Lahore 22°C
Priority of tax collected or deducted
(1) Tax collected by a person under Division II of this Part or Chapter XII or deducted from a payment under Division III of this Part or Chapter XII shall be —
(a) held by the person in trust for the Federal Government; and (b) not subject to attachment in respect of any debt or liability of the person.
(2) In the event of the liquidation or bankruptcy of a person who has collected or deducted tax from a payment under Division III of this Part or the person in liquidation or bankruptcy and the Commissioner shall have a first claim for that amount before any distribution of property is made.
(3) Every amount that a person is required to deduct from a payment under Division III of this Part or Chapter XII shall be –
(a) a first charge on the payment; and (b) deducted prior to any other amount that the person may be required to deduct from the payment by virtue of an order of any Court or under any other law.
(a) held by the person in trust for the Federal Government; and (b) not subject to attachment in respect of any debt or liability of the person.
(2) In the event of the liquidation or bankruptcy of a person who has collected or deducted tax from a payment under Division III of this Part or the person in liquidation or bankruptcy and the Commissioner shall have a first claim for that amount before any distribution of property is made.
(3) Every amount that a person is required to deduct from a payment under Division III of this Part or Chapter XII shall be –
(a) a first charge on the payment; and (b) deducted prior to any other amount that the person may be required to deduct from the payment by virtue of an order of any Court or under any other law.
Amendment history (5)
- Inserted by the Finance Act, 2003.
- Inserted by the Finance Act, 2002.
- The words “tax under Division II of this Part” omitted by the Finance Act, 2003.
- Substituted for the words, figure and comma “Division II, Division III” by the Finance Act, 2003.
- Inserted by the Finance Act, 2018.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 356
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.