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INCOME TAX ORDINANCE, 1979

ORDINANCE NO. XXXI OF 1979


AN
ORDINANCE
to consolidate and amend the law relating to income-tax and super-tax
WHEREAS it is expedient to consolidate and amend the law relating to income tax and super tax
for the purposes hereinafter appearing;
AND WHEREAS the President is satisfied that circumstances exist which render it necessar to
ta!e immediate action;
N"W# $HERE%"RE# in pursuance of the Proclamation of the fifth da of &ul# '()) read with the
*aws +,ontinuance in %orce- "rder# '()) +,.*A "rder No/' of '())-# and in exercise of all powers
ena0ling him in that 0ehalf# the President is pleased to ma!e and promulgate the following "rdinance1-
CHAPTER I
PRELIMINARY
1. Short title, extet !" #o$$e#e$et/ +'- $his "rdinance ma 0e called the 2ncome $ax "rdinance#
'()(/
+3- 2t extends to the whole of Pa!istan/
+4- 2t shall come into force on the first da of &ul# '()(/
%. De&iitio'/-2n this "rdinance# unless the context otherwise re5uires#-
+'- 6Agricultural income6 means-
+a- an rent or re7enue deri7ed from land which is situated in Pa!istan and is used for
agricultural purposes;
+0- an income deri7ed from such land 0-
+i- agriculture; or
+ii- the performance 0 a culti7ator or recei7er of rent-in-!ind of an process ordinaril
emploed 0 a culti7ator or recei7er of rent-in-!ind to render the produce raised or
recei7ed 0 him fit to 0e ta!en to mar!et; or
1
+iii- the sale 0 a culti7ator or recei7er of rent-in-!ind of the produce raised or recei7ed
0 him# in respect of which no process has 0een performed other than a process of
the nature descri0ed in paragraph +ii-;
+c- an income deri7ed from an 0uilding owned and occupied 0 the recei7er of the rent or
re7enue of an such land# or occupied 0 the culti7ator# or the recei7er of rent-in-!ind# of
an land with respect to which# or the produce of which# an operation mentioned in
paragraphs +ii- and +iii- of su0-clause +0- is carried on1
Pro7ided that the 0uilding is on# or in the immediate 7icinit of# the land# and is a 0uilding
which the recei7er of the rent or re7enue or the culti7ator# or the recei7er of the rent-in-!ind
0 reason of his connection with the land# re5uires as a dwelling-house# or as a store-house#
or other out-0uilding;
+3- 6Appellate
'
8Additional ,ommissioner96 means a person appointed to 0e an Appellate Additional
,ommissioner of 2ncome $ax under section :;
+4- 6Appellate $ri0unal6 means the Appellate $ri0unal constituted under section '44;
+:- 6appro7ed gratuit fund6 means a gratuit fund which has 0een# and continues to 0e# appro7ed 0 the
,ommissioner in accordance with the rules contained in Part 222 of the Sixth Schedule;
+;- 6appro7ed superannuation fund6 means a superannuation fund# or an part of a superannuation fund#
which has 0een# and continues to 0e# appro7ed 0 the ,ommissioner in accordance with the rules
contained in Part 22 of the Sixth Schedule;
+<- 6assessee6 means a person 0 whom an tax or an other sum of mone is paa0le under this
"rdinance# and includes-
+a- e7er person in respect of whom an proceeding under this "rdinance has 0een ta!en for
the assessment of his income or the income of an other person in respect of which he is
assessa0le or of the amount of refund due to him or to such other person;
+0- e7er person who is re5uired to file a return of total income under section ;;# section )3 or
section ='; and
+c- e7er person who is deemed to 0e an assessee# or an assessee in default# under an
pro7ision of this "rdinance;
+)- 6assessment6 includes re-assessment and additional assessment and the cognate expressions shall 0e
construed accordingl;
+=- 6assessment ear6 means the period of twel7e months 0eginning on the first da of &ul next
following the income ear and includes an such period which is deemed# under an pro7ision of this
"rdinance# to 0e the assessment ear in respect of an income or an income ear;
'
Su0s/ for >Asistant ,ommissioner? 0 %/A/ '((4/
2
+(- 6a7erage rate of tax6 means the rate arri7ed at 0 di7iding the amount of tax calculated on the total
income 0 such income;
+'@- 60an!ing compan6 has the same meaning as in the Aan!ing ,ompanies "rdinance# '(<3 +*B22 of
'(<3-# and includes an 0od corporate formed 0# or under# an law for the time 0eing in force which
transacts the 0usiness of 0an!ing in Pa!istan;
+''- 60usiness6 includes an# trade# commerce or manufacture# or an ad7enture or concern in the
nature of trade# commerce or manufacture;
(1%) *#!+it!l !''et* $e!' +ro+ert, o& !, -i" hel" ., ! !''e''ee, /hether or ot #oe#te"
/ith hi' .0'ie'' or +ro&e''io, .0t "oe' ot i#l0"e1
(i) !, 'to#-1i1tr!"e (ot .ei2 'to#-' !" 'h!re'), #o'0$!.le 'tore' or r!/ $!teri!l'
hel" &or the +0r+o'e' o& hi' .0'ie'' or +ro&e''io3
+ii- personal effects# that is to sa# mo7a0le propert +including wearing apparel# Ceweller and
furniture- held for personal use 0 the assessee or an mem0er of his famil dependent on
him; and

+iii- an land from which the income deri7ed 0 the assessee is agricultural income;
+'4- 6,entral Aoard of Re7enue6 means the ,entral Aoard of Re7enue constituted under the ,entral
Aoard of Re7enue Act# '(3: +2B- of +'(3:-;
+':- 6charita0le purpose6 includes relief of the poor# education# medical relief and the ad7ancement of
an other o0Cect of general pu0lic utilit;
+';- 6,ommissioner6 means a person appointed to 0e a ,ommissioner of 2ncome $ax under section :
8and includes a Director of $ax Withholding and a Director of 2ntelligence and 2n7estigation9;
'
8+'<- 6compan6 means-
+a- compan as defined in the ,ompanies Act# '('4 +B22 of '('4-; or
+0- a 0od corporate formed 0 or under an law for the time 0eing in force; or
3
8+00- a trust formed 0 or under an law for the time 0eing in force; or9
+c- a 0od corporate incorporated 0 or under the law of a countr outside Pa!istan relating to
incorporation of companies; or
4
8+cc- a modara0a as defined in the .odara0a ,ompanies and .odara0as +%loatation and
,ontrol- "rdinance# '(=@ +DDD2 of '(=@-;
+d- the Eo7ernment of a Pro7ince;
'
,l/ +'<- su0s/ 0 %/ "/ '(=@/
3
Su0-cl/+00- ins/0 %/ "/ '(=4/
4
Su0-cl/ +cc- ins/ 0 %/ A/ '((3/
3
+e- a foreign association# whether incorporated or not which the ,entral Aoard of Re7enue ma#
0e general or special order# declare to 0e compan for the purposes of this "rdinance for
such assessment ear or ears +whether commencing 0efore# on or after the first da of
&ul# '()(- as ma 0e specified in the said order;9
+')- 6co-operati7e societ6 means a co-operati7e societ registered under the ,o-operati7e Societies Act#
'('3 +D2 of '('3- or under an other law for the time 0eing in force in Pa!istan for the registration of co-
operati7e societies;
'
8+')A- 6Deput ,ommissioner6 means a person appointed to 0e a Deput ,ommissioner of 2ncome $ax
under section : and includes an 2ncome $ax "fficer# a Special "fficer98 # a Deput Director of $ax
Withholding# an Assistant Director of $ax Withholding# a Deput Director of 2ntelligence and
2n7estigation# an Assistant Director of 2ntelligence and 2n7estigation9 and a $ax Reco7er "fficer;
+'=- 6director6 and 6manager6# in relation to a compan# ha7e the meaning assigned to them in the
,ompanies Act# '('4 +B22 of '('4-;
3
8+'(- 6Director-Eeneral of 2ntelligence and 2n7estigation means a person appointed to 0e a Director-
Eeneral of 2ntelligence and 2n7estigation under section :; 9
4
8+'(A- 6Director-Eeneral of $raining and Research6 means a person appointed to 0e a Director-Eeneral
of 2ntelligence and 2n7estigation under section :# and includes a person appointed to 0e Director of
$raining and Research# an Additional Director of $raining and Research# a Deput Director of $raining
and Research# an Assistant Director of $raining and Research or an other officer# howsoe7er designated#
appointed 0 the ,entral Aoard of Re7enue for the purposes of an or all functions performed 0 Director-
Eeneral of $raining and Research and an other function that ma 0e assigned to him;9
(%4) *"i5i"e"* i#l0"e'1
(!) !, "i'tri.0tio ., ! #o$+!, o& !##0$0l!te" +ro&it' to it' 'h!rehol"er'
6
7or
$o"!r!.! #erti&i#!te hol"er'8, /hether #!+it!li'e" or ot, i& '0#h "i'tri.0tio et!il'
the rele!'e ., the #o$+!, to it' 'h!re hol"er' o& !ll or !, +!rt o& the !''et' o& the
#o$+!,3
(.) !, "i'tri.0tio ., ! #o$+!,, to it' 'h!rehol"er'
1
7or $o"!r!.! #erti&i#!te hol"er'8,
o& "e.et0re', "e.et0re 'to#- or "e+o'it #erti&i#!te' i !, &or$, /hether /ith or
/itho0t itere't, !" !, "i'tri.0tio to it'
9
7 8'h!rehol"er' o& 'h!re' ., /!, o&
.o0'
:
7or .o0' 'h!re'8, to the extet to /hi#h the #o$+!, +o''e''e' !##0$0l!te"
+ro&it' /hether #!+it!li'e" or ot3
'
,l/+')A- ins/ 0 %/ A/ '((4/
3
,l/+'(- su0s/ 0 %/ A/ '((;/
4
,l/+'(A- ins/ i0id/
:
Words ins/ 0 %/ A/ '(/(3/
;
Word >preference? omitted 0 %/"/ 3@@'/
<
Words ins/ 0 %/"/ 3@@'/
4
+c- an distri0ution made to the shareholders
'
8or modara0a certificate holders9 of a compan
on its li5uidation# to the extent to which the distri0ution is attri0uta0le to the accumulated
profits of the compan immediatel 0efore its li5uidation# whether capitalised or not;
+d- an distri0ution 0 a compan to its shareholders
'
8or modara0a certificate holders9 on the
reduction of its capital# to the extent to which the compan possesses accumulated profits#
whether such accumulated profits ha7e 0een capitalised or not; and
+e- an pament 0 a pri7ate compan of an sum +whether as representing a part of the assets
of the compan or otherwise- 0 wa of ad7ance or loan to a shareholder or an pament
0 an such compan on 0ehalf# or for the indi7idual 0enefit# of an such shareholder# to
the extent to which the compan# in either case# possesses accumulated profits; 0ut does not
include-
+i- distri0ution made in accordance with su0-clause +c- or su0-clause +d- in respect of
an share for full cash consideration# or redemption of de0entures or de0enture-
stoc!# where the holder of the share or de0enture is not entitled in the e7ent of
li5uidation to participate in the surplus assets;
+ii- an ad7ance or loan made to a shareholder 0 a compan in the ordinar course of
its 0usiness# where the lending of mone is a su0stantial part of the 0usiness of the
compan;
+iii- an di7idend paid 0 a compan which is set off 0 the compan against the whole
or an part of an sum pre7iousl paid 0 it and treated as a di7idend within the
meaning of su0-clause +e-# to the extent to which it is so set off/
Explanation/- $he expression 6accumulated profits6#-
+a- where7er it occurs in this clause# includes an reser7e made up wholl or partl of an
allowance# deduction or exemption admissi0le under this "rdinance or the repealed Act#
0ut does not include capital gains arising 0efore the first da of April# '(:< or after the
thirt-first da of .arch# '(:( and 0efore the eighth da of &une# '(<4;
+0- as used in su0-clauses +a-# +0-# +d- and +e-# includes all profits of the compan up to the date
of such distri0ution or such pament# as the case ma 0e; and
+c- as used in su0-clause +c-# includes all profits of the compan up to the date of its
li5uidation/
+3'- 6domestic compan6 means a Pa!istani compan and includes an compan which# in respect of its
income lia0le to tax under this "rdinance had made the prescri0ed arrangements for the declaration and
pament# within Pa!istan# of the di7idends +including di7idends on preference shares- paa0le out of such
income and for the deduction of tax from such di7idends;
'
8+3'A-6finance societ6 includes a co-operati7e societ which accepts mone on deposit or otherwise for
the purpose of ad7ancing loans or ma!ing in7estments in the ordinar course of 0usiness;9
'
,l/+3'A- ins/ 0 %/ A/ '(('/
5
+33- 6firm6# 6partner6# and 6partnership6 ha7e the meanings respecti7el assigned to them in the
Partnership Act# '(43 +2D of '(43-; and the expression 6partner6 includes an person# who 0eing a minor#
has 0een admitted to the 0enefits of partnership;
+34- 6foreign compan6 means a compan which is not a domestic compan;
(%6) *i#o$e* i#l0"e'1
(!) !, i#o$e, +ro&it' or 2!i', &ro$ /h!te5er 'o0r#e "eri5e", #h!r2e!.le to t!x 0"er
!, +ro5i'io o& thi' Or"i!#e 0"er !, he!" '+e#i&ie" i 'e#tio 193
(.) !, lo'' o& '0#h i#o$e, +ro&it' or 2!i'3 7 8
(#) !, '0$ "ee$e" to .e i#o$e, or i#o$e !##r0i2 or !ri'i2 or re#ei5e" i P!-i't!
