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. No Gross Amount of Bill Tax 1 Upto Rs. 500 Rs. 0 2 Exceeds Rs. 500 but does not exceed Rs. 20,000 10% of the amount 3 Exceeds 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.
