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28-Model Extension
Section 156 mandates tax deduction at source on prizes and winnings, including prize bonds, lotteries, quizzes, promotions, and crossword puzzles, with non-cash prizes taxed on fair market value. Section 156A applies withholding on commissions or discounts for petroleum sales. Rates double for non-filers, ensuring final tax, compliance, and transparent reporting.
Where;
156(1): Every person paying prize on a prize bond, or winnings from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sale, or cross-word puzzle shall deduct tax from the gross amount paid at the rate specified in DIVISION VI OF PART III OF THE FIRST SCHEDULE
156(2): Where a prize, referred to in sub-section (1), is not in cash, the person while giving the prize shall collect tax on the fair market value of the prize.
156(3):The tax deductible under sub-section (1) or collected under sub-section (2) shall be final tax on the income from prizes or winnings referred to in the said sub-sections.
WITHHOLDING TAX DEDUCTION / RATES | |||||
|---|---|---|---|---|---|
APPLICABLE TO CO / AOP / IND | |||||
SR | UNDER | PARTICULARS / DESCRIPTION | FILER | NON | TAX |
1 | 156 | Gross amount of; Prize bond winning, or Prize on crossword puzzle | 15% | 30% | FTR |
2 | Gross amount of; Raffle, Lottery winning, Prize on winning a quiz, or Prize offered by a company for promotion of sales | 20% | 40% | ||
Where;
156A(1): Every person selling petroleum products to a petrol pump operator shall deduct tax from the amount of commission or discount allowed to the operator at the rate specified in DIVISION VIA OF PART III OF THE FIRST SCHEDULE
156A(2):The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of petroleum products to which sub-section (1) applies.
WITHHOLDING TAX DEDUCTION / RATES | |||||
|---|---|---|---|---|---|
APPLICABLE TO CO / AOP / IND | |||||
SR | UNDER | PARTICULARS / DESCRIPTION | FILER | NON | TAX |
1 | 156A | Commission or discount allowed to the petrol pump operator | 12% | 24% | FTR |
Section 156 of the Income Tax Ordinance, 2001 requires persons making payments of prizes or winnings—such as prize bonds, raffles, lotteries, quiz prizes, promotional prizes, or crossword puzzle rewards to deduct tax at source from the gross amount. For non-cash prizes, tax is collected on the fair market value. The tax deducted under this section constitutes a final tax on such income.
Similarly, Section 156A mandates withholding tax on commissions or discounts allowed by persons selling petroleum products to petrol pump operators. The deducted tax under this section is also treated as final.
Overall, Section 156 ensuring proper tax collection, compliance, and transparent reporting of income from prizes, winnings, and petroleum-related transactions.
