Currently, the parents of students have been continuously becoming victims and being fleeced by charging 5 percent tax on the educational fees of over Rs200,000 at a time when every segment of the society is getting relief package in the aftermath of the spread of coronavirus in Pakistan.

The government desires to penalize those who were presupposed to file tax returns as per the law, however, but didn’t do so, said federal minister Hammad Azhar said on Friday while unveiling the federal budget for 2020-21.

The income tax bracket is also updated if anyone earning Rs400,000 per year or more is required to file tax returns and those who earn more than Rs600,000 per year are taxed based on their income bracket.

Tax Procedure According To Section 236I

• As per newly inserted section 236I, every educational institution is required to collect advance income tax at the rate of 5% on the amount of fee paid to an educational institution.
• The person preparing a fee voucher or challan shall charge advance tax under sub-section(1) in the manner the fee is charged.
• The term ‘’ fee” includes tuition fee and all charges received by educational institutions, by whatever name called, excluding the amount which is refundable.
• The tax collected in this section is adjustable against the tax liability of either of the parents or guardians making payment of the fee.
• Advance tax under this section shall not be collected from a person who is a non-resident and,

(i) furnishes a copy of passport as evidence to the educational institution that during the previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

(ii) furnishes a certificate that he has no Pakistan-source income, and

(iii) the fee is remitted directly from abroad through normal banking channels to the bank

What Should You Do?

The government is increasing taxes day by day on everything including student fees. What can you do to save some of your amount from taxes is to become an active filer. A filer can enjoy many benefits as compared to non-filers. Becoming a filer can help you save tax on student fees. Get yourself registered with us! and enjoy tax benefits

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