Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 51
June 28, 1993 

All Authorised Dealers
in Foreign Exchange,

Dear Sirs,

RELEASE OF FOREIGN EXCHANGE FOR TRAVEL
ABROAD - LEVY OF 5% TAX

In terms of sub-section (5B) of Section 50 of the Income Tax Ordinance, 1979 introduced through Finance Bill, 1993, Authorized Dealers are required to collect w.e.f. 1-7-1993 withholding tax @ 5% at the time of release of foreign exchange for travel abroad including business travel against 'T', T-1, T-2 forms and Blanket Permission but excluding travel for Hajj and Umrah or on official tour. It will be the responsibility of the Authorized Dealers releasing foreign exchange for travel abroad to collect the tax from the travelers @ 5% of the rupee equivalent of the foreign currency sold, as calculated at the exchange rate prevalent at the time of such release and deposit the same in the Government account under the Head "0113500" maintained with State Bank of Pakistan (or National Bank of Pakistan where State Bank of Pakistan’s branch is not operating) on the working day following the date of release of foreign exchange, through challans. While prepare separate 'E-4'/'P-4' schedules for releases subject to payment of tax and those exempt from payment of tax and this fact shall be prominently indicated at the top of the schedules. Photostat copies of the paid challans alongwith statements (in duplicate) of release of foreign exchange on Annexure 'A' covering cases subject to payment of tax and on Annexure 'B' exempt from tax should be attached to the relevant 'E-4'/'P-4' schedules besides relevant 'T', T-1, T-2 forms and photo copy of Blanket Permission (where release is against Blanket Permission) in the monthly foreign exchange returns. In the case of release of Travel and Exchange Quota for ‘Hajj’ and ‘Umrah’, the Authorized Dealers will release foreign exchange only after the intending traveler has obtained visa for the purpose, and photo copies of pages 1, 2, 3 with inside title page and those pages of the passport on which endorsement of Hajj Visa or Umrah Visa and release of foreign exchange is made shall also be furnished to the Control together with other prescribed documents while submitting the monthly foreign exchange returns.

2. It should be noted that non-deposit or the delay in deposit of the amounts of tax in the Government Account shall attract penalty @ Rs.4.00 per Rs.10,000.00 (or part thereof) per day.

3. The persons from whom collection of advance tax under Section 50(5-B) is made would be entitled to claim its credit in their annual income-tax returns for the relevant period. Therefore, the Authorized Dealers shall issue proper receipts to the travelers in respect of tax collected from them, where demanded, for producing the same to the Income Tax authorities.

 

       
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