Tax Filers Can Save Taxes on Electricity Bills 2024

Being an active taxpayer in Pakistan can offer benefits on your electricity bill. Here’s a breakdown of the conditions for tax savings:

Who Qualifies:

  • Domestic Consumers: Only domestic electricity consumers who are registered on the Active Taxpayers’ List (ATL) are eligible for tax savings.

Who Doesn’t Qualify:

  • Non-filers (not registered on the ATL)
  • Commercial and industrial consumers (their tax treatment differs)

Tax Savings:

  • Advance Tax Exemption: Active filers are exempt from advance tax deduction on their electricity bills.
  • Minimum Tax Threshold: For non-filers, advance tax collected up to Rs. 360,000 per year on electricity bills is considered minimum tax and cannot be refunded.

Tax Adjustment:

  • Non-Filers: Advance tax collected above Rs. 30,000 per month on electricity bills might not be adjustable against final tax liability (depending on their overall income).
  • Filers: The advance tax deducted from their electricity bills is likely adjustable against their final tax liability.
    S. NoGross Amount of BillTax
    1Upto Rs. 500Rs. 0
    2Exceeds Rs. 500 but does not exceed Rs. 20,00010% of the amount
    3Exceeds Rs. 20,000
    Rs. 1950 plus 12% of the amount exceeding Rs.20,000 (Commercial Consumers)
    Rs. 1950 plus 5% of the amount exceeding Rs.20,000 (Industrial Consumers)

Current Tax Regime (for domestic non-filers):

  • A flat 7.5% withholding tax applies to the entire monthly bill if the amount exceeds Rs. 25,000.

Key Takeaways:

  • Being an active tax filer offers an exemption from advance tax deduction on your domestic electricity bill.
  • Non-filers face a higher tax burden on their electricity bills and may have limited tax adjustment options.

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