Income tax law describes apportionment of deductions

Income tax law describes apportionment of deductions

Section 67 of Income Tax Ordinance, 2001 has described the apportionment of expenditure for tax calculation.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.  

Following is the text of Section 67 of the Income Tax Ordinance, 2001:

67. Apportionment of deductions.— (1) Subject to this Ordinance, where an expenditure “expenditures, deductions and allowances” relates to –

(a) the derivation of more than one head of income; or

(ab) derivation of income comprising of taxable income and any class of income to which sub-sections (4) and (5) of section 4 apply, or;

(b) the derivation of income chargeable to tax under a head of income and to some other purpose,

the expenditure “expenditures, deductions and allowances” shall be apportioned on any reasonable basis taking account of the relative nature and size of the activities to which the amount relates.

(2) The Board may make rules under section 237 for the purposes of apportioning deductions  “expenditures and allowances

(Disclaimer: The text of above section is only for information. Team makes all efforts to provide the correct version of the text. However, the team is not responsible for any error or omission.)

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