0"er !, +ro5i'io o& thi' Or"i!#e, .0t "oe' ot i#l0"e, i the #!'e o& ! 'h!rehol"er
o& ! "o$e'ti# #o$+!,, the !$o0t re+re'eti2 the &!#e 5!l0e o& !, .o0' 'h!re' or
the !$o0t o& !, .o0' "e#l!re", i''0e" or +!i" ., the #o$+!, to it' 'h!re1hol"er'
/ith ! 5ie/ to i#re!'i2 it' +!i"10+ 'h!re1#!+it!l3 7!"8

(") i the #!'e o& 'h!rehol"er o& ! "o$e'ti# #o$+!,, the !$o0t re+re'eti2 the &!#e 5!l0e o&
!, .o0' 'h!re' or the !$o0t o& !, .o0' "e#l!re", i''0e" or +!i" ., the #o$+!, to it'
'h!rehol"er' /ith ! 5ie/ to i#re!'i2 it' +!i"10+ 'h!re #!+it!l,
'
8 9
3
8 9
4
8+3;A- 62ncome $ax Panel6 means a panel comprising an 2nspecting
:
8Additional ,ommissioner9# as its
,hairman# and one or more
;
8Deput ,ommissioner9s/
+3<- 6income ear6# in relation to an assessment ear +hereafter in this clause# referred to as Fthe said
assessment earG-# means-
+a- the financial ear next preceding the said assessment ear# or
<
8+ -9
+c- such period as the ,entral Aoard of Re7enue ma# in the case of an person or class of
persons or an source of income# specif 0 notification in the official EaHette#
and includes an period which# under an pro7ision of this "rdinance# is deemed to 0e an income ear# or
in respect of which a return of total income is re5uired to 0e furnished# or an income is lia0le to 0e
determined or assessed# or an tax is paa0le/
'
Words omitted 0 %/"/ 3@@'/
3
,l/ +3;- omitted 0 %/ A/ '((4/
4
,l/ +3;A- ins/ 0 %/ A/ '(==/
:
Su0s/ for 6Assistant ,ommissioner? 0 %/ A/ '((4/
;
Su0s/ for 62ncome $ax "fficer6 0 %/ A/ '((4/
<
,l/ +0- omitted 0 %/ A/ '((;/
6
Explanation/-
+a- Where# in an case#-
'
8 9
8 9
3
8+iii- 0oth su0-clause +a- and su0-clause +c- appl# the income ear as specified under
clause +c- shall 0e deemed to 0e the income ear of the assessee in respect of his
income from all sources; and
+i7- the sources of income of an assessee include two or more sources in respect of
which income ears ha7e 0een specified under clause +c-# the income ear of the
said income ears ending last shall 0e deemed to 0e the income ear of the assessee
in respect of his income from all sources except the sources to which Iclause +c-
applies; and9
+0- as used in su0-clause +c-# 6period6 means an period of twel7e months# or an period of
more or less than twel7e months# and includes an such period as ma commence from# or
end on# an date# including a date falling 0efore the commencement# or after the end# as the
case ma 0e# of the financial ear next preceding the said assessment ear;
+3)- 62nspecting
4
8Additional ,ommissioner96 means a person appointed to 0e an 2nspecting
'
8Additional
,ommissioner9 of 2ncome $ax under section : 8and includes an Additional Director of $ax Withholding
and an Additional Director of 2ntelligence and 2n7estigation9;
+3=- 62nspector of 2ncome $ax6 means a person appointed to 0e an 2nspector of 2ncome $ax under section
: 8and includes an Auditor of $ax Withholding and an 2nspector of 2ntelligence and 2n7estigation9;
+3(- 6interest6 means interest paa0le in an manner in respect of an mone 0orrowed or de0t incurred
+including a deposit# claim or other similar right or o0ligation- and includes an ser7ice fee or other
charge in respect of the mone 0orrowed or de0t incurred or in respect of an credit facilit which has not
0een utilised;
:
8+3(A-6modara0a6# 6modara0a compan6 and 6.odara0a ,ertificate6 ha7e the meaning respecti7el
assigned to them in the .odara0a ,ompanies and .odara0as +%loatation and ,ontrol- "rdinance# '(=@
+DDD2 of '(=@-;9
+4@- 6non-resident6 means a person who is not resident;
+4'- 6Pa!istani compan6 means a compan formed and registered under the ,ompanies Act# '('4 +B22 of
'('4-# or a 0od corporate formed 0# or under an law for the time 0eing in force in Pa!istan# ha7ing in
'
Su0-paras +i- J +ii- omitted 0 %/ A/ '((;/
3
Su0-paras +iii- J +i7- ins/ 0 %/ "/ '(=@/
4
Su0s/ for 6Assistant ,ommissioner6 0 %/ A/ '((4/
:
,l/+3(A- ins/ 0 %/"/ '(='/
7
either case its registered office in Pa!istan# and includes
'
8a trust formed 0 or under an law for the time
0eing in force and9 the Eo7ernment of a Pro7ince of Pa!istan;
+43- 6person6 includes an indi7idual# a firm# an association of persons# a Hindu undi7ided famil# a
compan# a local authorit and e7er other artificial Curidical person;
+44- 6prescri0ed6 means prescri0ed 0 rules made under this "rdinance;
+4:- 6principal officer6# used with reference to a local authorit# or a compan or an association of
persons# includes-
+a- managing director# secretar# treasurer# manager# agent or accountant# 0 whate7er
designation !nown# of the authorit# compan or association; and
+0- an person connected with the management or administration of the local authorit#
compan or association upon whom the
3
8Deput ,ommissioner9 has ser7ed a notice of his
intention of treating him as the principal officer thereof;
+4;- 6profession6 includes 7ocation;
+4<- 6pu0lic ser7ant6 has the same meaning as in the Pa!istan Penal ,ode +D*B of '=<@-# and includes
an income tax authorit and an person emploed in the execution of this "rdinance;
+4)- 6recognised pro7ident fund6 means a pro7ident fund which has 0een# and continues to 0e# recognised
0 the ,ommissioner in accordance with the rules contained in Part 2 of the Sixth Schedule;
4
8+4)A- 6Regional ,ommissioner6 means a person appointed to 0e a Regional ,ommissioner of 2ncome
$ax under section : 8and includes a Director-Eeneral of $ax Withholding and a Director-Eeneral of
2ntelligence and 2n7estigation9;9
+4=- 6registered firm6 means a firm which has 0een# and continues to 0e# registered under section <=;
+4(- 6repealed Act6 means the 2ncome $ax Act# '(33 +D2 of '(33-;
+:@- 6resident6# in relation to an income ear# means-
+a- an indi7idual# who-
+i- is in Pa!istan in that ear for a period of# or for periods amounting in all to# one
hundred and eight two das or more; or
+ii- is in Pa!istan for a period of# or periods amounting in all to#
:
8ninet9 das or more
in that ear and who# within the four ears preceding that ear# has 0een in Pa!istan
for a period of# or periods amounting in all to# three hundred and sixt-fi7e das or
more; or
'
Words ins/ 0 %/"/'(=4/
3
Su0s/ for 62ncome $ax "fficer6 0 %/ A/ '((4/
4
,l/ +4)A- ins/ 0 %/"/ '(=@/
:
Su0s/ for >sixt? 0 %/"/'(='/
8
+0- a Hindu undi7ided famil# firm or other association of persons# the control and
management of whose affairs is situated wholl or partl in Pa!istan in that ear; or
+c- a Pa!istani compan or an other compan# the control and management of whose affairs is
situated wholl in Pa!istan in that ear;
+:'- 6return of total income6 means the return of total income in the prescri0ed form# setting forth such
particulars and accompanied 0 such statements# certificates and other documents# and 7erified in such
manner# as ma 0e prescri0ed;
+:3- 6share-holder6 includes a preference share-holder;
+:4- 6tax6 means income tax# super tax# surcharge and additional tax chargea0le or paa0le under this
"rdinance# and includes an penalt# fee or other charge or an sum or amount le7ia0le or paa0le under
this "rdinance;
(66) *tot!l i#o$e* $e!' the tot!l !$o0t o& i#o$e re&erre" to i 'e#tio 11 #o$+0te" i the
$!er l!i" "o/ i thi' Or"i!#e3 !" i#l0"e' !, i#o$e /hi#h, 0"er !, +ro5i'io o& thi'
Or"i!#e, i' to .e i#l0"e" i the tot!l i#o$e o& ! !''e''ee3
+:;- 6unregistered firm6 means a firm which is not a registered firm; and
+:<- 67aluer6 means a person appointed to 0e a 7aluer under section :/
9
CHAPTER II
ADMINISTRATION
;. I#o$e t!x !0thoritie'/- +'- $here shall 0e the following classes of income tax authorities for the
purposes of this "rdinance# namel1-
+a- ,entral Aoard of Re7enue;
'
8+aa- Regional ,ommissioners of 2ncome $ax;9
+0-
3
8Director-Eeneral of 2n7estigation and 2ntelligence;9
4
8+00- Director-Eeneral of $raining and Research;9
8+000- Director-Eeneral of $ax Withholding;9

+c- ,ommissioners of 2ncome $ax;
+d-
:
8Additional ,ommissioner9s of 2ncome $ax# who ma 0e either Appellate
:
8Additional
,ommissioner9s of 2ncome $ax or 2nspecting
:
8Additional ,ommissioner9s of 2ncome $ax;
;
8+dd- 2ncome $ax Panels;9
+e-
<
8Deput ,ommissioners of 2ncome $ax9; and
+f- 2nspectors of 2ncome $ax/
)
8+'A-
=
8 9 ,ommissioners of 2ncome $ax#
(
8 9 Additional ,ommissioners of 2ncome $ax#
'@
82ncome $ax
Panels9#
<
8Deput ,ommissioners of 2ncome $ax9 and 2nspectors of 2ncome $ax shall 0e su0ordinate to
the Regional ,ommissioners of 2ncome $ax within whose Curisdiction the perform their functions/9
+3- 2nspecting
''
8Additional ,ommissioners9#
'3
82ncome $ax Panels#9
'4
8Deput ,ommissioners9 and
2nspectors of 2ncome $ax shall 0e su0ordinate to the ,ommissioners within whose Curisdiction the
perform their functions/
'
,l/+aa- ins/ 0 %/ "/ '(=@/
3
Su0s/ for >Director# Sur7e# Bigilance# 2nspection and Audit? 0 %/ A/ '((;/ Earlier# the words >Sur7e# Bigilance? ins/ 0 %/
A/ '(=< and the words >and Audit? were ins/ 0 %/ "/ '(=:/
4
,l/ +00- ins/ 0 %/ A/ '((;/
:
Su0s/ for 6Assistant ,ommissioner6 0 %/ A/ '((4/
;
,l/ +dd- ins/ 0 %/ A/ '(==/
<
Su0s/ for 62ncome $ax "fficer6 0 %/ A/ '((4/
)
Su0-sec/ +'A- ins/ 0 %/ "/ '(=@/
=
Words >Director# Sur7e# Bigilance# 2nspection and Audit? omitted 0 %/ A/ '((;/ Earlier these were ins/ 0 %/ A/ '(=</
(
Word >2nspecting? omitted 0 %/ A/ '(=</
'@
Words etc/ ins/ 0 %/ A/ '(==/
''
Su0s/ for 6Assistant ,ommissioner6 0 %/ A/ '((4/
'3
Words etc/ ins/ 0 %/ A/ '(==/
'4
Su0s/ for 62ncome $ax "fficer6 0 %/ A/ '((4/
10
+4-
4
8Deput ,ommissioners9 and 2nspectors of 2ncome $ax shall 0e su0ordinate to the 2nspecting
'
8Additional ,ommissioners9 within whose Curisdiction the perform their functions/
+:- 2nspectors of 2ncome $ax shall 0e su0ordinate to the
4
8Deput ,ommissioners9 within whose
Curisdiction the perform their functions/
6. A++oit$et o& i#o$e t!x !0thoritie', et#/- +'- $he ,entral Aoard of Re7enue ma appoint as
man
'
8Regional ,ommissioners of 2ncome $ax#9
3
8Director-Eeneral of 2n7estigation and 2ntelligence#9
8Director-Eeneral of $ax Withholding9# ,ommissioners of 2ncome $ax# Appellate and 2nspecting
'
8Additional ,ommissioners9 of 2ncome $ax#
4
8Deput ,ommissioners9 and other executi7e or ministerial
officers and staff as ma 0e necessar/
4
8+'A- $he Regional ,ommissioner# or# where the Aoard directs# the ,ommissioner ma appoint as man
2ncome $ax Panels as ma 0e necessar/
+'A- $he ,entral Aoard of Re7enue ma ma!e rules in respect of constitution# procedure and wor!ing of
the 2ncome $ax Panels/9
+3- Su0Cect to such orders or directions as ma 0e issued 0 the ,entral Aoard of Re7enue from time to
time# an other income tax authorit ma appoint an income tax authorit su0ordinate to it and such
other executi7e or ministerial officers and staff# as ma 0e necessar/
+4- $he ,entral Aoard of Re7enue or the
:
8Regional ,ommissioner of 2ncome $ax9 ma appoint a
sufficient num0er of 5ualified persons to act as 7aluers for the purposes of this "rdinance and
)
8the
,entral Aoard of Re7enue9 shall fix a scale of charges for the remuneration of such persons/
+:- All appointments under this "rdinance shall 0e su0Cect to the rules and orders of the %ederal
Eo7ernment regulating the terms and conditions of ser7ice of persons in pu0lic ser7ices and posts/
;
86A. Pri5!te i#o$e t!x !0thoritie'/- +'- Notwithstanding anthing contained in this "rdinance# the
,entral Aoard of Re7enue ma appoint a firm of ,hartered Accountants as defined under ,hartered
Accountants "rdinance# '(<' +"rdinance of '(<'- to conduct audit of an person/
+3- An person authorised 0 the firm referred to in su0-section +'-# while conducting an audit under that
su0-section ma# for the purposes of such audit enter into an premises 0elonging to or in the occupation
of the person to whom the audit relates and call for and inspect and seiHe 0oo!s of accounts or documents
in possession of such person and where7er deemed necessar for conducting the said audit ma 0e
authoriHed in writing# 0 the ,ommissioner to exercise the powers laid down under sections '::# ':;# ':<
and ':= of the "rdinance/
+4- $he scope of audit under this section shall 0e such as the ,entral Aoard of Re7enue ma determine on
case to case 0asis/9
'
Words etc/ ins/ 0 %/ A/ '(==/
3
Words >Director# Sur7e# Bigilance# 2nspection and Audit? omitted 0 %/ A/ '((;/ Earlier# the words >Sur7e# Bigilance? ins/
0 %/ A/ '(=< and the words >and Audit? ins/ 0 %/ "/ '(=:/
4
Su0-secs/ +'A- J +'A- ins/ 0 %/ A/ '(==/
:
Words ins/ 0 %/ "/ '(=:/
;
11
'
8:AA/ A++oit$et o& #ert!i +er'o' &or '0r5e, et#.- +'- Notwithstanding anthing contained in this
"rdinance# the ,entral Aoard of Re7enue ma# appoint an pri7ate agenc# firm or compan to carr out
sur7e in respect of such persons or in such areas as it ma assign 0 an order in writing/
+3- $he agenc# firm or compan appointed under su0-section +'-# shall ha7e the power to ma!e such
en5uiries and o0tain from an person such information as ,entral Aoard of Re7enue ma# 0 order in
writing# specif/
+4- $he ,entral Aoard of Re7enue shall# 0 order in writing# determine the scope of the sur7e referred to
in su0-section +'-/
:AAA/ A++oit$et o& +er'o' &or !0"it o& t!x /ithhol"i2.1 +'- Notwithstanding anthing contained
in this "rdinance# the ,entral Aoard of Re7enue ma appoint an pri7ate agenc# firm or compan to
carr out audit of tax withholding of a registered firm or a compan/
+3- $he ,entral Aoard of Re7enue shall# 0 order in writing# determine the scope of audit referred to in
su0-section +'-/
+4- $he pri7ate agenc# firm or compan appointed under su0-section +'- shall ha7e the power to enter the
premises and inspect 0oo!s of accounts and records of an person or classes of persons assigned to such
agenc# firm or compan 0 an order in writing made 0 the Director $ax Withholding# in this regard/9
9. <0ri'"i#tio o& i#o$e t!x !0thoritie'/- +'- Su0Cect to the pro7isions of this "rdinance#-
+a-
3
8the Regional ,ommissioners and the Research and
4
8Director-Eeneral of $raining and
Research# Director Eeneral of 2n7estigation and 2ntelligence9 shall perform such functions
:
8in respect of such persons or classes of persons or such areas9# as ma 0e assigned to them
0 the ,entral Aoard of Re7enue;
+0- the ,ommissioners and the Appellate
;
8Additional ,ommissioner9s shall perform their
functions in respect of such persons or classes of persons or such areas as the ,entral Aoard
of Re7enue ma direct;
<
8and the ,entral Aoard of Re7enue ma# 0 general or special
order in writing# direct that the powers conferred on the Appellate
:
8Additional
,ommissioner9 0 or under this "rdinance shall# in respect of appeals relating to specified
cases or classes of cases or specified persons or classes of persons# 0e exercised 0 the
,ommissioners and for the purposes of an proceedings in respect of such cases or persons#
references in this "rdinance or in an rules made there under to 6Appellate
:
8Additional
,ommissioner96 shall 0e deemed to 0e references to 6,ommissioner619

)
8Pro7ided that the ,entral Aoard of Re7enue ma# 0 general or special order in
writing# direct that the Curisdiction of the
=
8,ommissioners exercising the powers of an
'
Secs/ :AA J :AAA ins/ 0 %/A/ '(((/
3
Words ins/ 0 %/ "/ '(=@/
4
Su0s/ for >Director# Sur7e# Bigilance# 2nspection and Audit? 0 %/ A/ '((;/ Earlier# the words >Sur7e# Bigilance? ins/ 0 %/
A/ '(=< and the words >and Audit? were ins/ 0 %/ "/ '(=:/
:
Words etc ins/ 0 %/ "/ '(=@/
;
Su0s/ for 6Assistant ,omissioner6 0 %/ A/ '((4/
<
Words etc ins/ 0 %/ "/ '(=@/
)
Pro7iso is/ A %/ "/ '(='/
=
Words ins/ 0 %/ A/ '(=</
12
Appellate
:
8Additional ,ommissioner9 and the Appellate Additional ,ommissioners shall
0e determined 0 the Regional ,ommissioner
'
8 919
8Pro7ided further that the Regional ,ommissioner ma transfer Curisdiction in
respect of cases or persons from one ,ommissioner su0ordinate to him to another;9
+c- the 2nspecting Additional ,ommissioners and the Deput ,ommissioners shall perform
their functions in respect of such persons or classes of persons or such areas as 8the
,ommissioners# to whom the are su0ordinate# ma direct and the ,ommissioner ma with
the prior appro7al of the ,entral Aoard of Re7enue 8or if the ,entral Aoard of Re7enue so
directs# of the Regional ,ommissioner# 0 general or special order in writing direct that the
powers conferred on the Deput ,ommissioner and the 2nspecting Additional
,ommissioner 0 or under this "rdinance shall# in respect of all or an proceedings
relating to specified cases or classes of cases or specified persons or classes of persons# 0e
exercised 0 the 2nspecting Additional ,ommissioner and the ,ommissioner# respecti7el#
and# for the purposes of an proceedings in respect of such cases or persons references in
this "rdinance or in an rules made thereunder to >Deput ,ommissioner6 and 62nspecting
Additional ,ommissioner6 shall 0e deemed to 0e references to 62nspecting Additional
,ommissioner6 and 6,ommissioner6# respecti7el;9

8+cc- Notwithstanding anthing contained in clause +c-# the ,ommissioner ma# 0 general or
special order in writing# direct that all or an of the powers conferred on the 2ncome $ax
"fficer and the 2nspecting Additional ,ommissioner shall# in respect of all or an
proceedings relating to specified cases or classes of cases or specified persons or classes of
persons# 0e exercised 0 the 2ncome $ax Panel and the ,ommissioner# respecti7el# and#
for the purposes of an proceedings in respect of such cases or person# references in this
"rdinance or in an rules made thereunder to 62ncome $ax "fficer6 and 62nspecting
Additional ,ommissioner6 shall 0e deemed to 0e references to 62ncome $ax Panel6 and
6,ommissioner6# respecti7el1
Pro7ided that# an function performed 0 the 8Deput ,ommissioners9 as mem0ers of the
2ncome $ax Panel# on the directions of the said 2nspecting 8Additional ,ommissioner9#
shall 0e deemed to ha7e 0een performed in exercise of the powers conferred on the 2ncome
$ax Panel1
Pro7ided further that an order made 0 the 2ncome $ax Panel under an pro7ision
of this "rdinance shall 0e made onl 0 the said 2nspecting Additional ,ommissioner1
Pro7ided further that# if an one mem0er of the 2ncome $ax Panel# other than the
,hairman# is a0sent from an sitting of the 2ncome $ax Panel# the proceedings of the Panel
ma continue# and no act# proceedings or order of the Panel shall 0e in7alid or 0e called in
5uestion merel on the ground of such a0sence; and9
+d- the 2nspectors of 2ncome $ax shall perform such functions as ma 0e assigned to them 0
the 2ncome $ax authorit under whom the are appointed to wor!/
'
"rds >or the ,ommissioner? omitted 0 %/ A/ '((4/
13
Explanation/- $he power to confer Curisdiction under this su0-section shall include the power to
transfer Curisdiction from one income tax authorit to another/
+3- Where an directions issued under su0-section +'- ha7e assigned to two or more income tax authorities
the same functions or functions in respect of the same persons or classes of persons or the same area# the
shall perform their functions in accordance with such orders as the ,entral Aoard of Re7enue# or an other
authorit to whom the are su0ordinate# ma ma!e for the allocation of functions and the distri0ution of
the wor! to 0e performed/
+4- Within the area assigned to him# the Deput ,ommissioner9 shall ha7e Curisdiction#-
+a- in respect of an person carring on 0usiness or profession# if the place of 0usiness or
profession is situated within such area# or where the 0usiness or profession is carried on in
more places than one# if the principal place of the 0usiness or profession is situated within
such area; and
+0- in respect of an other person# if he resides within the area/
+:- Where a 5uestion arises as to whether 8Deput ,ommissioner9 has Curisdiction to assess an person#
the 5uestion shall 0e determined 0 the ,ommissioner# or where the 5uestion is one relating to the
Curisdiction of different ,ommissioners# 80 the Regional ,ommissioner or Regional ,ommissioners
concerned9 and# if the are not in agreement# 0 the ,entral Aoard of Re7enue/
+;- No person shall 0e entitled to call in 5uestion the Curisdiction of 8Deput ,ommissioner9 after he has
made the return of total income or# where he has not made such return# after the time allowed 0 an
notice ser7ed on him for ma!ing such return has expired/
+<- Notwithstanding anthing contained in this section# e7er 8Deput ,ommissioner9 shall ha7e all the
powers conferred 0# or under# this "rdinance on 8Deput ,ommissioner9 in respect of an income
accruing or arising or recei7ed or deemed# under an pro7ision of this "rdinance# to accrue or arise or 0e
recei7ed within the area assigned to him/
:. Exer#i'e o& =0ri'"i#tio ., ! '0##e''or/- Whene7er# in respect of an proceedings under this
"rdinance# an income tax authorit is succeeded 0 another# the income tax authorit so succeeding ma
continue an proceeding from the stage at which it was left 0 his predecessor/
7. >0i"!#e to 7De+0t, Co$$i''ioer9/- 2n the course of an proceedings under this "rdinance# the
8Deput ,ommissioner9 ma 0e assisted# guided or instructed 0 an other income tax authorit to whom
he is su0ordinate or an other person authorised in this 0ehalf 0 the ,entral Aoard of Re7enue/

?. All o&&i#er' to &ollo/ the or"er' o& the Cetr!l @o!r" o& Re5e0e/- All officers and persons#
emploed in the execution of this "rdinance# shall o0ser7e and follow the orders# instructions and
