What is section 99A tax through electricity connections, and is the old Rs. 3,000 to Rs. 10,000 fixed tax still charged?

Section 99A is the part of the Income Tax Ordinance, 2001 that allows income tax to be collected from smaller shopkeepers through the commercial electricity bill of their shop. It does not fix the amount itself. The amount, the dates and who is covered are left to an income tax general order, which is not part of the law held on this site.

What does section 99A say now?

Section 99A was substituted by the Tax Laws (Amendment) Act, 2023, and that Act says the substitution is deemed to have taken effect from 1 July 2022. As printed in the Ordinance amended to 30 June 2026, it has four sub-sections:

Sub-section	What it does
(1)	A tax is charged and collected from retailers other than Tier-I retailers, and from specified service providers, on commercial electricity connections, at the rates specified in the income tax general order
(2)	The Federal Government, or the Board with the approval of the Minister in-charge, following approval of the Economic Coordination Committee of the Cabinet, may issue that general order
(3)	Section 235(1) still applies to the persons it covers, unless the general order specifically exempts them
(4)	Section 100BA and rule 1 of the Tenth Schedule (the higher rates for people not on the Active Taxpayers’ List) do not apply to 99A tax unless the general order says so

The general order under sub-section (2) can deal with scope, time, payment, recovery, penalty, default surcharge, adjustment or refund. It can set the tax on the amount of the bill “or on any basis of consumption”, in addition to or in lieu of the section 235 advance tax, at such rates or amounts as it specifies. It can also provide for record keeping and returns, include or exempt classes of persons, and decide whether the tax is adjustable, final or minimum.

Is the old Rs. 3,000 to Rs. 10,000 fixed tax still charged?

Not under the Ordinance itself. That table was clause (3) of Division IV, Part IV of the First Schedule, inserted by the Finance Act, 2022. According to the footnote in the consolidated text, it read:

Gross amount of monthly bill	Tax under the omitted table
Does not exceed Rs. 30,000	Rs. 3,000
Exceeds Rs. 30,000 but does not exceed Rs. 50,000	Rs. 5,000
Exceeds Rs. 50,000 but does not exceed Rs. 100,000	Rs. 10,000
Retailers and service providers notified by the Board in the general order	Up to Rs. 200,000

Section 3 of the Tax Laws (Amendment) Act, 2023 omitted clause (3) of Division IV. The footnote records that it had first been omitted by the Tax Laws (Second Amendment) Ordinance, 2022, dated 22 August 2022. The same Act omitted section 235(1A), the sub-section that had collected this tax “in addition to” normal electricity advance tax.

So today the Ordinance contains no fixed rupee amount for section 99A. Whether a general order has set amounts, and what they are, cannot be answered from the text held here.

How does the normal electricity tax interact with it?

Section 235(1) collects advance tax “at the rates specified in Division IV of Part-IV of the First Schedule on the amount of electricity bill of a commercial or industrial” consumer. Clause (1) of Division IV sets these rates on the gross bill:

Gross amount of bill	Tax
Up to Rs. 500	Rs. 0
Exceeds Rs. 500 but does not exceed Rs. 20,000	10% of the amount
Exceeds Rs. 20,000	Rs. 1,950 plus 12% of the amount exceeding Rs. 20,000 for commercial consumers (5% for industrial consumers)

Section 99A(3) keeps this tax running for shops unless the general order exempts them. Section 99A(2)(b) lets the general order collect 99A tax in addition to, or instead of, this amount.

Worked example (illustrative figures)

Rashid runs a garments shop in Saddar, Rawalpindi. He is not a Tier-1 retailer. His commercial electricity bill for one month is Rs. 40,000 (an invented figure).

Section 235 tax under Division IV, clause (1):

1. The bill exceeds Rs. 20,000, so the third row applies.
2. Amount above Rs. 20,000: Rs. 40,000 minus Rs. 20,000 = Rs. 20,000.
3. 12% of Rs. 20,000 = Rs. 2,400.
4. Tax = Rs. 1,950 + Rs. 2,400 = Rs. 4,350.

Section 99A tax: the rate is whatever the general order specifies for his class of retailer, which is not held here, so no figure can be given.

For comparison only: under the omitted clause (3) table, a Rs. 40,000 bill fell in the Rs. 30,000 to Rs. 50,000 band, which carried Rs. 5,000. That table no longer forms part of the Ordinance.

What if my shop is a Tier-1 retailer?

Section 99A(1) excludes Tier-I retailers as defined in the Sales Tax Act, 1990. A Tier-1 shop still faces section 235 on its commercial bill, but not the 99A collection. Whether a shop is Tier-1 depends on clause (43A) of section 2 of the Sales Tax Act.

What if I also pay sales tax through the electricity bill?

The earlier 2022 version of section 99A had a sub-section saying a retailer who paid sales tax through the electricity bill under the Sales Tax Act need not pay 99A tax. That sub-section is not in the current text. The current section 99A leaves adjustment and exemption to the general order.

Common mistakes

• Treating Rs. 3,000, Rs. 5,000 or Rs. 10,000 as the current law. Those figures are in the footnote of an omitted clause, not in the operative text.
• Assuming 99A tax replaces section 235 tax automatically. Section 99A(3) says section 235(1) still applies unless the general order specifically exempts the person.
• Assuming the non-filer double rate applies. Section 99A(4) switches off section 100BA and rule 1 of the Tenth Schedule for 99A tax, unless the general order provides otherwise.
• Assuming the tax is final. Whether it is adjustable, final or minimum is for the general order under section 99A(2)(f). Collection under section 235 has its own rules in section 235(4).

What to check in the official text

Read section 99A as printed within the section 99 entry of the Income Tax Ordinance amended to 30 June 2026, section 235, and Division IV of Part IV of the First Schedule with its footnotes. Section 3 of the Tax Laws (Amendment) Act, 2023 shows the substitution of section 99A and the omission of clause (3). The income tax general order issued under section 99A(2), which carries the actual rates and scope, is not held in this corpus and needs to be checked separately.