Understanding who is considered a “person” under Pakistan’s Income Tax Ordinance, 2001 is crucial for taxpayers, businesses, and legal entities. Section 80 of the Ordinance provides a detailed definition, covering everyone from individuals to companies and even governments. Below is an interactive breakdown to help you easily identify where you or your organization fit.
🔍 Why Does the Definition of “Person” Matter?
In Pakistan’s tax system, tax liability, filing requirements, exemptions, and compliance rules depend on whether an entity qualifies as a “person.”
This definition is the foundation for all tax treatment.
👤 Who Is a “Person” Under Section 80?
Section 80(1) states that the following are treated as persons:
1️⃣ Individuals
Any single human being — salaried, businessperson, freelancer, student earning income, etc.
2️⃣ Companies & Associations of Persons (AOP)
Any company, partnership, firm, or group formed in Pakistan or abroad.
3️⃣ Government & International Bodies
This includes:
• Federal Government
• Any foreign government
• Political subdivisions of foreign governments
• Public international organizations (e.g., UN agencies)
📘 Detailed Breakdown of Key Terms Under Section 80(2)
Now let’s explore what each category includes.
👥 Association of Persons (AOP)
Includes:
✔ Firm
✔ Hindu Undivided Family
✔ Any artificial juridical person
✔ Any body of persons formed under foreign law
❌ Does NOT include a company
Example: Partners running a shop together.
🏢 Company
A very broad term under Section 80. A “company” includes:
✔ A company defined in the Companies Act, 2017
✔ Any body corporate in Pakistan
✔ Modaraba
✔ Foreign-incorporated bodies
✔ Co-operative societies & finance societies
✔ Non-profit organizations
✔ Trusts formed under any law
✔ Foreign associations declared as companies by FBR
✔ Provincial Government
✔ Local Government
✔ Small Company (as per section 2)
Example: Multinational corporations, NGOs, societies, government bodies, modarabas.
🤝 Firm
A relationship between persons (partners) who agree to share business profits.
Example: A partnership running a restaurant.
🧾 Trust
A legal obligation tied to property ownership, created for the benefit of another person. Includes unit trusts.
📦 Unit Trust
A trust where beneficiaries’ shares are divided into units, similar to mutual fund units.
📌 Quick Summary
| Category | Who It Includes | Key Examples |
| Individual | Single person | Salaried worker, freelancer |
| Company | Corporations, NGOs, trusts, govt bodies | Pvt Ltd, Modaraba, Local Govt |
| AOP | Group of persons other than companies | Partnership firm |
| Firm | Persons sharing business profit | Law firm, consulting firm |
| Trust | Property held for beneficiaries | Family trust |
| Unit Trust | Trust with unit-based entitlement | Mutual fund-type structures |
💡 Why This Matters for Taxpayers
• Determines filing requirements
• Influences tax rates
• Affects withholding obligations
• Impacts audit and compliance rules
• Defines eligibility for exemptions or incentives
Whether you are an individual, business, NGO, or government body, Section 80 ensures you are correctly identified for tax purposes.
⚠ Disclaimer
This article is for general informational purposes only and does not constitute legal or tax advice. For specific guidance on income tax matters, consult a qualified tax professional or the Federal Board of Revenue (FBR).