directions of the ,entral Aoard of Re7enue1
Pro7ided that no such orders# instructions or directions shall 0e gi7en so as to interfere with the discretion
of the Appellate 8Additional ,ommissioner9 in the exercise of his appellate functions or an 7aluer in the
exercise of his functions under this "rdinance/
CHAPTER III
14
CHAR>E OF TAX
9. Ch!r2e o& i#o$e t!x/- +'- Su0Cect to the pro7isions of this "rdinance# there shall 0e charged# le7ied
and paid for each assessment ear commencing on or after the first da of &ul# '()(# income tax in
respect of the total income of the income ear or ears# as the case ma 0e# of e7er person at the rate or
rates specified in the %irst Schedule1
8Pro7ided that where# 0 7irtue of an amendment in the %irst Schedule# the rate of income tax# for the
purpose of assessment in respect of an assessment ear# is altered# the rate of income tax existing prior to
the said alteration shall continue to appl in respect of an assessment ear to which the said existing rate
is applica0le/9
8+'A- Notwithstanding anthing contained in section 4) of the .odara0a ,ompanies and .odara0a
+%loatation and ,ontrol- "rdinance# '(=@ +DDD2 of '(=@-# or an other law for the time 0eing in force#
there shall 0e charged# le7ied and paid for each assessment ear commencing on or after the first da of
&ul# '((4# income tax in respect of the total income of a modara0a at the rate specified in the %irst
Schedule/
Pro7ided that the total income of a modara0a shall not 0e chargea0le to tax for the first three assessment
ears after commencement of its 0usiness if not less than ninet percent of its profits in a ear is
distri0uted to the modara0a certificate holders/9
+3- Where# 0 7irtue of an pro7ision of this "rdinance# income tax is to 0e deducted at source or
collected or paid in ad7ance# it shall 0e so deducted# collected or paid# as the case ma 0e# accordingl/
14. Ch!r2e o& '0+er t!x !" '0r#h!r2e/- +'- 2n addition to the income tax charged for an ear# there
shall 0e charged# le7ied and paid for that ear in respect of the total income# or an part thereof# of the
income ear or ears# as the case ma 0e# of e7er person# an additional dut of income tax +in this
"rdinance referred to as Ksuper taxG- and surcharge at the rate or rates specified in the %irst Schedule1
8Pro7ided that where# 0 7irtue of an amendment in the %irst Schedule# the rate of super tax and
surcharge# for the purpose of assessment in respect of an assessment ear# is altered# the rate of super tax
and surcharge existing prior to the said alteration shall continue to appl in respect of an assessment ear
to which the said existing rate is applica0le/9
+3- Su0Cect to the pro7isions of this "rdinance# the total income of an person shall# for the purposes of
super tax and surcharge# 0e the total income as assessed for the purposes of income tax# and where an
assessment has 0ecome final and conclusi7e for the purposes of income tax for an ear# the assessment
shall also 0e final and conclusi7e for the purposes of super tax or surcharge# as the case ma 0e# for the
same ear/
+4- All the pro7isions of this "rdinance relating to the charge# assessment# deduction at source# collection#
or pament in ad7ance# reco7er and refund of income tax shall appl# so far as ma 0e# to the charge#
assessment# deduction at source# collection# pament in ad7ance# reco7er and refund of super tax and
surcharge# as the case ma 0e/
11. S#o+e o& tot!l i#o$e/- +'- Su0Cect to the pro7isions of this "rdinance# the total income# in
relation to an assessment ear# or a person#-
15
+a- who is a resident# includes all income from whate7er source deri7ed# which -
+i- is recei7ed# or is deemed to 0e recei7ed# in Pa!istan in the income ear 0# or on
0ehalf of# such person; or
+ii- accrues or arises# or is deemed to accrue or arise# to him in Pa!istan during such
ear; or
+iii- accrues or arises to him outside Pa!istan during such ear;
+0- who is a non-resident# includes all income from whate7er source deri7ed# which-
+i- is recei7ed# or is deemed to 0e recei7ed# in Pa!istan in the income ear 0# or on
0ehalf of# such person; or
+ii- accrues or arises# or is deemed to accrue or arise# to him in Pa!istan during such
ear/
+3- Notwithstanding anthing contained in su0-section +'-# where an amount consisting of either the
whole or a part of an income has 0een included in the total income of a person on the 0asis that it has
accrued or arisen# or is deemed to ha7e accrued or arisen# to him in an ear# it shall not 0e included again
in his total income on the 0asis that it is recei7ed# or is deemed to 0e recei7ed# 0 him in Pa!istan in an
other ear/
'3/ I#o$e "ee$e" to !##r0e or !ri'e i P!-i't!/- +'- 2ncome which would 0e chargea0le under the
head 6Salar6 shall 0e deemed to accrue or arise in Pa!istan# where7er paid# if it is earned in Pa!istan# or
if it is paid 0# or on 0ehalf of# the Eo7ernment or a local authorit in Pa!istan to a person in the ser7ice of
such Eo7ernment or authorit# as the case ma 0e/
+3- An income accruing or arising# whether directl or indirectl# through or from-
+a- an 0usiness connection in Pa!istan/
+0- an asset# propert or source of income in Pa!istan; or
+c- transfer of a capital asset situated in Pa!istan# shall 0e deemed to accrue or arise in
Pa!istan1
Pro7ided that# in the case of a 0usiness all the operations of which are not carried out in Pa!istan#
the income of the 0usiness deemed under this su0-section to accrue or arise in Pa!istan shall 0e onl such
part of the income as is reasona0l attri0uta0le to the operations carried out in Pa!istan/
+4- An income 0 wa of interest paa0le 0-
+a- a person who is a resident# except where the interest is paa0le in respect of an de0t
incurred# or mones 0orrowed and used# for the purposes of a 0usiness or profession
carried on 0 such person outside Pa!istan or for the purposes of ma!ing or earning an
income from an source outside Pa!istan; or
16
+0- a person who is a non-resident# where the interest is paa0le in respect of an de0t
incurred# or mones 0orrowed and used# for the purposes of a 0usiness or profession
carried on 0 such person in Pa!istan or for the purposes of ma!ing or earning an income
from an source in Pa!istan#
shall 0e deemed to accrue or arise in Pa!istan/
+:- An income 0 wa of roalt paa0le 0-
+a- a person who is a resident# except where the roalt is paa0le in respect of an right#
propert or information used or ser7ices utilised for the purposes of a 0usiness or
profession carried on 0 such person outside Pa!istan or for the purposes of ma!ing or
earning an income from an source outside Pa!istan; or
+0- a person who is a non-resident# where the roalt is paa0le in respect of an right#
propert or information used or ser7ices utilised for the purposes of a 0usiness or
profession carried on 0 such person in Pa!istan or for the purposes of ma!ing or earning
an income from an source in Pa!istan#
shall 0e deemed to accrue or arise in Pa!istan/
Explanation/- %or the purposes of this section and su0-section +:- of section 4'# >roalt? means
consideration +including lump sum consideration- 0ut excluding an consideration which would 0e the
income of the recipient chargea0le under the head 6,apital gains6- for-
+i- the transfer of all or an rights +including the granting of a licence- in respect of a patent#
design# secret process or formula# or trade mar! or similar propert;
+ii- the imparting of an information concerning the wor!ing of# or the use of# a patent#
in7ention# model# design# secret process or formula# or trade mar! or similar propert;
+iii- the use of an patent# in7ention# model# design# secret process or formula# or trade mar! or
similar propert;
+i7- the imparting of an information concerning technical# industrial# commercial or scientific
!nowledge# experience or s!ill;
+7- the transfer of all or an rights +including the granting of a licence- in respect of an cop-
right# literar# artistic or scientific wor! including films or 7ideo tapes for use in connection
with tele7ision or tapes for use in connection with radio 0roadcasting 0ut not including
consideration for the sale# distri0ution or exhi0ition of cinematograph films; or
+7i- the rendering of an ser7ices in connection with the acti7ities referred to in clauses +i- to
+7-/
+;- An income 0 wa of fees for technical ser7ices paa0le 0-
17
+a- a person who is a resident# except where the fees are paa0le in respect of ser7ices utilised
in a 0usiness or profession carried on 0 such person outside Pa!istan or for the purposes
of ma!ing or earning an income from an source outside Pa!istan; or
+0- a person who is a non-resident# where the fees are paa0le in respect of ser7ices utilised in
a 0usiness or profession carried on 0 such person in Pa!istan or for the purposes of
ma!ing or earning an income from an source in Pa!istan#
shall 0e deemed to accrue or arise in Pa!istan/
Explanation/- %or the purposes of this su0-section 8# clause +0- of section 3:# su0-section +3- of section
4@# su0-section +4A- of section ;@ and section =@AA9# 6fees for technical ser7ices6 means an
consideration +including an lump-sum consideration- for the rendering of an managerial# technical or
consultanc ser7ices +including the pro7ision of the ser7ices of technical or other personnel- 0ut does not
include consideration for an construction# assem0l or li!e proCect underta!en 0 the recipient or
consideration which would 0e income of the recipient chargea0le under the head 6Salar6/
+<- As used in su0-sections +4-# +:- and +;-# the expression 6a person who is resident6 includes
Eo7ernment/
+)- Where an assessee has made an loan or ad7ance to an person on which no interest has 0een charged
or the rate at which interest has 0een charged is less than the rate +hereinafter referred to as the Fsaid rateG-
arri7ed at 0 adding two per cent to the 0an! rate notified 0 the State Aan! of Pa!istan as applica0le on
the date on which the loan or ad7ance was made# the amount not charged or the amount e5ual to the
interest computed at the said rate as reduced 0 the interest actuall charged shall 0e deemed to 0e the
income of the assessee and shall 0e included in his total income1
Pro7ided that nothing contained in this su0-section shall appl to-
+a- an loan or ad7ance made 0 an assessee to an emploee in accordance with the terms and
conditions of his emploment and for such purposes or purposes; or
+0- such assessee or persons or class or classes of assessees or persons# as ma 0e specified in
this 0ehalf 0 the ,entral Aoard of Re7enue 0 notification in the official EaHette1
8Pro7ided further that nothing contained in this su0-section shall appl in respect of an assessment ear
0eginning on or after the first da of &ul# '(=;/9
+=- An income deri7ed 0 an assessee in an income ear +hereafter in this su0-section referred to as the
Ksaid income earG- from an 0usiness or profession# which has 0een or was# discontinued# or an other
source which has ceased# as the case ma 0e# at an time 0efore the commencement# or during the course#
of the said income ear shall# if such income would ha7e 0een chargea0le to tax if it had 0een recei7ed in
the income ear in which it accrued or arose# 0e deemed to 0e income chargea0le to tax from such
0usiness or profession or other source# which shall# for the purposes of this "rdinance# 0e deemed to ha7e
0een carried on# or not ceased# as the case ma 0e# 0efore the commencement# or during the course# of the
said income ear/
18
'
8 9
3
8+(A- Where an assessee# 0eing a pu0lic compan other than a scheduled 0an! or a modara0a# deri7es
profits for an income ear 0ut does not distri0ute cash di7idends within se7en months of the end of the
said income ear or distri0utes di7idends to such an extent that its reser7es# after such distri0ution# are in
excess of fift percent of its paid up capital# so much of its reser7es as exceed fift per cent of its paid up
capital shall 0e deemed to 0e the income ha7ing accrued to such compan during that ear1
Pro7ided that in respect of assessment ear commencing on the '
st
da of &ul# '(((# the cash
distri0ution made within the following period shall 0e treated as distri0ution for the purpose of this su0-
section1-
+i- where the income ear ended on a date prior to the thirtieth da of &une# '(((# and the
distri0ution is made within a period of three months rec!oned from the first da of &ul#
'(((; or
+ii- where the income ear ended on the thirtieth da of &une# '(((# and the distri0ution is
made within a period of eight months rec!oned from the first da of &ul# '(((/
Explanation/- %or the purpose of this su0-section# the expression Kreser7esG shall ha7e the meaning
as ma 0e prescri0ed/9
+'@- An di7idend paid to an share-holder without Pa!istan 0 a Pa!istani compan shall 0e deemed
to 0e income accruing or arising in Pa!istan to such share-holder/
+''- An di7idend declared or distri0uted 0 a compan shall 0e deemed to 0e the income of the
income ear in which it is declared 8 9 and shall 0e included in the total income of the assessee of that
ear1
8Pro7ided that# where an di7idend is declared within six wee!s of the end of the income ear# it shall 0e
deemed to 0e the income of the income ear in which it is distri0uted and included in the total income of
that ear/9
+'3- Where an assets not 0eing stoc!-in-trade 8 9 are purchased 0 an assessee from an compan and the
2ncome $ax "fficer has reason to 0elie7e that the price paid 0 the assessee is less than the fair mar!et
7alue thereof# the difference 0etween the price so paid and the fair mar!et 7alue shall# 0e deemed to 0e
income of the assessee chargea0le to tax under this "rdinance819
4
8Pro7ided that in the case of asset leased 0 a scheduled 0an!# a financial institution# modar0a or a
leasing compan the fair mar!et 7alue shall mean the residual 7alue paid 0 the assessee# 0eing the first
lessee# on the maturit of the lease agreement and the amount paid 0 wa of lease rentals and other
charges so howe7er that the aggregate of such paments and the residual is not less than the original cost
of the asset/9
8+'4- Where an assessee# 0eing the owner of a 0uilding# recei7es from an person to whom such 0uilding
or an part there of is let out on rent 8 9 an amount which is not adCusta0le against the rent paa0le 0
'
Su0-sec/ +(- omitted 0 %/ "/3@@'/
3
Su0-sec/ +(A- ins/ 0 %/A/'(((/
4
Pro7iso ins/ 0 %/A/'((=/
19
such person# such amount shall 0e deemed to 0e the income of the assessee and chargea0le to tax under
the head 62ncome from house propert6 in the income ear in which such amount is recei7ed and the nine
income ear next following the said income ear in e5ual proportion; and the amount so allocated to each
income ear shall 0e deemed to 0e the rent recei7ed in respect of such 0uilding or a part thereof/
+':- Where the 8amount9 mentioned in su0-section +'4- is refunded 0 the assessee to the tenant on
termination of the tenanc 0efore expir of ten ears as aforementioned# no portion of such amount shall
0e allocated to the income ear in which it is refunded or an income ear thereafter except in a case
mentioned in su0-section +';-/
8+';- Where# on the termination of the tenanc of one person and refund to that person of the amount
mentioned in su0-section +'4-# the assessee lets out such 0uilding or such part thereof# as the case ma 0e#
to another person and recei7es from such other person an amount +hereinafter called the 6succeeding
amount6- which is not adCusta0le against the rent paa0le 0 such other person# the succeeding amount as
reduced 0 such portion of the earlier amount as was charged to tax# shall 0e deemed to 0e the income of
the assessee chargea0le under the head 62ncome from house propert6 and charged to tax as laid down in
su0-section +'4-/9
+'<- Where an assessee recei7es an amount in consideration for 7acating the possession of a 0uilding or a
part thereof of which he is a tenant# the said amount as reduced 0 the amount# if an#
paid 0 the assessee for ac5uiring possession of such 0uilding or part thereof shall 0e deemed to 0e the
income of the assessee and chargea0le to tax under the head F2ncome from other sourcesG in the income
ear in which it is recei7ed and nine income ear next following the said income ear in e5ual proportion/
+')- $he pro7isions of su0-sections +'4- to +'<- shall also appl to an assessee who has recei7ed the
amount referred to in su0-sections +'4-# +';- or +'<- in the income ear rele7ant to the assessment ear
commencing on the first da of &ul# '(=@# or in an earlier income ear so# howe7er# that income
chargea0le to tax in the manner laid down in the said su0-sections shall 0e charged to tax onl in respect
of the income ear rele7ant to the assessment ear commencing on the first da of &ul# '(=@# or an
assessment ear thereafter/9
'
8+'=- Where an sum claimed# or shown# to ha7e 0een recei7ed as loan or ad7ance or gift 0 an assessee
during an income ear commencing on or after the first da of &ul# '((=# from an person# not 0eing a
0an!ing compan# or a financial institution notified 0 the ,entral Aoard of Re7enue for this purpose#
otherwise than 0 a crossed che5ue drawn on a 0an! or through a 0an!ing channel from a person holding
a National $ax Num0er# the said sum shall 0e deemed to 0e the income of the assessee for the said income
ear chargea0le to tax under this "rdinance1
Pro7ided that# where the said loan or ad7ance or gift is claimed# or shown# 0 wa of the explanation#
referred to in su0-section +'- of section '4# in a case to which the first pro7iso to the said su0-section
applies# the income under this su0-section shall relate to the assessment referred to in the said pro7iso/9
8 9
8+'(- Where an assessee# 0eing a scheduled 0an!# a financial institution# or such modara0a or leasing
compan as is appro7ed 0 the ,entral Aoard of Re7enue for the purposes of the $hird Schedule# has
leased out# on or after the first da of &ul# '(=;# an asset# whether owned 0 it or not# to another person#
'
Su0-sec/ +'=- su0s/ 0 %/ A/ '((=/
20
an amount paid or paa0le 0 the said person in connection with the lease of the said asset shall 0e
deemed to 0e the income of the said assessee/9
'4/ A1ex+l!ie" i5e't$et', et#., "ee$e" to .e i#o$e/- +'- Where 8 9#
+a- an sum is found to 0e credited in the 0oo!s of an assessee maintained for an income
ear; or
8+aa- the assessee is found to ha7e made an in7estment or is found to 0e the owner of an
mone or 7alua0le article# in an ear; or9
+0- the assessee is found to ha7e made an in7estment in an income ear which is not
recorded in the 0oo!s of account maintained for that income ear 8or is not9 shown in the
wealth statement 8or return of wealth9 furnished under section ;= in respect of that ear; or
+c- the assessee is found in respect of an income ear to 0e the owner of an mone or
7alua0le article which is not recorded in the 0oo!s of account# if an# maintained 0 him or
is not shown 0 him in an wealth statement 8or return of wealth9 furnished under section
;= in respect of that ear; or
+d- the assessee has made in7estment in an income ear or is found in respect of an such
ear to 0e the owner of an 7alua0le article and the 8Deput ,ommissioner9 finds that the
amount expended on ma!ing such in7estment or in ac5uiring such 7alua0le article exceeds
the amount recorded in this 0ehalf in the 0oo!s of account maintained 0 him or shown in
the wealth statement 8or return of wealth9 furnished under section ;= in respect of that ear;
or
+e- an assessee has# during an income ear# incurred an expenditure#
and the assessee offers no explanation a0out the nature and source of such sum# in7estment# ac5uisition of
the mone or 7alua0le article# excess amount or the mone from which the expenditure was met# as the
case ma 0e# or the explanation offered 0 him is not# in the opinion of the 8Deput ,ommissioner9#
satisfactor# the sum so credited# the 7alue of the in7estment# the mone or the 7alue of the article# the
excess amount or the amount of the expenditure# as the case ma 0e# shall 0e deemed to 0e the income of
the assessee of such income ear chargea0le to tax under this "rdinance1
8Pro7ided that# where an act referred to in clauses +a- to +e- is disco7ered after the assessment of income
of the income ear to which the said act relates has 0een made# the income chargea0le to tax under this
section shall 0e included in the total income of the income ear rele7ant to the assessment ear in which
the said disco7er is made1
Pro7ided further that in cases referred to in clauses +aa- to +e- such income shall not 0e chargea0le to tax
unless 8 9 appro7al of the 2nspecting Additional ,ommissioner has 0een o0tained/9
+3- Where the 7alue of an in7estment or article referred to in 8clause +aa-# +0-#9 +c- or +d-# or the amount
of expenditure referred to in clause +e- of su0-section +'- is# in the opinion of the Deput ,ommissioner#
too low# the Deput ,ommissioner ma determine# after gi7ing a reasona0le opportunit to the assessee of
0eing heard 8 9# a reasona0le 7alue or the amount thereof# as the case ma 0e# and all the pro7isions of su0-
section +'- shall ha7e effect accordingl/
21
'
8+3A- $he pro7isions of this section shall not appl in respect of an amount of foreign exchange remitted
from a0road through normal 0an!ing channels and got encashed in Pa!istan rupees from a scheduled 0an!
