons not appearing in the active taxpayers’ list shall be adjustable in case the return is filed before finalization of assessment as provided in rule 4 of the Tenth Schedule. PART VI REFUNDS
(b) the tax required to be deducted is a final tax under sub- section (1E) of section 152, 152A , sub-section (2) of section 154A , clause (b) of sub-section (3) of section 154B, sub-section (3) of section 156, sub-section (2) or section 156A or sub-section (7) of section 236Z on the income from which it was deductible .
(2) Where this section applies —
(a) the income shall not be chargeable to tax under any head of income in computing the taxable income of the person;
(b) no deduction shall be allowable under this Ordinance for any expenditure incurred in deriving the income;
(c) the amount of the income shall not be reduced by —
(i) any deductible allowance under Part IX of Chapter III; or (ii) the set off of any loss;
(d) the tax deducted shall not be reduced by any tax credit allowed under this Ordinance;
(e) there shall be no refund of the tax collected or deducted unless the tax so collected or deducted is in excess of the amount for which the taxpayer is chargeable under this Ordinance ; and .
(f) tax deductible has not been deducted, or short deducted, the said non-deduction or short deduction may be recovered under section 162, and all the provisions of this Ordinance shall apply accordingly.
(3) Where all the income derived by a person in a tax year is subject to final taxation under the provisions referred to in sub-section (1) or under sections 5, 6 and 7 an assessment shall be treated to have been made under section Explanation.— The expression, an assessment shall be treated to have been made under section 120 means,—
(a) the Commissioner shall be taken to have made an assessment of income for that tax year, and the tax due thereon equal to those respective amounts specified in the return ; and (b) the return shall be taken for all purposes of this Ordinance to be an assessment order.
(4) Where the tax collected or deducted is final tax under any provision of this Ordinance and hundred percent higher tax rate has been prescribed for the said tax under the Tenth Schedule, the final tax shall be the tax rate prescribed in the First Schedule and the excess tax collected under the Tenth Schedule specified for persons not appearing in the active taxpayers’ list shall be adjustable in case the return is filed before finalization of assessment as provided in rule 4 of the Tenth Schedule. PART VI REFUNDS
Amendment history (25)
- Clause (e) omitted by the Finance Act, 2024. The omitted clause read as follow
- Clause (ea) inserted by the Finance Act, 2021.
- In section 168 in sub-section (3) clause (b) omitted by the Finance Act, 2019 the omitted clause read
- Added by the Finance Act, 2013.
- Clause (i) omitted by the Finance Act, 2013. The omitted clause (i)
- In section 168 in sub-section (3) clause (b) omitted by the Finance Act, 2019 the omitted clause
- Clause (k) added by the Finance Act, 2023.
- Added by the Finance Act, 2009.
- Clause (a) omitted through Finance Act, 2020 the substituted clause
- The words “deduction of tax” substituted by the Finance Act, 2012.
- 152”substituted by Finance Act, 2020 dated 30 June, 2020
- The expression “sub-section (4) of section 154,” omitted by the Finance Act, 2024.
- Inserted by the Finance Act, 2021.
- Expression inserted by the Finance Act, 2026.
- The word, digit and comma “section 155,” omitted by the Finance Act, 2010.
- The words, figures and brackets “or sub-section (2) of section 157” omitted by the Finance Act,
- Inserted by the Finance Act, 2004.
- The word “of” substituted by the word “or” by the Finance Act, 2014.
- Expression inserted by the Finance Act, 2023.
- The expressions omitted through Finance Act, 2020 dated 30 June, 2020 the omitted expressions
- 233A” omitted by the Finance Act, 2008.
- The words “has been deducted” substituted by the Finance Act, 2012.
- The word “and” omitted by the Finance Act, 2012.
- Added by the Finance Act, 2002.
- Full stop substituted by the Finance Act, 2012.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 359
Unofficial reference, compiled from the FBR’s consolidated Income Tax Ordinance 2001 (amended up to 30 June 2026). Provided for general information only — not an official FBR publication and not legal or tax advice. Always verify against the official FBR text before relying on it for filing or any decision.