Section 72 of Income Tax Ordinance, 2001 has explained the treatment of tax on cessation of source of income.
The Federal Board of Revenue (FBR) issued theIncome Tax Ordinance, 2001updated up to June 30, 2021. TheOrdinanceincorporated amendments brought throughFinance Act, 2021.
Following is the text of Section 72 of the Income Tax Ordinance, 2001:
72. Cessation of source of income.— Where —
(a) any income is derived by a person in a tax year from any business, activity, investment or other source that has ceased either before the commencement of the year or during the year; and
(b) if the income had been derived before the business, activity, investment or other source ceased it would have been chargeable to tax under this Ordinance,
this Ordinance shall apply to the income on the basis that the business, activity, investment or other source had not ceased at the time the income was derived.
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