and a certificate is produced to that effect from such 0an!/9
8+4- $he ,entral Aoard of Re7enue ma 0 rules pro7ide for the determination off the 7alue of an
propert or article for the purposes of this section/9
':/ Exe$+tio'/- 8+'- 8$he9 incomes or classes of income# or persons or classes of persons specified
in the Second Schedule shall 0e-
+a- exempt from tax under this "rdinance# su0Cect to the conditions and to the extent specified
therein; or
+0- lia0le to tax at such rates# which are less than the rates specified in the %irst Schedule# as
are specified therein; or
+c- allowed a reduction in tax lia0ilit# su0Cect to the conditions and to the extent specified
therein; or
+d- exempt from the operation of an pro7ision of this "rdinance# su0Cect to the conditions and
to the extent specified therein19
8Pro7ided that# where an income which is exempt from tax under an pro7ision of the Second Schedule#
such income# as ma 0e specified in the said Schedule and su0Cect to such conditions as ma 0e specified
therein# shall 0e included in the total income# so howe7er that the tax shall not 0e paa0le in respect of
such income/9
8 9
+3- $he %ederal Eo7ernment ma# from time to time# 0 notification in the official EaHette# ma!e such
amendment in the Second Schedule 0-
+a- adding an clause or condition therein;
+0- deleting an clause or condition therein; or
+c- ma!ing an change in an clause or condition therein#
as it ma thing fit# and all such amendments shall ha7e effect in respect of an assessment ear# as ma 0e
specified in this 0ehalf# including an such ear 0eginning on an date 0efore or after the commencement
of the financial ear in which the said notification is issued/
Pro7ided that the %ederal Eo7ernment shall place 0efore the National Assem0l all amendments made 0
it in the Second Schedule during a financial ear/9
'
Su0-sec/ +3A- ins/ 0 %/"/3@@'/
22
CHAPTER IB
COMPATATION OF TOTAL INCOME
';/ He!"' o& i#o$e/- All income shall# for the purposes of the charge of tax and the computation of
total income# 0e classified under the following heads namel1-
+a- Salar;
+0- 2nterest on securities;
+c- 2ncome from house propert;
+d- 2ncome from 0usiness or profession;
+e- ,apital gains; and
+f- 2ncome from other sources/
'</ S!l!r,/- +'- $he following incomes shall 0e chargea0le under the head 6Salar6# namel1-
+a- an salar due to the assessee from an emploer in the income ear# whether paid or not;
and
+0- an salar +including arrears 8or ad7ances9 of salar- paid to the assessee in the income
ear 0 an emploer1
Pro7ided that where an salar is included in the total income on the 0asis that it has
0ecome due to an assessee# it shall not 0e included again on the 0asis that it is paid/
+3- %or the purposes of su0-section +'-#-
+a- 6salar6 includes-
+i- an wages;
+ii- an annuit# pensioner gratuit;
+iii- an fees# commissions# allowances# per5uisites or profits in lieu of# or in addition
to# salar or wages;
+0- 6per5uisite6 includes-
+i- the 7alue of rent-free accommodation;
+ii- the 7alue of an concession in the matter of rent respecting an accommodation;
23
+iii- an sum paa0le 0 the emploer# whether directl or indirectl# to effect an
insurance on the life of# or to effect a contract for an annuit for the 0enefit of# the
assessee# or his spouse or an dependent child;
+i7- the 7alue of an 0enefit pro7ided free of cost or at a concessional rate;
+7- an sum paid 0 an emploer in respect of an o0ligation of an emploee;
+c- 6profits in lieu of salar6 includes-
+i- the amount of an compensation due to# or recei7ed 0# an assessee from his
emploer at# or in connection with# the termination of# or the modification of an
terms or conditions relating to# his emploment;
+ii- an pament due to# or recei7ed 0# an assessee from a pro7ident or other fund to
the extent to which it does not consist of contri0utions 0 the assessee and the
interest on such contri0utions;
+d- 6emploee6 includes a former emploer; and
+e- 6emploee6# in relation to a compan# includes a managing director or an other director or other
indi7idual# who irrespecti7e of his designation# performs an duties or functions in connection with
the management of the affairs of the compan/
')/ Itere't o 'e#0ritie'/- +'- $he following income shall 0e chargea0le under the head 62nterest on
securities6# namel1-
+a- interest on an securities of the %ederal Eo7ernment or a Pro7incial Eo7ernment recei7ed
0 an assessee in an income ear; and
+0- interest on de0entures or other securities for mone issued 0# or on 0ehalf of# a local
authorit or a Pa!istani compan recei7a0le 0 an assessee in an income ear/
+3- Notwithstanding anthing contained in su0-section +'-#-
+a- where an securit of the %ederal Eo7ernment is issued with the condition that the interest here
on shall not 0e lia0le to tax the interest recei7a0le on such securit shall 0e exempt from
tax in accordance with such condition; and
+0- 8tax9 paa0le on the interest recei7a0le on an securit of a Pro7incial Eo7ernment issued
with the same condition as aforesaid shall 0e paa0le 0 that Pro7incial Eo7ernment/
'=/ De"0#tio'/- +'- 2n computing the income under the head 62nterest on securities6# the following
allowances and deductions shall 0e made# namel1-
+a- an interest paid 0 the assessee to an 0an!ing compan or other person on mones
0orrowed 0 him for the purpose of in7estment in securities; and
24
0- an commission paid to a 0an!ing compan for realising interest on such securities on
0ehalf of the assessee/
+3- %or the purposes of su0-section +'-#-
+a- 6mones 0orrowed6 shall# in the case of a 0an!ing compan# include mones recei7ed 0
wa of deposits; and
+0- the amount to 0e regarded as interest paid on mones 0orrowed shall not exceed an amount
which 0ears to the amount of interest paid on all mones 0orrowed 0 the assessee the
same proportion as the total amount of interest on securities +inclusi7e of tax deducted
under su0-section +3- of section ;@- 0ears to the gross receipts from all sources included in
the profit and loss account of the assessee/
+4- Where the securities in respect of which an interest is recei7a0le 0 an assessee consist of# or
include# an securities to which clause +a- of su0-section +3- of section ') applies# no allowance or
deduction on account of an interest or commission paid under clause +a- or clause +0- of su0-section +'-#
as the case ma# 0e# in respect of# or alloca0le to# the said securities shall 0e made in computing the
income under the said su0-section +'-/
+:- $he allowances and deductions made under su0-section +'- shall not 0e admissi0le for the purpose
of computing the income of the assessee under an other head/
+;- $he pro7isions of section 3: shall# so far as ma 0e# appl to the allowances and deductions under
this section as the appl to the allowances and deductions in respect of income chargea0le under the head
62ncome from 0usiness or profession6/
'(/ I#o$e &ro$ ho0'e +ro+ert,/- +'- $he annual 7alue of propert shall 0e chargea0le under the
head 62ncome from house propert6/
+3- %or the purposes of su0-section +'-#-
+a- 6house propert6 means an propert consisting of an 0uildings or lands appurtenant
thereto of which the assessee is the owner# 0ut does not include an such propert +or an
portion thereof- which is occupied 0 the assessee for purposes of an 0usiness or
profession carried on 0 him the profits whereof are chargea0le to tax under this
"rdinance; and
+0- 6annual 7alue6 of an propert shall 0e deemed to 0e the sum for which the propert might
reasona0l 0e expected to let from ear to ear;
Pro7ided that where the propert is let on rent# the annual 7alue shall not 0e less than the
rent paa0le 0 the tenant/
+4- Nothing contained in this section shall appl in the case of an such propert which is in the
occupation of the owner for purposes of his own residence/
25
Explanation/- %or the purpose of this section# an propert# the owner of which is in receipt of an rent#
whether in cash or otherwise# whether from emploer or otherwise# shall not 0e ta!en to 0e in the
occupation of such owner for the purpose of his own residence/6;
3@. De"0#tio'/- +'- 2n computing the income under the head 62ncome from house propert6 the
following allowances and deductions shall 0e made# namel1-
+a- in respect of repairs# an allowance e5ual to 8one fifth9 of the annual 7alue;
+0- the amount of an premium paid to insure the propert against ris! of damage or
destruction;
+c- the amount of an local rate# tax# charge or cess +0eing owners 0urden- in respect of
propert or income from propert paid to an local authorit or Eo7ernment# not 0eing an
tax paa0le under this "rdinance;
+d- where the propert is su0Cect to a ground rent# the amount paid on account of such ground
rent;
+e- where the propert has 0een ac5uired# constructed# reno7ated or reconstructed with
0orrowed capital# the amount of an interest paid on such capital;
8+ee- where the propert has 0een ac5uired# constructed# reno7ated# extended or reconstructed
with capital contri0uted 0 the House Auilding %inance ,orporation constituted under the
House Auilding %inance ,orporation Act# '(;3 +DB222 of '(;3-# or a scheduled 0an!#
under a scheme of in7estment in propert on the 0asis of sharing the rental income made 0
the said ,orporation or the 0an!# the amount representing share in rental income +excluding
return of capital# if an- from the said propert paid to the said ,orporation or the 0an!;9
+f- where the propert is su0Cect to mortgage or other capital charge# the amount of interest
paid on such mortgage or charge;
+g- an expenditure +not exceeding six percent of the annual 7alue- incurred 0 the assessee for the
purpose of collecting the rent of the propert;
8+gg- an expenditure incurred 0 the assessee on legal ser7ice ac5uired to defend title of the
propert or an suit connected therewith in a court of law;9
+h- where the propert is 7acant during a part of the ear# an allowance e5ual to that part of the
annual 7alue# which is proportionate to the period during which the propert was 7acant or#
where the propert is let out in parts# that part of the annual 7alue which is proportionate to
the period during which such part was 7acant; and
+i- su0Cect to such rules as ma 0e made in this 0ehalf# an allowance on account of unrealised rent/
+3- $he allowance and deductions under su0-section +'- shall not 0e admissi0le for the purpose of
computing the income of the assessee under an other head/
26
+4- $he pro7isions of section 3: shall# so far as ma 0e# appl to the allowances and deductions under this
section as the appl to the allowances and deductions in respect of income chargea0le under the head
62ncome from 0usiness or profession/
8+:- Where in an income ear the assessee had paid an amount referred to in clauses +0- to +g- of su0-
section +'- which relates to an earlier income ear and the said amount has not 0een allowed as deduction
in that ear# the said amount shall 0e allowed as deduction in the income ear in which it is paid or# at the
written option of the assessee# in the income ear to which it relates/9
3'/ Li!.ilit, i the #!'e o& #o1o/er'/- Where an propert to which section '( applies is owned 0
two or more persons and their respecti7e shares are definite and ascertaina0le# such persons shall not# in
respect of such propert# 0e assessed as an association of persons# 0ut the share of each such person in the
income from the propert shall 0e included in his total income/

33/ I#o$e &ro$ .0'ie'' or +ro&e''io/- $he following incomes shall 0e chargea0le under the head
62ncome from 0usiness or profession6# namel1-
+a- profits and gains of an 0usiness or profession carried on# or deemed to 0e carried on# 0
the assessee at an time during the income ear;
+0- income deri7ed 0 an trade# professional and similar association from specific ser7ices
performed for its mem0ers; and
+c- 7alue of an 0enefit or per5uisite# whether con7erti0le in to mone or not# arising from
0usiness or the exercise of a profession/
Explanation/- Where speculati7e transactions carried on 0 an assessee are of such a nature
as to constitute a 0usiness# the 0usiness +hereinafter referred to as >speculation 0usiness6-
shall 0e deemed to 0e distinct and separate from an other 0usiness carried on 0 the
assessee/
34/ De"0#tio'/- +'- 2n computing the income under the head 62ncome from 0usiness or profession6#
the following allowances and deductions shall 0e made# namel1-
+i- an rent paid for the premises in which such 0usiness or profession is carried on;
+ii- an local rate# tax# charge or cess in respect of such premises paid to an local authorit or
Eo7ernment# not 0eing an tax paa0le under this "rdinance;
+iii- an amount paid on account of current repairs to an such premises or an machiner#
plant# furniture or fittings used for purposes of 0usiness or profession;
+i7- an premium paid in respect of insurance against ris! of damage or destruction to an
0uilding# machiner# plant# furniture or fittings# or stoc!s and stores used for the purposes
of 0usiness or profession;
+7- in respect of depreciation 8including %irst Lear Allowance or Rein7estment Allowance or
2ndustrial Auilding Allowance9 of an such 0uilding# machiner# plant# furniture or fittings#
0eing the propert of the assessee# the allowance admissi0le under the $hird Schedule#
27
8except depreciation
'
8or %irst Lear Allowance9 on assets gi7en on lease shall 0e allowed
against income from lease rentals onl9 ;
+7i- in respect of animals which ha7e 0een used for the purposes of the 0usiness or profession
+otherwise than as stoc!-in-trade- and ha7e died or 0ecome permanentl useless for such
purposes# the difference 0etween the original cost to the assessee of the animals and the
amount# if an# realised in respect of the carcasses or animals;
8+7ia- an sum paid on or after the first da of &ul# '(=;# to a schedule 0an!# a financial
institution# or such modara0a or leasing compan as is appro7ed 0 the ,entral Aoard of
Re7enue for the purposes of the $hird Schedule
3
8#or an pament to a Special Purpose
Behicle on 0ehalf of the "riginator9# 0 wa of lease mone in respect of an asset ta!en on
lease 0 the assessee and used for the purposes of an 0usiness or profession carried on 0
him;9
+7ii- an interest paid in respect of capital 0orrowed for the purposes of the 0usiness or
profession;
8+7iia- an sum paid to a modara0a or to a Participation $erm ,ertificate holder for an funds
0orrowed for the purposes of the 0usiness or profession;9
8+7ii0- an sum paid or credited to an person maintaining a profit and loss sharing account or
deposit with a scheduled 0an! 0 wa of distri0ution of profits 0 the said 0an! in respect
of the said account or deposit;9
8+7iic- an sum paid 0 the House Auilding %inance ,orporation constituted under the House
Auilding %inance ,orporation Act# '(;3 +DB222 of '(;3-# to the State Aan! of Pa!istan
+hereinafter referred to as the KAan!G- as the share of the Aan! in the profits earned 0 the
said ,orporation on its in7estment in the propert made under a Scheme of in7estment in
propert on partnership in profit and loss# where such in7estment is pro7ided 0 the Aan!
under the House Auilding %inance ,orporation +2ssue and Redemption of ,ertificates-
Regulations# '(=3;9
8+7iicc-an sum paid 0 the National De7elopment *easing ,orporation *imited to the State Aan!
