Amendments through Finance Act, 2020
Federal Board of Revenue (FBR) updated rate of income tax on vehicles used for both passenger and goods transportation for tax year 2021 (July 01, 2020 to June 30, 2021).
The FBR issued Income Tax Ordinance, 2001 (Updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.
The FBR updated rate of income tax on motor vehicles under Section 234 of Income Tax Ordinance, 2001:
Rates of Income Tax Under Section 234
Rates of collection of tax under section 234,—
(1) In case of goods transport vehicles, tax of two rupees and fifty paisa per kilogram of the laden weight shall be charged.
(1A) In the case of goods transport vehicles with laden weight of 8120 kilograms or more, advance tax after a period of ten years from the date of first registration of vehicle in Pakistan shall be collected at the rate of twelve hundred rupees per annum;
(2) In the case of passenger transport vehicles plying for hire with registered seating capacity of—
| S.No. | Capacity | Rs per seat per annum |
| (i) | Four or more persons but less than ten persons. | 50 |
| (ii) | Ten or more persons but less than twenty persons. | 100 |
| (iii) | Twenty persons or more. | 300 |
(3) In case of other private motor vehicles shall be as set out in the following Table, namely:-
| S. No. | Engine capacity | Tax |
| (1) | (2) | (3) |
| 1. | upto 1000cc | Rs. 800 |
| 2. | 1001cc to 1199cc | Rs. 1,500 |
| 3. | 1200cc to 1299cc | Rs. 1,750 |
| 4. | 1300cc to 1499cc | Rs. 2,500 |
| 5. | 1500cc to 1599cc | Rs. 3,750 |
| 6. | 1600cc to 1999cc | Rs. 4,500 |
| 7. | 2000cc & above | Rs. 10,000 |
(4) where the motor vehicle tax is collected in lump sum,
| S. No. | Engine capacity | Tax |
| (1) | (2) | (3) |
| 1. | upto 1000cc | Rs. 10,000 |
| 2. | 1001cc to 1199cc | Rs. 18,000 |
| 3. | 1200cc to 1299cc | Rs. 20,000 |
| 4. | 1300cc to 1499cc | Rs. 30,000 |
| 5. | 1500cc to 1599cc | Rs. 45,000 |
| 6. | 1600cc to 1999cc | Rs. 60,000 |
| 7. | 2000cc & above | Rs. 120,000 |
Explanation of Section 234
Following is Section 234 of Income Tax ordinance, 2001
Tax on motor vehicles— (1) Any person at the time of collecting motor vehicle tax shall also collect advance tax at the rates specified in Division III of Part IV of the First Schedule.
(2) If the motor vehicle tax is collected in instalments or lump sum the advance tax may also be collected in instalments or lump sum in like manner.
(2A) In respect of motor cars used for more than ten years in Pakistan, no advance tax shall be collected after a period of ten years.
(3) In respect of a passenger transport vehicle with registered seating capacity of ten or more persons, advance tax shall not be collected after a period of ten years from the first day of July of the year of make of the vehicle.
(4) In respect of a goods transport vehicle with registered laden weight of less than 8120 kilograms, advance tax shall not be collected after a period of ten years from the date of first registration of vehicle in Pakistan.
(5) Advance tax collected under this section shall be adjustable.
Section 231B
(6) For the purpose of sub-sections (1) and (2) “motor vehicle” shall include the vehicles specified in sub-section (7) of section 231B.
