Tax On Telephone And Internet Prepaid Cards

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📞 Section 236: Telephone & Internet Users

Advance Tax Calculator | Income Tax Ordinance 2001

⚙️ Calculate Advance Tax

Tax Year

Category ⓘ

Amount (Rs.) ⓘ

✅ Exempt (Govt/Diplomat/Certificate) ⚠️ Non‑filer (u/s 114B)

📊 Tax Payable

Rs. 0

Applicable rate: 0%

Bill amount: Rs. 0

Tax: Rs. 0

📘 Section 236 Summary

What this section does: It mandates advance tax collection on telephone and internet bills, prepaid cards, and electronic units. The tax is collected by the service provider at the time of issuing the bill or selling the card.

Who it applies to: All subscribers/users of telephones (landline/mobile), internet, and purchasers of prepaid cards or electronic top‑ups.

Why it matters: It broadens the tax base and ensures advance collection. Non‑filers face a higher rate (75%) on most categories as per the proviso under section 114B.

🧮 How This Calculator Works

Input: Select category, enter amount, and tick exemption/non‑filer status if applicable.
Processing: Based on the selected tax year, the calculator applies the correct rate from Division V of Part IV of First Schedule. For landline, tax applies only if amount > Rs.1,000. For other categories, full amount is taxable. If exempt, tax = 0. If non‑filer and category is not landline, rate becomes 75%.
Output: Instant display of tax payable and a detailed breakdown.

📝 Practical Example

Scenario: Mr. A has a monthly mobile bill of Rs. 2,500. He is a filer.
➡️ Category: Mobile telephone, amount Rs.2,500, no exemption, not non‑filer.
Calculation: Rate = 15% → Tax = 2,500 × 0.15 = Rs.375.

Non‑filer example: Same bill but Mr. A is a non‑filer.
➡️ Rate = 75% → Tax = 2,500 × 0.75 = Rs.1,875.

⚠️ Key Conditions & Warnings

🔹 Exemption applies only to Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.
🔹 The higher 75% rate for non‑filers applies only to internet, mobile, prepaid cards, and electronic units – not to landline.
🔹 For landline, no tax is collected if the monthly bill is ≤ Rs.1,000.
🔹 Always keep your CNIC/ NTN updated with the service provider to avoid incorrect deduction.
🔹 The tax collected is adjustable against final tax liability when filing your return.

❓ Frequently Asked Questions (FAQ)

1. Is this tax refundable?

It is advance tax, adjustable against your total income tax liability when you file your annual return. If excess is paid, you can claim a refund.

2. Do I have to pay this tax if I use a prepaid SIM?

Yes, at the time of purchasing a prepaid card or recharging via electronic medium, 15% (or 75% for non‑filers) is collected as advance tax.

3. Who determines if I am a non‑filer?

The FBR issues Income Tax General Orders under section 114B listing non‑filers. Service providers use that list to apply the 75% rate.

4. What if my landline bill is exactly Rs.1,000?

No tax is deducted because the threshold is “exceeds Rs. 1,000”.

5. Are overseas Pakistanis exempt?

Generally no, unless they fall under the exempt categories (diplomat, etc.). However, non‑filer restrictions may not apply to certain NICOP holders – see section 114B exceptions.

6. Can I get a certificate to avoid this tax?

Yes, if your income is exempt from tax, you can obtain a certificate from the Commissioner, and present it to the service provider.

7. Does this section apply to internet dongles?

Yes, internet subscribers include dongles, fibre, or any broadband connection.

8. What is the legal basis for the 75% rate?

The proviso to clause (b) of Division V, Part IV of the First Schedule, read with section 114B, empowers FBR to notify non‑filers for whom the rate becomes 75%.