Section 45 of the Income Tax Ordinance, 2001 ensures tax exemption on award, medal, or monetary allowances granted by the President of Pakistan.
Issued by the Federal Board of Revenue (FBR) and updated up to June 30, 2021, this section exemplifies the nation’s commitment to acknowledging outstanding contributions by individuals, granting them financial relief from taxation.
The text of Section 45 of the Income Tax Ordinance, 2001 is explicit in its intent:
“45. President’s honours.— (1) Any allowance attached to any Honour, Award, or Medal awarded to a person by the President of Pakistan shall be exempt from tax under this Ordinance.
(2) Any monetary award granted to a person by the President of Pakistan shall be exempt from tax under this Ordinance.”
This provision ensures that any monetary allowance attached to Honours, Awards, or Medals awarded by the President of Pakistan is exempt from taxation under the Income Tax Ordinance, 2001. Furthermore, any monetary award granted by the President also enjoys tax exemption.
The Finance Act, 2021, which introduced amendments to the Income Tax Ordinance, 2001, did not alter the fundamental provision of Section 45. This underscores the continuity of the tax relief granted to individuals honored by the President.
The disclaimer accompanying the text of Section 45 emphasizes the informative nature of the information and clarifies that the team is committed to providing accurate versions of the text while not assuming responsibility for errors or omissions.
This tax exemption is significant as it aligns with the broader recognition of individuals who have made exceptional contributions to society, whether in the fields of science, arts, sports, or public service. By exempting the associated allowances and monetary awards from taxation, the legislation encourages and appreciates the outstanding achievements of individuals honored by the President.
Tax experts applaud Section 45 for its role in fostering a culture that values and acknowledges outstanding contributions. By providing financial relief through tax exemption, the provision aims to further incentivize excellence and exceptional achievements across various domains.
Section 45 of the Income Tax Ordinance, 2001 reflects a national commitment to recognizing and appreciating outstanding contributions. By granting tax exemption on awards, medals, and monetary allowances conferred by the President of Pakistan, the provision sends a positive message to individuals who strive for excellence in their respective fields. This tax relief not only acknowledges the efforts of the honorees but also contributes to a culture that values and celebrates exceptional achievements, reinforcing the nation’s commitment to promoting excellence in diverse fields.