of Pa!istan +hereinafter referred to as the KAan!G- as the share of the Aan! in the profits
earned 0 the said ,orporation on its leasing operations financed out of a credit line
pro7ided 0 the Aan! on a profit and loss sharing 0asis;9
4
8+7iiccc- an sum paid 0 the Small Ausiness %inance ,orporation to the State Aan! of Pa!istan
+hereinafter referred to as the 6Aan!6- as the share of the Aan! in profit earned 0 the said
,orporation on its in7estment in small 0usiness out of credit line pro7ided 0 the Aan! on
profit and loss sharing 0asis/
8+7iid- an sum paid to a 0an! under a scheme of mushari!a representing its share in the profits of
that .ushari!a;9
'
3
Words ins/ 0 %/ "/ 3@@'/
4
,l/ +7iiccc- ins/ 0 %/"/3@@'/
28
'
8+7iidd- the financial cost of securitiHation of recei7a0les 0 an "riginator from a Special Purpose
Behicle 0eing the difference 0etween the amount recei7ed 0 the originator and the amount of
recei7a0les securitised from a Special Purpose Behicle/9
8+7iie- an sum paid to a certificate holder under a .ushari!a scheme appro7ed 0 the ,orporate
*aw Authorit and Religious Aoard formed under the .odara0a ,ompanies and
.odara0as +%loatation and ,ontrol- "rdinance# '(=@ +DDD2 of '(=@- representing his in
the profits of that .ushari!a#1
+7iii- an sum paid to an emploee as 0onus or commission for ser7ices rendered# where such
sum would not ha7e 0een paa0le to him as profits or di7idend if it had not 0een paid as
0onus or commission1
Pro7ided that the amount of the 0onus or commission is of a reasona0le amount
with reference to-
+a- the pa of the emploee and the conditions of his ser7ice;
+0- the profits of the 0usiness or profession for the ear in 5uestion; and
+c- the general practice in similar 0usinesses or professions;
3
8 9
+x- in respect of 0ad de0ts# such amount +not exceeding the amount actuall written off 0 the
assessee- as ma 0e determined 0 the 8Deput ,ommissioner9 to 0e irreco7era0le;
+xi- an sum paid to a scientific research institute# poltechnic# college or other institution in
Pa!istan affiliated to an Mni7ersit or Aoard of Education esta0lished or incorporated 0#
or under# an %ederal or Pro7incial law# or recognised# aided or run 0 Eo7ernment or run
0 an local authorit# to 0e used for scientific research or technical training in Pa!istan; 8 9
+xii- an expenditure laid out or expended on scientific research in Pa!istan related to the
0usiness carried on 0 the assessee;
+xiii- an expenditure laid out or expended on an educational institution or hospital in Pa!istan
esta0lished for the 0enefit of the emploees# their families and dependants;
+xi7- an expenditure laid out or expended on an institute in Pa!istan esta0lished for the
training of industrial wor!ers recognised# aided or run 0 Eo7ernment or run 0 an local
authorit;
+x7- an expenditure laid out or expended on the training of an person# 0eing a citiHen of
Pa!istan# in connection with a scheme appro7ed 0 the ,entral Aoard of Re7enue for the
purposes of this clause;
'
,l/ +7iidd- ins/ i0id/
3
,l/+ix- deleted 0 %/"/ 3@@@/
29
+xi7- an sums paid on account of annual mem0ership su0scription to a registered trade
organisation within the meaning of the $rade "rganisations "rdinance# '(<' +D*B of
'(<'-;
+x7ii- an expenditure incurred 0 an assessee wholl and exclusi7el in connection with his 7isit
a0road as a mem0er of a trade delegation sponsored 0 the %ederal Eo7ernment;
+x7iii- an expenditure +not 0eing in the nature of capital expenditure or personal expenses of the
assessee- laid out or expended wholl and exclusi7el for the purpose of such 0usiness or
profession;
8Pro7ided that# where a domestic compan has# in an income ear# incurred an
expenditure on ad7ertisement or pu0licit outside Pa!istan in respect of such goods as ma
0e specified 0 the %ederal Eo7ernment 0 notification in the official EaHette and as are
exported in the said income ear# or on furnishing of samples of such goods to a person
outside Pa!istan# deduction in respect of the said expenditure allowa0le under this clause
shall 0e of a sum e5ual to one and one-third times the amount of actual expenditure so
incurred/9
8+xix- an transfer to a participator reser7e created 0 a compan under section '3@ of the
,ompanies "rdinance# '(=: +D*B22 of '(=:-# in accordance with an agreement relating to
participator redeema0le capital entered into 0etween the compan and a 0an!ing compan
as defined in the Aan!ing $ri0unals "rdinance# '(=:1
Pro7ided that# out of the amount so transferred in an income ear# not more than
fi7e percent of the 7alue of participator redeema0le capital shall 5ualif for deduction
under this su0-section1
Pro7ided further that no deduction shall 0e allowed if the amount of the tax-
exempted accumulation in the participator reser7e exceeds '@ percent of the amount of
participator redeema0le capital;
8+xx- an expenditure incurred 0 an assessee in the purchase of one machine8# with permanent
sealed memor sstem#9 used for recording and printing cash sales made 0 him during the
regular course of his 0usiness1
8 9
Explanation/-
+a- the expression 6an expenditure6# as used in clauses +xii-# +xiii- and +xi7-# includes
expenditure in the nature of capital expenditure; and
+0- the expression 6paid6# as used in this section and sections '=# 8 9 3: and 4'# means
actuall paid or incurred according to the method of accounting upon the 0asis of
which the income is computed/
+3- Where an such premises# 0uilding# machiner# plant# furniture or fittings is or are not
wholl used for the purposes of the 0usiness or profession# an allowance or deduction
30
admissi0le under this section shall 0e restricted to the fair proportional part of the amount
which would 0e allowa0le if such premises# 0uilding# machiner# plant# furniture# or fittings
were wholl so used/
'
8+xxi-9 an interest accrued on or after the first da of &ul# 3@@@# on a non-performing loan
credited to suspense account 0 a 0an!ing compan in accordance with the Prudential
Regulations for 0an!s issued 0 State Aan! of Pa!istan +;-9
3
8+xxii- an interest accrued on# or after# the first da of &ul 3@@' on a non-performing loan credited
to suspense account 0 a De7elopment %inance 2nstitution in accordance with the Prudential
Regulations for 0an!s and such institutions issued 0 the State Aan! of Pa!istan1
Explanation/- %or the purpose of this section the expression >"riginator?# >Special Purpose
Behicle? and >SecuritiHation? shall ha7e the same meaning as are respecti7el assigned to
them in the Assets Aac!ed SecuritiHation
Rules# '(((/9
3:/ De"0#tio' ot !"$i''i.le/- Nothing contained in section 34 shall 0e so construed as to authorise
the allowance or deduction of-
+a- an sum paid on account of an cess# rate or tax le7ied on the profits or gains of an
0usiness or profession or assessed as a percentage# or otherwise on the 0asis# of an such
profits or gains;
+0- an sum paid to a non-resident on account of interest#8fees for technical ser7ices#9
0ro!erage or commission or an other sum chargea0le under the pro7isions of this
"rdinance# unless tax thereon has 0een paid or deducted and paid under section ;@# as the
case ma 0e;
4
8+c- an sum paid to an person on account of salar# interest or profit# ser7ices rendered#
0ro!erage or commission or rent of house propert on which tax is deducti0le under section
;@# unless such tax has 0een paid or deducted and paid under section ;@# as the case ma
0e;9
:
8+cc- an expenditure or allowance which results directl or indirectl in the pro7ision of salaries
of directors of a domestic compan# not 0eing a pu0lic compan as defined in the %irst
Schedule which exceeds
;
8fort9 per cent of total income of the compan 0efore the charge
of such expenditure or allowance1
Pro7ided that the deduction in respect of the aggregate of such expenditure or allowance in
respect of an director shall not exceed#-
'
,l/+xxi- ins/ 0 %/"/ 3@@@/
3
,l/ +xxii- ins/ 0 %/"/3@@'/
4
,l/ +c- su0s/ 0 %/A/ '((;
:
,l/ +cc- ins/ 0 %/A/'((@ w/e/f/ assesment ear '(('-(3/
;
Su0s/ for the word >thirt? 0 %/A/'(('/
31
+i- where such expenditure or allowance relates to a period exceeding ele7en months
comprised in an income ear# the amount
'
8three hundred and sixt9 thousand
rupees; and
+ii- where such expenditure or allowance relates to a period not exceeding ele7en
months comprised in an income ear# an amount calculated at the rate of
3
8thirt9
thousand rupees for each month or part thereof comprised in that period1
4
8Pro7ided further that nothing contained in this clause shall appl in respect of an
assessment ear commencing on or after the first da of &ul# '(('/9
+d- an sum paid# on account of interest# 0ro!erage# commission# salar or other remuneration#
0 a firm or an association of persons to an partner of the firm or the mem0er of the
association of persons# as the case ma 0e;
+e- An expenditure 0 wa of head office expenditure# in the case of an assessee# 0eing a non-
resident# in excess of such limits as ma 0e prescri0ed/
Explanation/- As used in this clause# 6head office expenditure6 means executi7e and
general administration expenditure incurred 0 the assessee outside Pa!istan for the
purposes of the 0usiness or profession# including expenditure incurred in respect of-
+a- an rent# local rates and taxes +excluding an foreign tax corresponding to an tax
le7ia0le under this "rdinance-# current repairs or insurance against ris!s of damage
or destruction of an premises outside Pa!istan used for the purposes of the
0usiness or profession;
+0- an salar paid to an emploee emploed 0 the head office outside Pa!istan for the
purposes of the 0usiness or profession;
+c- an tra7elling 0 such emploee for the purposes of 0usiness or profession; and
+d- such other matters connected with executi7e and general administration as ma 0e
prescri0ed;
+f- an allowance in respect of expenditure on entertainment in excess of such limits and in
contra7ention of such conditions as ma 0e prescri0ed;
:
8+ff- an paments# made on or after the first da &ul# '((=# on account of expenditure under a
single account head which# in aggregate# exceed fift thousand rupees made otherwise than
through a crossed 0an! che5ue or 0 a crossed 0an! draft except transactions not exceeding
fi7e hundred rupees or pament account of postage or utilit 0ills1
'
Su0s/ for >two hundred and fort? ibid/
3
Su0s/ for the word >twent? ibid.
4
Pro7iso ins/ 0 %/A/ '((3/
:
,l/ +ff- su0s/ 0 %/A/'((=/ Earlier ins/ 0 %/A/'((@/
32
'
8+fff- Notwithstanding anthing contained in clause +ff-# an pament made on or after the first
da of &ul # '((=# on account off salar if -
+i- 2t exceed fi7e thousand rupees # through a crossed che5ue or transfer to the
emploeeGs 0an! account# or
+ii- 2t dose not exceed fi7e thousand rupees# made through a 0earer che5ue/?
+g- an sum paid to an pro7ident fund# superannuation fund or gratuit fund# not 0eing a
recognised pro7ident fund# an appro7ed superannuation fund or an appro7ed gratuit fund;
+h- an sum paid to an pro7ident fund or other fund esta0lished for the 0enefit of emploees
of the assessee# unless the assessee has made effecti7e arrangements to secure that tax shall
0e deducted at source from an paments made from the fund which are chargea0le to tax
under the head 6Salar6; or
+i- an expenditure incurred 0 an assessee on the pro7ision of per5uisites
3
8#allowances9 or
other 0enefits to an emploee# in excess of
4
8fift9 per cent of his salar excluding
per5uisites
:
8#allowances or other 0enefits91

;
8 9
Explanation/- As used in this clause-
+i- 6salar6 means remuneration or compensation for ser7ices rendered paid# or to 0e paid# at
regular inter7als# and includes dearness or cost of li7ing allowance and 0onus or
commission paa0le to an emploee in accordance with the terms of his emploment as
remuneration or compensation for ser7ices 0ut does not include the emploerGs
contri0ution to a recognised pro7ident fund or an appro7ed superannuation or gratuit fund
or an other sum which does not enter into the computation for pensionar or retirement
0enefits;
+ii- 6per5uisite6# 6emploee6# and 6emploer6 ha7e the same meaning as in su0-section +3- of
section '<; and
+iii- 6other 0enefits6 does not include emploerGs contri0ution to a recognised pro7ident fund or
an appro7ed superannuation or gratuit fund/
<
8+C- an expenditure incurred on account of pament of a fine or penalt for the 7iolation of of
an law# rule or regulation for the time 0eing in force/9
'
,l/+fff- ins/ 0 %/A/ '((=/
3
2ns/ 0 %/A/ '(=@/
4
Su0s/ for >thirt? i0id for assessment ear '(='-=3/
:
2ns/ 0 %/A/'(=@
;
Pro7iso omitted 0 %/A/'((</
<
,l/ +C- ins/ 0 %/ "/ 3@@@/
33
3;/ A$o0t' '0.'eC0etl, re#o5ere" i re'+e#t o& "e"0#tio', et#.- Notwithstanding anthing
contained in this "rdinance# where an allowance or deduction has 0een made under section 34 for an
ear in respect of an loss# 0ad de0t#
'
8interest credited to suspense account#9 expenditure or trading
lia0ilit incurred 0 the assessee# and su0se5uentl#-
+a- during an income ear# the assessee has recei7ed# whether in cash or in an other manner
whatsoe7er# an amount in respect of such loss or 8 9 expenditure# the amount so recei7ed
shall 0e deemed to 0e income from 0usiness or profession of that income ear;
8+aa- during an income ear# the assessee has recei7ed# whether in cash or in an other manner
whatsoe7er# an amount in respect of such 0ad de0t#-
+i- where the said amount is greater than the difference 0etween the whole of such 0ad
de0t and the amount of 0ad de0t allowed as deduction under section 34# the excess
shall 0e deemed to 0e income from 0usiness or profession of that income ear; and
+ii- where the said amount is less than the difference 0etween the whole of such 0ad
de0t and the amount of 0ad de0t allowed as deduction under section 34# the
deficienc shall 0e deemed to 0e a 0usiness expense of that ear;
3
8+a0-- during the income# the assessee has recei7ed# whether in cash or in an other manner
whatsoe7er# an amount in respect of a loan referred to in clause +xxi- of su0-section +'- of
section 34# the amount so recei7ed shall 0e deemed to 0e income from 0usiness or
profession of that income ear# pro7ided that such amount does not exceed the interest
recei7a0le in respect of the aforesaid loan;9
+0- during an income ear# the assessee has deri7ed an 0enefit in respect of such trading
lia0ilit# the 7alue of such 0enefit shall 0e deemed to 0e income from 0usiness or
profession of that income ear;
+c- such trading lia0ilit or a portion thereof is found not to ha7e 0een paid within three ears
of the expiration of the income ear in which it was allowed# such lia0ilit or portion
thereof# as the case ma 0e# shall 0e deemed to 0e income from 0usiness or profession of
the ear in which such finding is made or an other ear +not 0eing a ear commencing
after the expiration of fi7e ears from the end of the said three ears- as the 8Deput
,ommissioner9 ma thin! fit;
8+d- where an amount accumulated in the participator reser7e of a compan which has 0een
allowed as a deduction under clause +xix- of su0-section +'- of section 34 is applied 0 the
compan towards an purpose other than pament of share of profit on the participator
redeema0le capital or towards an purpose not allowa0le for deduction or exemption under
this "rdinance# the amount so applied shall 0e added to the income of the compan in the
income ear during which it is so applied#
and the 0usiness or profession in respect of which such allowance or deduction was made shall# for the
purposes of section 33# 0e deemed to 0e carried on 0 the assessee in that ear1
'
Words etc/ ins/ 0 %/ "/ 3@@@/
3
,l/ +a0- ins/ 0 %/ "/ 3@@@/
34
Pro7ided that where a trading lia0ilit referred to in clause +c- is paid in a su0se5uent ear# the amount so
paid shall 0e deducted in computing the income in respect of that ear/
3</ Special pro7isions regarding 0usiness of insurance and production of oil and natural gas and
exploration and extraction of other mineral deposits8# etc/9- Notwithstanding anthing contained in this
"rdinance#-
+a- the profits and gains of an 0usiness of insurance and the tax paa0le thereon shall 0e
computed in accordance with the rules contained in the %ourth Schedule;
+0- the profits and gains from the exploration and production of petroleum +including natural
gas- 8and from refineries to 0e set up at Dhoda! and Ao0i fields; income from exploration
and production companies from pipeline operations# and manufacture and sale of li5uefied
gas or compressed natural gas9 and the tax paa0le thereon shall 0e computed in
accordance with the rules contained in Part 2 of the %ifth Schedule;
8Pro7ided that nothing in this clause shall appl to the profits and gains attri0uta0le
to the production of petroleum +including natural gas- which was disco7ered 0efore the
twent-fourth da of Septem0er# '(;:; and
+c- the profits and gains of an 0usiness which consists of# or includes# the exploration and
extraction of such mineral deposits of a wasting nature +not 0eing petroleum and natural
gas- as ma 0e specified in this 0ehalf 0 the %ederal Eo7ernment carried on 0 an
assessee in Pa!istan shall 0e computed in accordance with the rules contained in Part 22 of
the %ifth Schedule1
Pro7ided that nothing contained in this clause shall appl in the case of an assessee whose
income has at an time 0een exempt from tax under clause +'34A- of Part 2 of the Second
Schedule/
%7. C!+it!l 2!i'.1 (1) A, +ro&it' or 2!i' !ri'i2 &ro$ the tr!'&er o& ! #!+it!l !''et 'h!ll .e
#h!r2e!.le 0"er the he!" *C!+it!l 2!i'* !" 'h!ll .e "ee$e" to .e i#o$e o& the i#o$e ,e!r i
/hi#h the tr!'&er too- +l!#e.
+3- %or the purposes of su0-section +'- and section 3= and 3(#-
+a- 6capital asset6 does not include-
+i- an asset or class of assets in respect of which the assessee is entitled to an
allowance for depreciation under the $hird Schedule; and
+ii- an immo7a0le propert; and
(.) *tr!'&er* i#l0"e' the '!le, "i'+o'itio, ex#h!2e or reliC0i'h$et o& the !''et, or
the exti20i'h$et o& !, ri2ht' therei, 0ut does not include -
+i- an transfer 0 reason of the compulsor ac5uisition of an capital asset under an
law for the time 0eing in force;
35
+ii- an transfer of a capital asset under a gift# 0e5uest or will or an irre7oca0le trust;
+iii- an distri0ution of the assets of a compan to its shareholders on its li5uidation; and
+i7- an distri0ution of capital assets on the dissolution of a firm or other association of
persons or the partition of a Hindu undi7ided famil/
3=/ Co$+0t!tio o& #!+it!l 2!i'/- +'- 2n computing the income under the head 6,apital gains6# the
cost of ac5uisition of the capital asset and an expenditure incurred wholl and exclusi7el in connection
with the transfer thereof shall 0e deducted/
+3- $he pro7isions of section 3: shall# so far as ma 0e# appl to the allowances and deductions under this
section as the appl to the allowances and deductions in respect of income chargea0le under the head
62ncome from 0usiness or profession6/
3(/ Co't o& !#C0i'itio, !" #o'i"er!tio &or tr!'&er, ho/ "eter$ie"/- +'- Where the capital
asset 0ecame the propert of the assessee-
+a- under a gift# 0e5uest or will; or
+0- 0 succession# inheritance or de7olution; or
+c- on an distri0ution of assets on the dissolution of a firm or other association of persons or
the partition or a Hindu undi7ided famil; or
+d- on an distri0ution of assets on the li5uidation of a compan; or
+e- under a transfer to a re7oca0le or an irre7oca0le trust#
the fair mar!et 7alue of the asset# as on the date on which it 0ecame the propert of the assessee# shall# for
the purposes of su0-section +'- of section 3=# 0e deemed to 0e the cost of ac5uisition/
+3- Where the person who ac5uires a capital asset from an assessee is directl or indirectl connected with
him and the 8Deput ,ommissioner9 has reason to 0elie7e that the transfer was effected with the o0Cect of
a7oiding or reducing the lia0ilit of the assessee# the fair mar!et 7alue of the capital asset# as on the date
of the transfer# shall 0e deemed to 0e the consideration recei7ed 0 the assessee for its transfer/
+4- %or the purposes of su0-section +'- and +3- and su0-section +'3- of section '3# 6fair mar!et 7alue6
means-
+a- the price which the capital asset would ordinaril fetch on sale in the open mar!et on the
rele7ant date; and
+0- where the price referred to in clause +a- is not ascertaina0le# such price as ma 0e
determined 0 the 8Deput ,ommissioner9 after o0taining the appro7al of the 2nspecting
