Section 153 — Withholding on Goods, Services & Contracts

Section 153 obliges prescribed persons (companies, AOPs, government, charities, and other notified entities) to deduct income tax when paying for goods, services, or contracts above the de minimis threshold. Sub-types and filer rates: goods to a company 4.5%, goods to an individual/AOP 5.5%, services 11%, specified services 4%, transport services 3%, electronic/print media advertising 1.5%, contracts 7.5%. Non-filer rates double.

Section 153 deductions are minimum tax for most categories — the prescribed person must deduct, but the recipient ultimately pays the higher of the WHT collected or their slab-based liability. Services WHT in particular is minimum tax; if your slab-based tax on the income exceeds the 11% WHT, you owe the top-up at year-end. Contract WHT may be final tax depending on sub-section.

For Pakistani SME owners and freelancers selling to corporate clients, Section 153 is the most-commonly-encountered WHT. The corporate client deducts 11% on services and remits the net. You receive a deduction certificate and claim it as advance tax in your IRIS return. Failing to claim it back is a common error — make sure every client-issued Section 153 certificate appears in your annual return.