Tag: Income Tax Ordinance 2001

Section 47 of the Income Tax Ordinance, 2001 has been designed to exempt the cost incurred on scholarships. The Federal Board of Revenue (FBR) recently updated the Income Tax Ordinance, 2001 up to June 30, 2021, incorporating amendments introduced through the Finance Act, 2021.

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Section 46 of the Income Tax Ordinance, 2001, has been brought to the forefront as it grants tax exemption to non-resident persons on profit earned from securities issued by resident entities.

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Section 45 of the Income Tax Ordinance, 2001 ensures tax exemption on award, medal, or monetary allowances granted by the President of Pakistan.

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Section 44 of Income Tax Ordinance, 2001 has granted exemption under international tax treaties.

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 44 of the Income Tax Ordinance, 2001:

44. Exemptions under international agreements.— (1) Any Pakistan-source income which Pakistan is not permitted to tax under a tax treaty shall be exempt from tax under this Ordinance.

(2) Any salary received by an individual (not being a citizen of Pakistan) shall be exempt from tax under this Ordinance to the extent provided for in an Aid Agreement between the Federal Government and a foreign government or public international organization, where –

(a) the individual is either not a resident individual or a resident individual solely by reason of the performance of services under the Aid Agreement;

(b) if the Aid Agreement is with a foreign country, the individual is a citizen of that country; and

(c) the salary is paid by the foreign government or public international organisation out of funds or grants released as aid to Pakistan in pursuance of such Agreement.

(3) Any income received by a person (not being a citizen of Pakistan) engaged as a contractor, consultant, or expert on a project in Pakistan shall be exempt from tax under this Ordinance to the extent provided for in a bilateral or multilateral technical assistance agreement between the Federal Government and a foreign government or public international organisation, where —

(a) the project is financed out of grant funds in accordance with the agreement;

(b) the person is either a non-resident person or a resident person solely by reason of the performance of services under the agreement; and

(c) the income is paid out of the funds of the grant in pursuance of the agreement.

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

Section 43 of the Income Tax Ordinance, 2001 provides a tax exemption on the income earned by employees of foreign governments.

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Section 42 of the Income Tax Ordinance, 2001 provides tax exemption on income of the diplomatic and United Nations (UN) personnel serving in Pakistan.

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Section 41 of Income Tax Ordinance, 2001 has exempted the agriculture income derived by a person.

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In a move to enhance tax compliance and broaden the tax base, the Federal Board of Revenue (FBR) has introduced an advance tax of 5 percent on individuals paying education fees exceeding Rs200,000 per annum during the tax year 2021/2022.

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The Federal Board of Revenue (FBR) has allowed adjustment against income from other sources under Section 40 of the Income Tax Ordinance, 2001.

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