ISLAMABAD: A time period for setting up transmission line projects has been extended for four years up to June 30, 2022 in order to allow 10-year tax exemption on profit and gains derived by a taxpayer from such projects.
The amendment has been made to clause 126M of Second Schedule to Income Tax Ordinance, 2001 through Tax Laws (Amendment) Ordinance, 2021.
Earlier, income tax exemption was granted to those projects which were set up on or after June 30, 2018. However, with the amendment the time for setting up projects has been extended up to June 30, 2022.
The text of the clause is:
“(126M) Profits and gains derived by a taxpayer from a transmission line project set up in Pakistan on or after the1st day of July, 2015 for a period of ten years. The exemption under this clause shall apply to such project which is—
(a) owned and managed by a company formed for operating the said project and registered under the Companies Ordinance, 1984 (XLVII of1984), and having its registered office in Pakistan;
(b) not formed by the splitting up, or the reconstruction or reconstitution, of a business already in existence or by transfer to a new business of any machinery or plant used in a business which was being carried on in Pakistan at any time before the commencement of the new business; and
(c) owned by a company fifty per cent of whose shares are not held by the Federal Government or Provincial Government or a Local Government or which is not controlled by the Federal Government or a Provincial Government or a Local Government.