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Glossary

Income Tax Withholding on Daraz Statements

Updated

Short Answer

Income tax withholding is a deduction on your weekly statement, separate from sales tax withholding. On real statements we saw about 1.6 to 1.7 percent of item price. This is an observed estimate, not a legal rate. Check your own statement and FBR guidance.

Income tax withholding is the second tax line on a Daraz statement. Like sales tax withholding, it is taken from your payout and is not a Daraz fee.

What Did We Observe?

On the real weekly statements we looked at, the income tax withheld came to about 1.6 to 1.7 percent of item price. That is an observed estimate, not a legal rate, and your own figure may differ. Always check your own statement and FBR guidance. We do not give tax advice.

Worked Example

Example: Store A sells at Rs 2,000. At an observed 1.6 percent, income tax withheld is about Rs 32. Add the observed sales tax line of about 1.95 percent (Rs 39) and the two tax lines together take roughly Rs 71 from that order's payout.

Common Mistakes

  • Adding the two tax lines and calling the total one rate.
  • Forgetting that withheld tax is cash out of your payout even if you can account for it later.
  • Using a rate from another seller or an old post without checking your latest statement.

Sales tax, withholding tax, payout cycle. Read Daraz seller tax withholding for the broader context. To see what the two tax lines do to one order, use the profit calculator. If you run several stores, Seller's Revolution finance reports show the tax lines for each store together.

Questions

How much income tax does Daraz withhold from sellers?

On real weekly statements we saw about 1.6 to 1.7 percent of item price. It is an estimate, not a legal rate, so check your statement and FBR guidance.

Does withheld income tax count as my total tax?

We cannot advise on that. It is a tax question, so ask your accountant or read FBR guidance.

Is it charged on shipping?

We have not seen the withholding applied to buyer-paid shipping. It was calculated on item price on the statements we checked.

Sources

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