8Additional ,ommissioner9 in writing/
36
4@/ I#o$e &ro$ other 'o0r#e'/- +'- 2ncome of e7er !ind which ma 0e included in the total income
of an assessee under this "rdinance shall 0e chargea0le under the head 62ncome from other sources6# if it
is not included in his total income under an other head/
+3- 2n particular# and without preCudice to the generalit of the pro7isions of su0-section +'-# the
following incomes shall# sa7e as otherwise pro7ided in this "rdinance# 0e chargea0le under the head
62ncome from other sources6# namel1-
+a- di7idend;
+0- interest# roalties and fees for technical ser7ices;
+c- ground rent;
+d- income from the hire of machiner# plant or furniture 0elonging to the assessee and also of
0uildings 0elonging to him if the letting of the 0uildings is insepara0le from the letting of
the said machiner# plant or furniture; and
+e- an income to which su0-section +'3- of section '3 or section '4 applies/
4'/ De"0#tio'/- +'- 2n computing the income under the head 62ncome from other sources6# the
following allowances and deductions shall 0e made# namel1-
+a- in the case of di7idends# an sum paid 0 wa of commission to a 0an!ing compan
realising such di7idends on 0ehalf of the assessee;8 9
+0- an expenditure +not 0eing in the nature of capital expenditure or personal expenses of the
assessee- laid out or expended wholl and exclusi7el for the purpose of earning such
income8; and9
8+c- in the case of income to which clause +d- of su0-section +3- of section 4@ applies# an
allowance or deduction computed in accordance with the pro7isions of clauses +iii-# +i7-
and +7- of su0- section +'- of section 34;9
+3- Nothing contained in su0-section +'- shall appl-
+a- to an such sum paid or expenditure laid out or expended which is alloca0le to an income
exempt from tax under this "rdinance;
+0- in computing the income 0 wa of di7idends in the case of an assessee# 0eing a foreign
compan/
+4- $he pro7isions of section 3: shall# so far as ma 0e# appl to the allowance and deductions under this
section as the appl to the allowance and deductions in respect of income chargea0le under the head
62ncome from 0usiness or profession6/
+:- Notwithstanding anthing contained in su0-section +'- or sections 33 and 34# in the case of an
assessee# 0eing a foreign compan 8or a foreign association9# the income 0 wa of roalt 8 9recei7ed
from a Pa!istani concern in pursuance of an agreement made 0 the foreign compan 8or the foreign
37
association# as the case ma 0e#9 with the Pa!istani concern shall 0e computed in such manner as ma 0e
prescri0ed/
43/ Metho" o& !##o0ti2/- +'- 2ncome# profits and gains 8except income from di7idends#9 shall 0e
computed for purposes of sections ')# '(# 33# 3) and 4@ in accordance with the method of accounting
regularl emploed 0 the assessee/
+3- Notwithstanding anthing contained in su0-section +'-# the ,entral Aoard of Re7enue ma# in the case
of an 0usiness or profession# or class of 0usiness# or profession# or an other source of income or an
class of persons#-
+a- re5uire# 0 a general or special order pu0lished in the official EaHette that the accounts
shall 0e maintained in such form and in such manner as ma 0e prescri0ed; and
+0- prescri0e the manner in which paments of commercial nature shall 0e made or
commercial transactions recorded#
and thereupon# the income# profits and gains of the assessee shall 0e computed on the 0asis of the accounts
or records maintained or paments made accordingl/
+4- Where no method of accounting has 0een regularl emploed# or if the method emploed is such that#
in the opinion of the 8Deput ,ommissioner9# the income# profits and gains cannot 0e properl deducted
therefrom# or where# in an case to which su0-section +3- applies# the assessee fails to maintain accounts#
ma!e paments or record transactions in the form or manner# as the case ma 0e# prescri0ed under the said
su0-section# then# the income# profits and gains of the assessee shall 0e computed on such 0asis and in
such manner as the Deput ,ommissioner thin!s fit/
8+:- %or the purpose of su0-section +4-# where the ,entral Aoard of Re7enue deems necessar# it ma# 0 a
general or special order prescri0e rates of net profit or gross profit and conditions of their applica0ilit in
respect of an trade# 0usiness or profession for an assessment ear or ears1
Pro7ided that such rates shall 0e applica0le in case of an assessee at his option to 0e exercised in writing
0efore the finalisation of assessment proceedings for an assessment ear/9
843A/ Do#0$et', #erti&i#!te', et#., to .e &0ri'he" ., #ert!i #o$+!ie'/- +'- E7er pri7ate compan
as defined in the ,ompanies Act# '('44 +B22 of '('4-# whose paid up capital on the last da of an
income ear is 8fi7e hundred thousand9 rupees or more shall# with the return of total income for that ear#
furnish a cop of the 0alance sheet and profit and loss account for that ear and 8an auditorsG report for
that ear# in %orm 4;A of the ,ompanies +Eeneral Pro7isions and %orms- Rules# '(=;# prepared and
signed9 0 a person who is a ,hartered Accountant within the meaning of the ,hartered Accountants
"rdinance# '(<' +D of '(<'-# or a cost and management accountant within the meaning of the ,ost and
.anagement Accountants Act# '(<< +D2B of '(<<-/
+3- Where a compan has not complied with the re5uirements of su0-section +'-# its income# profits and
gains shall 0e computed upon such 0asis and in such manner as the Deput ,ommissioner ma
determine/9

44/ A''e''$et o& ro,!ltie' or #o+,1ri2ht &ee' &or liter!r, or !rti'ti# /or-/- Where the time ta!en
0 the author of a literar or artistic wor! in the ma!ing thereof exceeds twent-four months# the amount
38
recei7ed 0 him during an income ear in lump-sum on account of an roalties or cop-right fees in
respect of that wor!# shall# if he so claims# 0e deemed to 0e the income of the income ear in which it is
recei7ed and the two immediatel preceding income ears and shall 0e allocated thereto in e5ual
proportions and all the pro7isions of this "rdinance shall appl accordingl/
4:/ Set1o&& o& lo''e'/- Where an assessee sustains a loss +not 0eing a loss to which section 4< or
section 4) applies- in an assessment ear under an head of income specified in section ';# he shall8#
su0Cect to clause +7- of su0-section +'- of section 349 0e entitled to ha7e the amount of the loss set-off
against his income +other than income to which su0-section +)- or +(- of section '3 applies-# if an# under
an other head assessa0le for that assessment ear/
84:A/ Set1o&& o& lo''e' o& #ert!i #o$+!ie'/- +'- Where an assessee# 0eing a compan listed on a
registered stoc! exchange in Pa!istan# owns the entire share capital of another compan +hereinafter called
the Ksu0sidiar companG- in an income ear# 0eing an income ear rele7ant to the assessment ear
ending on the thirtieth da of &une# '(=3# or an assessment ear thereafter# the loss of the su0sidiar
compan under the head F2ncome from 0usiness or professionG +not 0eing a loss on account of
depreciation allowed under clause +7- of su0-section +'- of section 34 or a loss to which section 4<
applies- in respect of the said assessment ear as has 0een determined 0 an order under section <3# <4 or
<; and as had not 0een set-off under section 4:: shall# at the option of the assessee and su0Cect to the
pro7isions of su0-section +3-# 0e set-off against the income# if an# of the assessee in respect of the said
assessment ear# and where the said loss cannot wholl 0e so set-off# so much of the loss as had not 0een
set-off# or the whole of the loss where the assessee has no income chargea0le to tax in that ear# shall 0e
carried forward 0 the su0sidiar compan in accordance with the pro7isions of section 4;; and the said
loss of the su0sidiar compan in respect of the two assessment ears immediatel succeeding the said
assessment ear shall# at the option of the assessee# 0e set-off and carried forward in the manner as
aforesaid1
Pro7ided that nothing contained in this su0-section shall pre7ent the assessee from claiming set-off
of the said loss of the su0sidiar compan in respect of the said assessment ear or ears if it has not 0een
determined as aforesaid at the time of filling of return or returns of income 0 the assessee in respect of
the said assessment ear or ears/
+3- Nothing contained in su0-section +'- shall appl unless-
+a- income of the su0sidiar compan under the head K2ncome from 0usiness or professionG is
lia0le to tax under this "rdinance in the income ear in which it has sustained loss under
that head;
+0- a scheme for the profita0le operation of the 0usiness of the su0sidiar compan su0mitted
0 the assessee has 0een appro7ed# 0efore the commencement of the income ear referred
to in su0-section +'-# 0-
+i- the Pa!istan 2ndustrial ,redit and 2n7estment ,orporation *imited;
+ii- the 2ndustrial De7elopment Aan! of Pa!istan;
+iii- the National De7elopment %inance ,orporation; or
+i7- the Aan!ers E5uit *imited; and
39
+c- the assessee has# 0 the first da of "cto0er of the assessment ear or ears referred to in
su0-section +'-# su0mitted to the institution to which the said scheme was su0mitted 0 the
assessee a report on the implementation of the scheme referred to in clause +0-/9
4;/ C!rr, &or/!r" o& .0'ie'' lo''e'/- Where an assessee sustains a loss in an assessment ear
under the head F2ncome from 0usiness or professionG+not 0eing a loss to which section 4< applies- and the
loss cannot 0e wholl set-off under section 4:# so much of the loss as has not 0een set-off# or the whole of
the loss where the assessee has no income under an other head# shall 0e carried forward 8# su0Cect to
clause +7- of su0-section +'- of section 34#9 to the following assessment ear and set-off against the profits
and gains# if an# of such 0usiness or profession assessa0le for that ear if such 0usiness profession
continues to 0e carried on 0 the assessee for that assessment ear; and if the loss cannot 0e wholl set-off
in this manner# the amount of the loss not so set-off shall 0e carried forward to the following assessment
ear# and so on# 0ut no loss shall 0e carried forward to more than six assessment ears immediatel
succeeding the assessment ear for which the loss was first computed1
8Pro7ided that# where the said loss relates to an assessment ear commencing on or after the first
da of &ul# '()<# and is sustained 0 an such assessee# 0eing the owner of an industrial unit which is
declared sic! and is 0eing reha0ilitated under a scheme appro7ed 0 the %ederal Eo7ernment# as ma 0e
notified 0 the ,entral Aoard of Re7enue in the official EaHette# this section shall ha7e effect as if for the
words 6six assessment ears6 the words 6ten assessment ears6 were su0stituted/
4</ S+e#0l!tio lo''e'/- +'- Where an assessee sustains a loss in an assessment ear in respect of an
speculation 0usiness carried on 0 him# it shall not 0e set-off# except against profits or gains# if an# of
another speculation 0usiness carried on 0 him and assessa0le for that assessment ear/
+3- Where# for an assessment ear# an loss computed in respect of a speculation 0usiness has not 0een
wholl set-off under su0-section +'-# so much of the loss as is not so set-off# or the whole of the loss where
the assessee has no income from an other speculation 0usiness# shall 0e carried forward to the following
assessment ear and set-off against the profits and gains# if an# of speculation 0usiness carried on 0 him
and assessa0le for that assessment ear; and if the loss cannot 0e wholl set-off in this manner# the amount
of the loss not so set-off shall 0e carried forward to the following assessment ear and so on# 0ut no loss
shall 0e carried forward for more than six assessment ears immediatel succeeding the assessment ear
for which the loss was first computed/
Explanation.- $he expression >speculation 0usiness?# as used in this section and section 33# means
0usiness in which a contract for the purchase and sale of an commodit +including stoc!s and shares- is
periodicall or ultimatel settled otherwise than 0 the actual deli7er or transfer of the commodit or
Iscripts# 0ut does not include 0usiness in which -
+a- a contract in respect of raw materials or merchandise is entered into 0 a person in the
course of his manufacturing or mercantile 0usiness to guard against loss through future
price fluctuations for the purpose of fulfilling his other contracts for the actual deli7er of
the goods to 0e manufactured or the merchandise to 0e sold 0 him;
+0- a contract in respect of stoc!s and shares is entered into 0 a dealer or in7estor therein to
guard against loss in his holdings of stoc!s and shares through price fluctuations; and
40
+c- a contract is entered into 0 a mem0er of a forward mar!et or a stoc! exchange in the
course of an transaction in the nature of Co00ing or ar0itrage to guard against loss which
ma arise in the ordinar course of his 0usiness as such mem0er/
4)/ C!+it!l lo''e'/- Where an assessee sustains a loss in an assessment ear under the head 6,apital
gains6# such loss shall 0e carried forward to the following assessment ear and set-off against the capital
gains chargea0le for that assessment ear under the said head# and if it cannot 0e set-off in this manner#
the amount of the loss not so set-off shall 0e carried forward to the following assessment ear# and so on#
0ut no loss shall 0e carried forward for more than six assessment ears immediatel succeeding the
assessment ear for which the loss was first computed1
Pro7ided that where the loss sustained 0 an assessee in an income ear does not exceed fi7e
thousand rupees# it shall not 0e carried forward and# where it exceeds fi7e thousand rupees# onl so much
of such loss shall 0e carried forward as exceeds fi7e thousand rupees1
Pro7ided further that as respects the assessments for the ears 0eginning on the first da of &ul#
'(); and ending on the thirtieth da of &une# 8'(=:9 this section shall ha7e effect as if the assessment ear
0eginning on the first da of &ul# 8'(=:9 were the next following assessment ear to an assessment ear
ending at an time 0etween the thirtieth da of &une# '();# and the thirtieth da of &une# 8'(=49 and the
first pro7iso were omitted1
8Pro7ided further that as respect the assessments# in respect of loss arising from sale of shares of a
pu0lic compan +as defined in the %irst Schedule-# for the ears 0eginning on the first da of &ul# '(=:#
and ending on the thirtieth da of &une# '(=(# this section shall ha7e effect as if the assessment ear
0eginning on the first da of &ul# '(=(# were the next following assessment ear to an assessment ear
ending at an time 0etween the thirtieth da of &une# '(=:# and the thirtieth da of &une# '(==# and the first
pro7iso were omitted/
4=/ Li$it!tio' !' to 'et1o&& !" #!rr, &or/!r" o& lo''e' i the #!'e o& &ir$', +!rter', et#. - +'-
Where the assessee is a registered firm# an loss which cannot 0e set-off against an other income of the
firm shall 0e apportioned among the partners of the firm and the alone shall 0e entitled to ha7e the
amount of the loss set-off and carried forward for set-off under sections 4:# 4;# 4< and 4)/
+3- Nothing contained in section 4;# su0-section +3- of section 4< or section 4) shall entitle an
assessee# 0eing a registered firm# to ha7e its loss carried forward and set-off under the pro7isions of the
aforesaid sections/
+4- 2n the case of an unregistered firm assessed as a registered firm under the pro7isions of su0-clause
+ii- of clause +0- of su0-section +'- of section <( in respect of an assessment ear# its losses for that
assessment ear shall 0e dealt with as if it were a registered firm/
+:- Where the assessee is an unregistered firm which has not 0een assessed as a registered firm under
the pro7isions of su0-clause +ii- of clause +0- of su0-section +'- of section <(# an loss of the firm shall 0e
set-off or carried forward and set-off onl against the income of the firm/
+;- Nothing contained in sections 4:# 4;# 4< and 4) and su0-sections +'-# +3-# +4- and +:- of this section
shall entitle-
41
+a- an partner of an unregistered firm which has not 0een assessed as a registered firm under
the pro7isions of su0-clause +ii- of clause +0- of su0-section +'- of section <(# or an
mem0er of an association of persons to set-off an loss sustained 0 such firm or
association of persons# as the case ma 0e# or ha7e it carried forward and set-off# against
his income; or
+0- an firm in the constitution of which an change has occurred to ha7e carried forward and
set-off so much of the loss proportionate to the share of a retired or deceased partner
computed in accordance with the pro7isions of su0-section +:- of section <( as exceed his
share of profits if an# of the income ear in the firm# or entitle an partner to the 0enefit of
an portion of the said loss which is not apportiona0le to him under section <(; or
+c- an person who has succeeded# in such capacit# an other person carring on an 0usiness
or profession# otherwise than 0 inheritance# to carr forward and set off against his
income# an loss sustained 0 such other person/
+<- Where# in ma!ing an assessment for an ear# full effect cannot 0e gi7en to the allowances
referred to in clause +7- of su0-section +'- of section 34 owing to there 0eing no profits or gains chargea0le
for that ear or such profits or gains 0eing less than the allowance# then# su0Cect to 8clause +7- of su0-
section +'- of section 34 and9 the pro7isions of su0-section +)-# the allowance or part of the allowance to
which effect has not 0een gi7en# as the case ma 0e# shall 0e added to the amount of the allowance for
depreciation for the following ear and 0e deemed to 0e part of that allowance# or if there is no such
allowance for that ear# 0e deemed to 0e the allowance for that ear and so on for succeeding ears/
+)- Where# under su0-section +<-# depreciation allowance is also to 0e carried forward# effect shall first
0e gi7en to the pro7isions of section 4; and su0-section +3- of section 4</
+=- Notwithstanding anthing contained in this "rdinance# no loss which has not 0een determined in
pursuance of an order made under section ;(# 8;(A#9 <3# <4 or <; shall 0e carried forward and set-off
under section 4;# su0-section +3- of section 4< or section 4)/
42
CHAPTER
ALLODANCES AND RELIEFS
4(/ Allo/!#e &or li&e i'0r!#e.1 +'- Su0Cect to the pro7isions of section :;#-
+a- an assessee# 0eing an indi7idual# shall 0e entitled to an allowance for life insurance in
respect of an premium paid 0 h in an income ear to effect an insurance# including a
contract for deferred annuit# on his own life or the life of his spouse; and
+0- where the assessee is a Hindu undi7ided famil# it shall 0e entitled to an allowance for life
insurance in respect of an premium paid 0 it in the income ear to effect an insurance on
the life of an male mem0er of the famil or the wife of an such male mem0er/
+3- $he pro7isions of su0-section +'- shall not appl#/
+a- in respect of so much of an premium paid to effect an insurance other than a contract for
deferred annuit as exceeds ten percent of the capital sum assured; and
+0- unless the premium and the proceeds of the life insurance polic or the contract for
deferred annuit# as the case ma 0e# are 0oth paa0le in Pa!istan/
+4- Where an insurance polic to which su0-section +'- applies lapses or is surrendered or paid up
within thirt-six months of the date on which it 0ecame effecti7e# then# notwithstanding anthing
contained in this "rdinance# the amount of tax paa0le 0 the assessee under the other pro7isions of this
"rdinance in respect of the income ear in which such polic lapses or is surrendered or paid up# as the
case ma 0e# shall 0e increased 0 an amount e5ual to the relief in tax allowed to the assessee in respect
of such polic +hereinafter referred to as the Fsaid amountN- and the sum so arri7ed at# or where no tax is
paa0le 0 the assessee under the other pro7isions of this "rdinance in respect of that income ear# the
said amount/ shall 0e deemed to 0e the tax paa0le in respect of that income ear and all the pro7isions of
this "rdinance shall# so far as ma0e# appl accordingl
+:- No order under su0-section +4- shall 0e made without gi7ing the assessee a reasona0le opportunit of
0eing heard/
:@/ Allo/!#e &or #otri.0tio' to Pro5i"et F0"', et#/- Su0Cect to the pro7isions of section :;#
an assessee shall 0e entitled to an allowance in respect of-
+a- an sum deducted in the income ear from the salar paa0le to him 0 Eo7ernment# 0eing
