Lahore 22°C
Brokerage and Commission
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(1) Where any payment on account of brokerage or commission is made by the Federal Government, a Provincial Government, a Local Government , a company or an association of person or individual having turnover of hundred million rupees or more (hereinafter called the principal) to a person (hereinafter called the agent), the principal shall deduct advance tax at the rate specified in Division II of Part IV of the First Schedule from such payment.
(2) If the agent retains Commission or brokerage from any amount remitted by him to the principal, he shall be deemed to have been paid the commission or brokerage by the principal and the principal shall collect advance tax from the agent.
(2A) Notwithstanding the provisions of sub-section (1), where the principal is making payment on account of commission to an advertising agent, directly or through electronic or print media, the principal shall deduct tax (in addition to tax required to be deducted under clause (b) of sub-section (1) of section 153 on advertising services excluding commission), at the rate specified in Division II of Part IV of the First Schedule on the amount equal to- A x 15 Where A = amount paid or to be paid to electronic or print media for advertising services (excluding commission) on which tax is deductible under clause (b) of sub-section (I) of section 153.
(2B) Tax deducted under sub-section (2A) shall be minimum tax on the income of the advertising agent.
(3) Where any tax is required to be collected from a person under sub- section (1), such tax shall be the minimum tax on the income of such persons. Explanation.— For the removal of doubt, it is explained that the income of person referred to in sub-sections
(2B) and (3) means the amount on which tax is deductible under sub-sections
(1) or (2A) of this section.
(2) If the agent retains Commission or brokerage from any amount remitted by him to the principal, he shall be deemed to have been paid the commission or brokerage by the principal and the principal shall collect advance tax from the agent.
(2A) Notwithstanding the provisions of sub-section (1), where the principal is making payment on account of commission to an advertising agent, directly or through electronic or print media, the principal shall deduct tax (in addition to tax required to be deducted under clause (b) of sub-section (1) of section 153 on advertising services excluding commission), at the rate specified in Division II of Part IV of the First Schedule on the amount equal to- A x 15 Where A = amount paid or to be paid to electronic or print media for advertising services (excluding commission) on which tax is deductible under clause (b) of sub-section (I) of section 153.
(2B) Tax deducted under sub-section (2A) shall be minimum tax on the income of the advertising agent.
(3) Where any tax is required to be collected from a person under sub- section (1), such tax shall be the minimum tax on the income of such persons. Explanation.— For the removal of doubt, it is explained that the income of person referred to in sub-sections
(2B) and (3) means the amount on which tax is deductible under sub-sections
(1) or (2A) of this section.
Amendment history (5)
- Section 233 substituted by the Finance Act, 2005. The substituted section 233
- The words “local authority” substituted by the Finance Act, 2008.
- The word “resident” omitted by the Finance Act, 2006.
- Inserted by the Finance Act, 2010.
- Inserted by the Finance Act, 2017.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 476
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.