The Income Tax Ordinance, 2001
Recovery of tax from persons holding money on behalf
of a taxpayer.-
For the purpose of recovering any tax due by a taxpayer,
the Commissioner may, by notice, in writing, require any person –
owing or who may
owe money to the taxpayer; or
holding or who may hold money for, or on account of the
holding or who may hold money on account of some other
person for payment to the taxpayer; or
having authority of some other person to pay money to the
to pay to the Commissioner so much of the money as
set out in the notice by the date set out in the notice.
Subject to sub-section (3), the amount set out in a notice
under sub-section (1) –
where the amount of the money is equal to or less than the
amount of tax due by the taxpayer, shall not exceed the amount of the money; or
in any other case, shall be so much of the money as is
sufficient to pay the amount of tax due by the taxpayer.
Where a person is liable to make a series of payments (such
as salary) to a taxpayer, a notice under sub-section (1) may specify an amount
to be paid out of each payment until the amount of tax due by the taxpayer has
The date for payment specified in a notice under
sub-section (1) shall not be a date before the money becomes payable to the
taxpayer or held on the taxpayer’s behalf.
The provisions of sections 160, 161, 162 and 163, so far as
may be, shall apply to an amount due under this section as if the amount were
required to be deducted from a payment under Division III of Part V of this
Any person who has paid any amount in compliance with a
notice under sub-section (1) shall be treated as having paid such amount under
the authority of the taxpayer and the receipt of the Commissioner constitutes a
good and sufficient discharge of the liability of such person to the taxpayer to
the extent of the amount referred to in such receipt.
Sub-Sections (7), (8) and (9) omitted by Finance Act, 2003 which previously read as follows :
Where an amount has been paid under sub-section (1), the
taxpayer shall be allowed a tax credit for the amount (unless the amount paid
represents a final tax on the taxpayer’s income) in computing the tax due by
the taxpayer on the taxpayer’s taxable income for the tax year in which the
amount was paid.
The tax credit allowed under this section shall be applied
in accordance with sub-section (3) of section 4.
A tax credit or part of a tax credit allowed under this
section for a tax year that is not able to be credited under sub-section (3) of
section 4 for the year must be refunded to the taxpayer in accordance with
In this section, "person" includes any Court,
Tribunal or any other authority.