a sum deducted in accordance with the conditions of his ser7ice# for the purpose of
securing to him a deferred annuit or ma!ing pro7ision for his wife or children# in so far as
the sum so deducted does not exceed twent percent of the salar/
43
+0- an contri0ution made 0 him in the income ear to an pro7ident fund to which the
Pro7ident %unds Act# '(3; +D2D "f '(3;- applies;
+c- an contri0ution +not exceeding twent per cent of his salar- made 0 him in the income
ear to a recognised pro7ident fund/
Explanation/- As used in this clause 6salar6 shall ha7e the meaning assigned to it in clause
+h- of rule ': of Part 2 of the Sixth Schedule;
+d- an contri0ution made 0 him in the income ear to an appro7ed superannuation fund/
:'/ Allo/!#e &or i5e't$et i De&e#e S!5i2' !" NIT Certi&i#!te', et#/- +'- Su0Cect to the
pro7isions of section :;# an assessee +not 0eing a compan- shall 0e entitled to an allowance in respect of
an sum in7ested 0 him in the income ear in the purchase of-
+a- Defence Sa7ings ,ertificates;
+0- Mnit +$rust- certificates +not 0eing Aearer ,ertificates- issued 0 the National 2n7estment
+Mnit- $rust of Pa!istan and such Eo7ernment Securities +including De7elopment *oans-
as ma 0e specified 0 the ,entral Aoard of Re7enue in this 0ehalf;
+c- ,ertificates +other than ,ertificates ac5uired 0 purchase or otherwise from a pre7ious
holder thereof- of .utual %unds issued 0 the 2n7estment ,orporation of Pa!istan;
+d- such shares of such Pa!istani in7estment companies +other than shares ac5uired 0
purchase or otherwise from a pre7ious holder thereof- as ma 0e specified 0 the ,entral
Aoard of Re7enue for the purposes of this clause;
+e- such de0entures or de0entures stoc! +other than de0entures or de0enture stoc! ac5uired 0
purchase or otherwise from a pre7ious holder thereof- issued 0 such pu0lic companies as
ma 0e appro7ed 0 the ,entral Aoard of Re7enue for the purposes of this clause; 8 9
+f- such stoc!s and shares +other than stoc!s and shares ac5uired 0 purchase or otherwise
from a pre7ious holder thereof- of such a Pa!istani industrial pu0lic compan as ma 0e
appro7ed 0 the ,entral Aoard of Re7enue for the purposes of this clause/
Explanation/- As used in this clause# and su0-section +3- of section :4# 6Pa!istani industrial
pu0lic compan6 means a pu0lic compan 8within the meaning of clauses +a- and +0- of
su0-paragraph +3- of paragraph A of Part 2B of the %irst Schedule9 which is formed for the
purpose of# or is actuall engaged in# the carring on of an industrial underta!ing set up in
Pa!istan on or after the fourteenth da of August# '(:)# pro7ided such underta!ing +i- is
owned 0 such compan and +ii- fulfils the conditions specified in clauses +a-# +d- and +e-
of su0-section +3- of section :=; and includes an pu0lic compan engaged in# or formed
for the purpose of# carring on insurance or transport 0usiness or the 0usiness of 0uilding
residential houses for sale in Pa!istan or an 0usiness in the case of a Eo7ernment
sponsored finance corporation appro7ed 0 the ,entral Aoard of Re7enue or the ,ontroller
of ,apital 2ssues for the purposes of this section;
44
8+g- .odara0a ,ertificates +other than ,ertificates ac5uired 0 purchase or otherwise from a
pre7ious holder thereof- of a modara0a of specific 7alue issued 0 a modara0a compan;
+h- .odara0a certificates of a modara0a of non-specific 7alue issued 0 a modara0a compan;
and Participation $erm ,ertificates +other than ,ertificates ac5uired 0 purchase or
otherwise from a pre7ious holder thereof- issued 0 a compan/9
8+'A- Notwithstanding anthing contained in su0-section +'-# the ,entral Aoard of Re7enue ma# in the
case of an compan appling for appro7al# grant appro7al under this section 0efore the industrial
underta!ing for the purpose of which it is formed is set up or has commenced commercial production or
ma grant appro7al from such date# whether preceding or following the date on which the appro7al is
granted# as it ma specif in this 0ehalf/9
8 9
+4- Where an 8certificate# securit# share# de0enture or de0enture stoc! +hereinafter referred to as the
F,ertificateG- to which clauses +a-# +0-# +d-8# +e-# +h- and +i-9 of su0-section +'-9 applies and in respect of
which an relief in tax has 0een allowed to the assessee is disposed of 0 sale# transfer or in an other
manner within thirt-six months of the date of its purchase# then# notwithstanding anthing contained in
this "rdinance the amount of tax paa0le 0 the assessee under the other pro7isions of this "rdinance in
respect of the income ear in which such ,ertificate was so disposed of shall 0e increased 0 an amount
e5ual to the relief in tax allowed to the assessee in respect of such ,ertificate +hereinafter referred to as the
Fsaid amountG-# and the sum so arri7ed at or# where no tax is paa0le 0 the assessee under the other
pro7isions of this "rdinance in respect of that income ear# the said amount shall 0e deemed to 0e the tax
paa0le in respect of that income ear and all the pro7isions of this "rdinance shall# so far as ma 0e#
appl accordingl/
8+4A- Where a compan has 0een appro7ed for purposes of clause +f- of su0-section +'- on the 0asis of an
underta!ing gi7en 0 such compan to the effect that its shares shall 0e made su0Cect of dealing in a
registered stoc! exchange in Pa!istan within the period specified in the said underta!ing# and it is
su0se5uentl found that the said compan has not complied with the terms of the said underta!ing# the
,entral Aoard of Re7enue ma cancel the appro7al alread gi7en from the date it too! effect# and the
amount of tax paa0le 0 an assessee under the other pro7isions of this "rdinance in respect of the income
ear in which the appro7al was cancelled shall 0e increased 0 an amount e5ual to the relief in tax allowed
to the assessee in respect of the purchase of stoc!s and shares of the said compan# and the sum so arri7ed
at or# where no tax is paa0le 0 the assessee under the other pro7isions of this "rdinance in respect of
that income ear# the said amount shall 0e deemed to 0e the tax paa0le in respect of that income ear and
all the pro7isions of this "rdinance shall# so far as ma 0e# appl accordingl/
+:- No order under 8su0-sections +4- and +4A-9shall 0e made without gi7ing the assessee a reasona0le
opportunit of 0eing heard/
+;- $he ,entral Aoard of Re7enue ma ma!e rules regulating the procedure for the grant of appro7al
under this section and an other matter connected with# or incidental to# the operation of this section/
'
861A. Allo/!#e &or i5e't$et i 'h!re'/- +'- An assessee# other than a compan# shall 0e entitled to
an allowance not exceeding ten per cent of his income or one hundred thousand rupees# whiche7er is the less#
'
Sec/ :'A ins/ 0 %/"/3@@'/
45
in7ested in the income ear commencing on or after the first da of &ul# 3@@'# in the purchase of new shares
offered to the pu0lic 0 a pu0lic compan listed on a stoc! exchange in Pa!istan pro7ided that the assessee is
the original allottee of such shares# or listed shares# sold 0 the Pri7atiHation ,ommission of Pa!istan/
+3- Where an share to which su0-section +'- applies and in respect of which an relief in tax has 0een
allowed to the assessee is disposed of 0 sale# transfer or in an other manner within twel7e months of the
date of its purchase# then# notwithstanding anthing contained in this "rdinance# the amount of tax paa0le 0
the assessee under the other pro7isions of this "rdinance in respect of the income ear in which such share
was so disposed of shall 0e increased 0 an amount e5ual to the relief in tax allowed to the assessee in respect
of such shares +hereinafter referred to as the Fsaid amountN-# and the sum so arri7ed at or# where no tax is
paa0le 0 the assessee under the other pro7ision of this "rdinance in respect of that income ear# the said
amount shall 0e deemed to 0e the tax paa0le in respect of that income ear and all the pro7isions of this
"rdinance shall# so far as ma 0e# appl accordingl/
'
866AA. Retire$et !0it, '#he$e/- +'- Where an indi7idual# 0eing a resident of Pa!istan# is +or would
0ut for the loss of profit or gains# 0e- chargea0le to tax#-
+a- in respect of an salar or remuneration from an office or emploment held 0 him which is
not a pensiona0le office or emploment or which does not pro7ide an other retirement
0enefits; or
+0- in respect of profit and gains# accruing or arising# from an 0usiness or profession carried on
0 him#
he shall 0e entitled to an allowance in respect of an sum paid 0 him in the income ear commencing on or
after the first da of &ul# 3@@'# 0 wa of contri0ution or premium under a contract of annuit scheme
appro7ed 0 SE,P of an insurance compan dul registered under the 2nsurance "rdinance# 3@@@ +DDD2D
of 3@@@-# ha7ing for its main o0Cect the pro7ision to the assessee of an annuit in old age/
+3- $he amount of allowance under su0-section +'- in a ear shall not exceed fi7e per cent of the income
or fift thousand rupees whiche7er is the less/
+4- No allowance shall 0e made under su0-section +'- in respect of a contract which pro7ides
+a- for the pament during the life of the assessee of an sums 0esides the sums paa0le as
annuit;
+0- for the annuit paa0le to the assessee to commence 0efore he attains the age of sixt ears;
+c- that the annuit shall 0e capa0le in whole or in part# of surrender# commutation or assignment;
or
+d- for pament of the annuit outside Pa!istan/
66AAA.1 Allo/!#e &or $!r- 0+ +!i".1 +'- An assessee shall 0e entitled to an allowance in respect of
an mar! up paid 0 him in an income ear on a loan sanctioned and ad7anced on# or after# the first da of
&ul# 3@@'# not exceeding six hundred thousand rupees 0 a Scheduled Aan! under a house finance scheme
'
Secs/ :'AA J:'AAA ins/ 0 %/"/3@@'/
46
appro7ed 0 the State Aan! of Pa!istan or ad7anced 0 Eo7ernment or a local authorit or House Auilding
%inance ,orporation1
Pro7ided that
+a- the maximum amount eligi0le for an allowance shall not exceed
twent fi7e per cent of the income or fift thousand rupees O whiche7er is the less;
+0- the loan is utiliHed for construction of new house or the ac5uisition of
a house; and
+c- no deduction for mar! up has 0een claimed under clause +e- or +ee- of
su0-section +'- of section 3@/
:3/ Allo/!#e &or +0r#h!'e o& .oo-'/- 8An9 assessee shall 0e entitled to an allowance in respect of
an sum expended 0 him in the income ear on the purchase of 0oo!s of 8religious or9 professional or
technical nature or of scientific or general !nowledge/
8Pro7ided that purchase receipts is furnished containing National $ax Num0er of the 0oo! seller/ $his
pro7iso shall not appl in case of 0oo!s imported 0 the assessee for his own use/9
:4/ Exe$+tio o& i5e't$et' i the 'h!re1#!+it!l o& !++ro5e" i5e't$et, hol"i2 !"
i"0'tri!l #o$+!ie'/- +'- Su0Cect to the pro7isions of section :;# the tax shall not 0e paa0le 0 an
assessee# not 0eing a compan# on such portion of his total income as is in7ested 0 him in the income
ear on the ac5uisition +otherwise than from the pre7ious shareholders- of the shares of a Pa!istani
compan which fulfils the conditions specified in su0-section +3-/
+3- $he following are the conditions referred to in su0-section +'-# namel1-
+a- that it is-
+i- an in7estment compan; or
+ii- holding compan; or
+iii- Pa!istani industrial pu0lic compan# the share-capital of which is owned# wholl or
in part# and the management of whose affairs is controlled# directl or indirectl# 0
the %ederal Eo7ernment; and
+0- that it is appro7ed 0 the ,entral Aoard of Re7enue for the purposes of this section/
+4- $he ,entral Aoard of Re7enue ma ma!e rules regulating the procedure for the grant of appro7al
under this section and an other matter connected with# or incidental to# the operation of this section/
47
::/- Retire$et !0it, #otr!#t' !" tr0't '#he$e'/-
'
8+'-9 Su0Cect to such rules as ma 0e made in
this 0ehalf# where an indi7idual# 0eing a resident of Pa!istan# is +or would# 0ut for the loss or profits or
gains# 0e- chargea0le to tax-
+a- in respect of an salar or remuneration from an office or emploment held 0 him# which
is not a pensiona0le office or emploment or which does not pro7ide an other retirement
0enefits; or
+0- in respect of profits or gains accruing or arising from an 0usiness or profession carried on
0 him#
he shall# su0Cect to the pro7isions of section :;# 0e entitled to an allowance in respect of an sum paid 0
him in the income ear under a contract of annuit with the State *ife 2nsurance ,orporation of Pa!istan
or the Pa!istan Post "ffice *ife 2nsurance Department ha7ing for its main o0Cect the pro7ision for him of
an annuit in old age# pro7ided such contract is appro7ed 0 the ,ommissioner for the purposes of this
section/
8+3- Nothing contained in this section shall appl to an amount in respect of which an allowance has 0een
made under section ::A/9
8::A/ Retire$et !0it, #otr!#t &or +ro&e''io!l'/- +'- Where an assessee# 0eing an indi7idual who
is resident in Pa!istan# deri7es income from the exercise of a profession as an accountant# actuar# lawer#
architect# medical or 7eterinar phsician or surgeon# or from such other professions as ma 0e notified 0
the ,entral Aoard of Re7enue for the purpose of this section# either independentl or as a partner in a
registered firm carring on such profession# and has paid# out of his income from such profession in an
income ear# an amount in that ear as a premium under an annuit contract scheme# appro7ed 0 the
,entral Aoard of Re7enue# ha7ing for its main o0Cect the pro7ision to the assessee of a life annuit in old
age# he shall# su0Cect to the pro7isions of su0-sections +3-# +4-# +:- and +;-# 0e allowed an allowance in
respect of the said amount in that ear/
+3- $he amount of the allowance under su0-section +'- shall not exceed fi7e per cent of the income
from such profession or ten thousand rupees# whiche7er is the less/
+4- No assessee shall 0e entitled to the allowance under su0-section +'- if he is entitled# on his
retirement# to a pension or other 0enefits/
+:- No allowance shall 0e made under su0-section +'- in respect of a contract which pro7ides-
+a- for the pament during the life of the assessee of an sums 0esides the sums paa0le as
annuit;
+0- for the annuit paa0le to the assessee to commence 0efore he attains the age of sixt or
after he attains the age of se7ent;
+c- that the annuit shall 0e capa0le# in whole or in part# of surrender# commutation or
assignment; or
'
Sec/ :: renum0ered as su0-section +'- of sec/ ::
48
+d- for pament of the annuit outside Pa!istan/
+;- Nothing contained in this section shall appl to an amount in respect of which an allowance has
0een made under section ::/9
'
8 9
:;/ Li$it!tio !' to relie&/- $he aggregate of the allowances under sections 4(# :@# :'# 8 9 :4 and ::
shall not exceed 8one-third9 of the total income of the assessee or 8fift9 thousand rupees whiche7er is the
less/
:</ Cotri.0tio' to .ee5olet &0" !" 2ro0+ i'0r!#e/- An assessee shall 0e entitled to an
allowance in respect of an sum paid# in order to ma!e pro7ision for his spouse or children or other
persons dependent on him# to a 0ene7olent fund or an premium paid under a group insurance scheme# if
such fund or scheme is appro7ed 0 the ,entral Aoard of Re7enue for the purposes of this section/
:)/ Allo/!#e &or "o!tio' &or #h!rit!.le +0r+o'e'/-+'- An assessee shall 0e entitled to an
allowance in respect of an sum paid 0 him 80 a crossed che5ue drawn on a 0an!9 8or such 7alue of
articles or goods as ma 0e prescri0ed gi7en9 in an income ear as donation to-
+a- an Aoard of Education in Pa!istan or an Mni7ersit in Pa!istan esta0lished or
incorporated 0# or under# an %ederal or Pro7incial Act or an educational institution in
Pa!istan affiliated to an such Aoard of Education or Mni7ersit# or recognised# aided or
run 0 Eo7ernment or run 0 an local authorit; or
+0- an hospital in Pa!istan recognised# aided or run 0 Eo7ernment or run 0 a local
authorit; or
+c- an relief fund sponsored or appro7ed 0 Eo7ernment; or
+d- an other institution or fund which is esta0lished in Pa!istan for a religious or charita0le
purpose and is appro7ed 0 the ,entral Aoard of Re7enue for the purposes of this section8;
or
+e- institutions# foundations# societies# 0oards# trusts or funds referred to in clause +('- of Part 2
of the Second Schedule/9
+3- Nothing contained in su0-section +'- shall appl to an donation made to a pri7ate religious institution
or fund which does not enure for the 0enefit of the pu0lic/
3
8 9
+4A- $he aggregate of allowances# under su0-section +'-# in respect of donations#
4
8 9 shall not exceed-
+i- in the case of a compan#
:
8fifteen9 per cent of the total income; and
'
Sec/::A omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A/ '(((/
3
Su0-sec/ +4- omitted 0 %/A/'((=/
4
Words >su0Cect to the limit specified in su0-section +4-? omitted i0id/
:
Su0s/ for >ten? i0id/
49
+ii- in an other case#
'
8thirt9 per cent of the total income/9
8+:- Nothing contained in su0-section +4- or su0-section +4A- shall appl in respect of an donation made
to the Puaid-e-AHam .emorial %und 8or to an institution# museum# li0rar or monument referred to in
su0-clause +xxxii- of clause +('- of Part 2 of the Second Schedule/99
+;- $he ,entral Aoard of Re7enue ma made rules regulating the procedure for the grant of appro7al
under this section and an other matter connected with# or incidental to# the operation of this section/
:=/ Exe$+tio &ro$ t!x o& e/l, e't!.li'he" i"0'tri!l 0"ert!-i2'/- +'- Su0Cect to the
pro7isions of this section# there shall 0e exempt from the tax paa0le under this "rdinance so much of the
profits and gains deri7ed 0 an assessee from an industrial underta!ing# to which this section applies# as
does not exceed an amount computed with reference to the capital emploed in the underta!ing as
hereinafter pro7ided/
+3- $his section applies to an industrial underta!ing +hereinafter referred to as the 6said underta!ing6-
which fulfils the following conditions# namel1-
+a- that it is an underta!ing engaged in the manufacture of goods or materials# or the su0Cection
of goods or materials to an such process# ship-0uilding and na7igation# or the generation#
transformation# con7ersion# transmission# distri0ution or suppl of electrical energ or
hdraulic power; or
+0- that it is an industrial underta!ing which is appro7ed 0 the ,entral Aoard of Re7enue for
the purposes of this section;
8+c- that it is set up 0 a Pa!istani compan in the areas specified in clauses +''(-# +'3@-# +'3'-
and +'33- of the Second Schedule or in an industrial estate appro7ed 0 the ,entral Aoard
of Re7enue and located in the territories of Pa!istan +excluding $alu!as of Qarachi and
Hdera0ad# and $ehsils of %aisala0ad and *ahore# and such adCoining areas of *ahore
$ehsil as ma 0e notified in this 0ehalf 0 the %ederal Eo7ernment;9
+d- that it emplos ten or more wor!ers and in7ol7es the use of electrical energ or an other
form of energ which is mechanicall transmitted and is not generated 0 human or animal
agenc; or twent or more wor!ers and does not in7ol7e the use of electrical energ or an
other form of energ which is mechanicall transmitted;
+e- that it is not formed 0 the splitting up or the reconstruction or reconstitution of 0usiness
alread in existence or 0 transfer to a new 0usiness of an machiner or plant used in a
0usiness which was 0eing carried on in Pa!istan at an time 0efore the commencement of
the new 0usiness; and
+f- that it has commenced commercial production at an time 0etween the first da of &ul#
'(); and the thirtieth da of &une 8'(==9 +0oth dates inclusi7e-/
'
Su0s/ for >twentfi7e? i0id/
50
+4- $he amount referred to in su0-section +'- is a sum +hereafter in this su0-section and su0-section +:-
referred to as the 6said sum6- e5ual to ten per cent of the capital emploed in the said underta!ing;
+:- $he said sum shall 0e su0Cect to an adCustment where the profits and gains of the said underta!ing#
computed for an ear of assessment# co7er a period which is less than# or exceeds# twel7e months# the
adCustment decreasing or increasing# as the case ma 0e# the said sum to an amount 0earing the same
proportion to the said sum as the said period 0ears to a period of twel7e months/
+;- $he profits and gains of the said underta!ing shall 0e computed in the same manner as is applica0le to
income chargea0le under the head 62ncome from 0usiness or profession6/
+<- Nothing contained in this section shall 0e so construed as to exempt from tax an di7idend paid#
