Karachi June 9 2023: Super tax is likely to continue in the upcoming fiscal year and bonus to be taxed, according to proposed finance bill 2023-24.
“Rationalization of Super Tax under section 4C to apply on all persons across the board on income above Rs. 150 (m): insertion of additional three new income slabs of Rs. 350(m) to Rs. 400(m), Rs. 400(m) to Rs. 500(m) and Rs. 500(m) above to be taxed at 6%, 8% and 10% respectively” according to proposed finance bill 2023-24.
The finance bill proposes re-imposition of 10% final withholding tax on issuance of bonus shares by a company and 20% for non-ATL (Active Taxpayer list).
“Notwithstanding anything contained in any law for the time being in force, every company, issuing bonus shares to the shareholders of the company, shall withhold ten percent of the bonus shares to be issued” states the finance bill.
Collection of tax on bonus shares is the responsibility of the company.
Bonus shares withheld under new bill shall only be issued to a shareholder, if the company collects from the shareholder, tax equal to ten percent of the value of the bonus shares issued to the shareholder including bonus share withheld, determined on the basis of day-end price on the first day of closure of books in the case of listed company and the value as prescribed in case of other companies.
Tax under new finance bill imposed on bonus issue shall be deposited by the company, within fifteen days of closure of books, whether or not tax has been collected by the company. A company liable to deposit tax under this section shall be entitled to collect and recover the tax deposited from the shareholder, on whose behalf
the tax has been deposited, before the issuance of bonus shares.
If a shareholder neither makes payment of tax to the company nor collects its bonus shares, within fifteen days of the date of issuance of bonus shares, the company may proceed to dispose of its bonus shares to the extent it has paid tax on its behalf under this section.
Issuance of bonus shares shall be deemed to be the income of the shareholder and the tax collected by a company under this section or proceeds of the bonus shares disposed of and paid under this section shall be treated to have been paid on behalf of the shareholder.
Tax paid under newly introduced bonus issuance section shall be final tax on the income of the shareholder of the company arising from issuing of bonus shares.