credited or distri0uted or deemed to ha7e 0een paid# credited or distri0uted# 0 a compan to its#
shareholders out of profits or gains exempt from tax under this section/
8+)- $he pro7isions of this section shall appl in respect of the assessment ears commencing with the
assessment ear rele7ant to the income ear in which the said underta!ing has commenced commercial
production and ending with-
+a- the assessment ear ending on the thirtieth da of &une# '(=;# or
+0- the assessment ear which is the last of the four assessment ears next following the
assessment ear rele7ant to the income ear in which commercial production has
commenced# whiche7er is the later/
Pro7ided that where assessment ear referred to in clause +a- is the later# no exemption under this
section shall 0e allowed in respect of an income accruing or arising after the thirtieth da of &une# '(=4/9
+=- Where an exemption is allowed under this section and su0se5uentl it is disco7ered 0 the 8Deput
,ommissioner9 that an one or more of the conditions specified in this section was# or were# not fulfilled#
as the case ma 0e# the exemption originall allowed shall 0e deemed to ha7e 0een wrongl allowed and
the Deput ,ommissioner ma# notwithstanding anthing contained in this "rdinance# recompute the tax
paa0le 0 the assessee for the rele7ant ear and the pro7isions of section <; shall# so far as ma 0e# appl
accordingl# the period of ten ears specified in su0-section +4- of that section 0eing rec!oned from the
end of the assessment ear rele7ant to the income ear in which the condition or conditions was or were
disco7ered not to ha7e 0een fulfilled/
+(- $he ,entral Aoard of Re7enue m ma!e rules regulating the procedure for the grant of appro7al under
su0-section +3- and pro7iding for the computation of capital emploed in an underta!ing for the purposes
of su0-section +4- and an other matter connected with# or incidental to# the operation of this section/
:(/ Allo/!#e' to .e tre!te" !' "e"0#tio' &ro$ i#o$e/- Sa7e as otherwise pro7ided in this
"rdinance# an allowance admissi0le or an sum exempt from tax under an pro7ision contained in this
"rdinance shall 0e included in the total income# 0ut ma 0e deducted from such income for the purposes
of computing the tax paa0le 0 an assessee/
51
CHAPTER BI
PAYMENT OF TAX @EFORE ASSESSMENT
;@/ De"0#tio o& t!x !t 'o0r#e/- +'- An person responsi0le for paing an income chargea0le under
the head 6Salar6 shall# at the time of pament# deduct tax on the amount paa0le at the a7erage rate of tax
computed at the rates specified in the %irst Schedule on the estimated income of the assessee under this
head for the financial ear in which the pament is made after ma!ing such adCustment# as ma 0e
necessar# for an excess deduction or deficienc arising out of an pre7ious deduction or failure to ma!e
such deduction during the said financial ear/
+3- An person responsi0le for paing an income chargea0le under the head 62nterest on securities6 shall#
except in cases to which clause +a- of su0-section +3- of section ')
'
8or su0-section +)D-9 applies# deduct#
at the time of pament# tax at the rates specified in the %irst Schedule1
8Pro7ided that tax under this su0-section shall 0e deducted from the said income as reduced 0 the amount
of Ra!at# if an# paa0le thereon under the Ra!at and Mshr "rdinance# '(=@ +DB222 of '(=@-91
8Pro7ided further that# where the Deput ,ommissioner gi7es a certificate in writing +which certificate he
shall gi7e in e7er proper case on the application of the assessee- that to the 0est of his 0elief the assessee
shall not 0e lia0le to pa an tax under this "rdinance or shall 0e lia0le to pa tax at a rate which is less
than the rate specified in the %irst Schedule# the person responsi0le for paing an income referred to in
this su0-section shall# until such certificate is cancelled 0 the 8Deput ,ommissioner9# pa the amount
in7ol7ed without deduction or deduct the tax at such less rate# as the case ma 0e/9
8+3A- An person responsi0le for paing an sum 0 wa of interest 8or profit9 on an account or deposit
maintained with an 0an!ing compan8# or an 8financial institution99 shall deduct# at the time of credit of
such interest 8or profit9 to the account of the recipient 8 9or at the time of pament thereof# whiche7er is
earlier# tax at the rates specified in the %irst Schedule1

8 9
8Pro7ided further that nothing contained in this su0-section shall appl to an sum paid or credited 0efore
the first da of &ul# '(=(/9
8+3A- An person responsi0le for clearing an outstation che5ue for an amount exceeding 8twent-fi7e9
thousand rupees or issuing a demand draft or pa order or special deposit receipt 86or cash deposit receipts
or rupee tra7ellers che5ues69 effecting a telegraphic or electronic transfer of funds shall collect tax from
the drawer of such che5ue# draft# pa order# receipt or# as the case ma 0e# transfer of funds at the rates
specified in the %irst Schedule; and credit for the tax collected in an financial ear shall# su0Cect to the
pro7isions of section ;4# 0e gi7en in computing the tax paa0le 0 the person from whom tax has 0een
collected# for the assessment ear commencing on the first da of &ul next following the said financial
ear# and in the case of an assessee to whom section )' or section =' applies# the assessment ear as
rec!oned in accordance with these pro7isions1
'
Words ins/ 0 %/ "/ 3@@@
52
Pro7ided that the pro7isions of this su0-section shall not appl to the paments made 0 the %ederal
Eo7ernment and Pro7incial Eo7ernments# statutor 0odies# uni7ersities# appro7ed charita0le institutions#
industrial underta!ings and institutions exempt under the Second Schedule# listed pu0lic companies#
foreign diplomats and foreign diplomatic missions in Pa!istan#8 9 intra-compan financial transactions
8and the paments in respect of which the drawer furnishes a statement to the 0an! in the prescri0ed
manner pro7iding particulars of pament# including the name and address of paer and paee# the National
2dentit ,ard num0er# national tax num0er# the amount and purpose of pament and nature of
instrument/99
+4-
'
8+a- An person responsi0le for paing to a non-resident an sum chargea0le under the
pro7isions of this "rdinance +other than income to which su0-section +'- or su0-section +3-
8or su0-8section +3A- or su0-section +4A- or su0-section +:- 8or su0-section +:A- or su0-
section +<A- or su0-section +)A-9 or su0-section +),- or su0-section +)D-99 applies- shall#
unless such person is himself lia0le to pa tax thereon as an agent# deduct# at the time of
pament# tax at the rates specified in the %irst Schedule/
Pro7ided that where the 8Deput ,ommissioner9 gi7es a certificate in writing +which
certificate he shall gi7e in e7er proper case on the application of the assessee- that to the
0est of his !nowledge and 0elief# the assessee shall not 0e lia0le to pa an tax under this
"rdinance or shall 0e lia0le to pa tax at a rate which is less than the rate specified in the
%irst Schedule# the person responsi0le for paing an income referred to in this su0-section
8 9to such recipient shall# until such certificate is cancelled 0 the Deput ,ommissioner#
pa the amount in7ol7ed without deduction or deduct the tax at such less rate# as the case
ma 0e/
8Pro7ided further that nothing contained in this su0-section shall appl to an pament
made to a 0ranch in Pa!istan of a non-resident 80an!ing9 8or insurance9 compan819
8+0- where a person claims to 0e an agent of a non-resident he shall# 0efore ma!ing an
pament to such non-resident# file a declaration to that effect with the concerned Deput
,ommissioner;
+c- where a person intends not to deduct tax# from an pament other than -
+i- pament on account of imports of goods where title of ownership is transferred
outside Pa!istan; or
+ii- an pament on account of educational and medical expenses remitted in
accordance with the regulations of State Aan! of Pa!istan;
for the reason that it is not chargea0le to tax under this "rdinance# he shall furnish the
particulars of such non-resident and the nature and 5uantum of such pament to the Deput
,ommissioner at the time of ma!ing the pament;
+d- Notwithstanding anthing contained in clause +c-# the Deput ,ommissioner ma# where
he has reason to 0elie7e that the pament is chargea0le to tax under this "rdinance# direct
'
Su0-sec/ +4- renum0ered as cl/ +a- J cls/ +0-# +c- J +d- ins/ 0 %/A/'(((/
53
the person ma!ing the pament to deduct tax from such pament at the rates specified in
the %irst Schedule or such lower rate as he ma 0 order in writing# specif/9
8+4A- An person responsi0le for paing to a non-resident an sum 0 wa of fees for technical ser7ices
shall# unless such person is himself lia0le to pa tax thereon as an agent# deduct# at the time of pament#
tax at the rate specified in the %irst Schedule/9
+:- Notwithstanding anthing contained in this "rdinance#-
+a- an person responsi0le for ma!ing an pament in full or in part +including a pament 0
wa of an ad7ance- to an person 8#0eing resident#9 +hereinafter referred to respecti7el as
6paer6 and 6recipient6-# on account of the suppl of goods or for ser7ice rendered to# or
the execution of a contract with the Eo7ernment# or a local authorit# or 8a compan9 8or a
registered firm#9 or an foreign contractor or consultant or consortium shall# 8 9 deduct
ad7ance tax# at the time of ma!ing such pament# at the rate specified in the %irst Schedule#
and credit for the tax so deducted in an financial ear shall# su0Cect to the pro7isions of
section ;4# 0e gi7en in computing the tax paa0le 0 the recipient for the assessment ear
commencing on the first da of &ul next following the said financial ear# or in the case of
an assessee to whom section )3 or section =' applies# the assessment ear# if an# in which
the 6said date6# as referred to therein# falls# whiche7er is the later1
'
8Pro7ided that the pro7isions of this clause shall appl# mutatis mutandis# to an pament
made on or after the first da of &ul# '((=# to a non-resident person on account of
execution of a turn!e contract# a contract or su0-contract for designing# suppl of plant
and e5uipment and construction of power proCects# a contract for construction# assem0l or
li!e proCect in Pa!istan or an other proCect for construction or for ser7ices rendered other
than that to which the pro7isions of su0-sections +4A- and +:A- appl/9
3
8Explanation.- %or the purposes of clause +a- the expression >suppl of goods? includes
0oth cash and credit purchases of goods 0 the paer# whether under a contract or not# on
credit or in cash;9
+0- the ,ommissioner ma# on an application made 0 an such recipient and after ma!ing
such en5uir as he thin!s fit# allow# 0 an order in writing# an person responsi0le for
ma!ing such pament not to deduct an tax from an pament or paments made to such
recipient in an financial ear; and where such order is made# the person responsi0le for
ma!ing an pament shall thereafter# and until such order is cancelled# ma!e such pament
without deduction of tax under clause +a-1
4
8 9
8Pro7ided that-
+i- nothing contained in clause +a- or clause +0- shall appl to
:
8an pament on account of
securitiHation of recei7a0les 0 a special purpose 7ehicle to the originator or9 an pament
'
Pro7iso su0s/ 0 %/ A/ '((=/
3
Explanation ins/ i0id/
4
,l/ +c- omitted 0 %/A/'((:/
:
words ins/ 0 %/"/3@@'/
54
made on account of refund of an securit deposit
'
8or to the purchase of an asset under a
lease and 0u 0ac! agreement 0 a modara0a or a leasing compan
3
Sor a 0an!ing
compan or a financial institutionT9;
4
8 9
+ii- nothing contained in su0-section +'@- shall appl to companies as paers/9
:
8 9
;
8+:A- An person responsi0le for ma!ing an pament in full or in part +including a pament 0 wa of
ad7ance- to an person# on account of 0ro!erage or commission on 0ehalf of the Eo7ernment# a local
authorit# a compan# a registered firm or foreign contractor or consortium shall deduct tax# at the time of
ma!ing such pament# at the rate specified in the %irst Schedule1
Pro7ided that where an person recei7es pament on 0ehalf of his principal and remits it after deducting
his commission such commission shall 0e deemed to ha7e 0een paid to him and the tax shall 0e collected
0 such principal/9
8 9
+;- Notwithstanding anthing contained in an law for the time 0eing in force#
+a- the ,ollector of ,ustoms shall# in the case of e7er importer of goods# collect ad7ance tax
computed# on the 0asis of the 7alue of such goods as increased 0 the customs dut and sales-tax#
if an# le7ied thereon# at the rates specified in the %irst Schedule# and credit for the tax so collected
in an financial ear shall# su0Cect to the pro7isions of section ;4# 0e gi7en in computing the tax
paa0le 0 such importer for the assessment ear commencing on the first da of &ul next
following the said financial ear# or in the case of an assessee to whom section )3 or section ='
applies# the assessment ear# in which the 6said date6# as referred to therein# falls# whiche7er is the
later;
+0- the tax under clause +a- shall 0e collected in the same manner and at the same time as the customs
dut# as if such goods +e7en though exempt from such dut- were lia0le to such dut# and all the
pro7isions of the ,ustoms Act#'(<( +2B of '(<(- shall# so far as ma 0e# appl accordingl 8;9
8Pro7ided that in the case of a manufacturer importing raw materials8# other than edi0le oils#9
exclusi7el for its own use# the Regional ,ommissioner of 2ncome $ax ma certif reduction of
the rate of collection under this su0-section 8upto one hundred9 percent# if the aggregate of tax paid
or collected 8 9 during that ear e5uals the amount of tax paid 0 such assessee in the immediatel
preceding ear and the certificate is not issued during the first ear of assesseeGs 0usiness1
8Pro7ided further that the pro7isions of this su0-section shall not appl to-
'
Words ins/ i0id/
3
Words ins/ 0 %/ "/ 3@@@/
4
>and? omitted 0 %/"/3@@'/
:
Explanation omitted 0 %/"/'(='/
;
Su0-sec/+:A- su0s/ 0 %/A/'(((/
55
+i- an person re-importing re-usa0le containers for re-export 5ualifing for customs and sales
tax exemptions on temporar import under ,ustoms Notification SR" 4::+2-U(;# dated
3;th April# '((;; or
+ii- an person importing the following petroleum products# mainl1-
.otor Spirit +.S-# %urnace "il +%"-# &P-' J .$AE/9
Pro7ided also that if at an stage it is !nown that the pro7isions of this pro7iso ha7e 0een
misused# such person shall 0e treated as an assessee in default in respect of such tax and 0e
treated accordingl;9
'
8 9
Explanation/- As used in this su0-section#-
+i- 67alue6# in relation to an goods# means the 7alue as determined under section 3; of the
,ustoms Act# '(<( +2B of '(<(-# as if the goods were su0Cect to ad 7alorem dut; and
+ii- 6,ollector of ,ustoms6 means a person appointed as ,ollector of ,ustoms under section 4
of the ,ustoms Act# '(<( +2B of '(<(- and includes a Deput ,ollector of ,ustoms# an
Assistant ,ollector of ,ustoms or an officer of ,ustoms appointed as such under the
aforesaid section/
8+;A- An person# 0eing an authorised dealer in foreign exchange# shall at the time of realisation of
foreign exchange proceeds on account of export of goods 0 a person# 0eing an exporter
3
8or on account of
commission due to an indenting commission agent9# deduct tax at the rates specified in the %irst
Schedule/9

4
8+;AA- E7er 0an!ing compan shall at the time of realis<ation of proceeds on account of suppl of
goods to an exporter under an inland 0ac! to 0ac! letter of credit# deduct tax at the rates specified in the
%irst Schedule/
:
8 9
;
8+;AAA- $he Export Processing Rone Authorit created under the Export Processing Rone Authorit
"rdinance# '(=@ +2B of '(=@-# shall at the time of export of goods 0 an industrial underta!ing located in
the area declared 0 the %ederal Eo7ernment to 0e a >Rone? within the meaning of the aforesaid
"rdinance# collect tax at the rates specified in su0-paragraph ,,,,A of the %irst Schedule/9
<
8 9
'
$hird pro7iso omitted 0 %/A/'((:/
3
Words etc/ ins/ 0 %/A/'(((/
4
,lauses +;A- ins/ 0 %/A/'(((/
:
Su0-sec/ +;AAA- deleted 0 %/ "/ 3@@'/ Earlier ins/ 0 %/A/ '((( J too! effect from '3-<-'(((/
;
Su0-sec/ +;AAA- ins/ 0 %/ "/ 3@@@/
<
Su0-sec/ +;A- deleted 0 %/ "/ 3@@'/ Earlier ins/ 0 %/A/'((;/ Still earlier a different su0-section was ins/ 0 %/A/ '((4 which
was omitted 0 %/A/'((:/
56
+<- An person responsi0le for the collection of motor 7ehicles tax shall# at the time of collecting the said
tax# collect income tax at the rates specified in the %irst Schedule in respect of an transport 7ehicle 8 91
Pro7ided that where the motor 7ehicle tax is collected in instalments# income tax ma also 0e collected in
the li!e manner1
Pro7ided further that the collection of tax in respect of passenger transport 7ehicles with registered seating
capacit of not less than 8ten9 persons shall 0e made 8for a period of ten ears commencing with the first
da of &ul of the ear of ma!e of such 7ehicles9/
8+<A- $he principal officer of a compan shall# at the time of ma!ing pament to a shareholder# not 0eing
a compan# on account of di7idends# deduct
'
8#and in case of 0onus or 0onus shares# collect#9 tax at the
rate specified in the %irst Schedule/
8 9
3
8 9
4
8+)A- An person ma!ing sale# 0 pu0lic auction# of an propert
:
8 9 0elonging to the Eo7ernment# a
local authorit# a pu0lic compan# a foreign association declared to 0e a compan under clause +'<- of
section 3# or a foreign contractor or consultant or consortium shall collect ad7ance tax# computed on the
0asis of sales price of such propert and at the rate specified in the %irst Schedule# from an person to
whom such propert is sold# and credit for the tax so collected in an financial ear shall# su0Cect to the
pro7isions of section ;4# 0e gi7en in computing the tax paa0le 0 the person purchasing such propert
for the assessment ear commencing on the first da of &ul next following the said financial ear# or in
the case of an assessee to whom section )3 or section =' applies# the assessment ear# if an# in which the
6said date6 as referred to therein# falls# whiche7er is the later/9
8Explanation#- %or the purposes of this su0-section# sale of an propert includes the awarding of an
lease to an person# including a lease of the right to collect octroi duties# tolls# fees or other le7ies# 0
whate7er name called/
;
8+)A- An person responsi0le for ma!ing na pament in full or in part +including a pament 0 wa of
an ad7ance- to an person# on account of the rent of house propert +including rent of furniture8# fixtures
and ser7ices#9 if an- on 0ehalf of Eo7ernment# a local authorit# a compan# 8a non-go7ernment
charita0le institution# a pri7ate educational institution# a hospital# a clinic or a maternit home9 or the
diplomatic mission of a foreign state shall# where the annual rent of such propert exceeds one hundred
thousand rupees# deduct ad7ance tax# at the time of ma!ing such pament# at the rate specified in the %irst
Schedule# and credit for the tax so deduct in an financial ear shall# su0Cect to the pro7isions of section
;4# 0e gi7en in computing the tax paa0le 0 the recipient for the assessment ear commencing on the
first da of &ul next following the said financial ear# or in the case of an assessee to whom section )3 or
section =' applies# the assessment ear# if an# in which the 6said date6# as referred to therein# falls#
whiche7er is the later/9
'
Words etc ins/ 0 %/ "/ 3@@'/
3
Su0-sec/ +)- deleted 0 %/ "/ 3@@'/
4
Su0-sec/ +)A- deleted 0 %/ "/ 3@@'/ Earlier ins/ 0 %/ "/ '(=' w/e/f/ '-)-'(='/
:
Words etc/ >other than a plot of land? ins/ 0 %/ A/ '==; later omitted 0 %/ A/ '((3/
;
Su0-sec/+)A- ins/ 0 %/ A/ '(=( w/e/f/ '-)-'(=(/
57
8 9
'
8 9
8+),- An person responsi0le for ma!ing an pament 8 9to an person +hereinafter called the FrecipientG-
0 wa of a priHe on priHe 0ond or on account of winnings from a raffle# lotter or crossword puHHle shall
deduct from the said pament +in case the pament is made in an other form- ad7ance tax at the time of
such pament at the rate specified in the %irst Schedule/9
8+)D- An person responsi0le for ma!ing an pament 0 wa of profit or interest on 0onds# certificates#
de0entures# securities or instruments of an !ind issued 0 an 0an!ing compan# or an compan
referred to in su0-clause +a- or su0-clause +0- of clause +'<- of section 3# or an local authorit# or an
finance societ
3
8 9# shall deduct ad7ance tax# at the time of ma!ing such pament# at the rate specified in
the %irst Schedule19
8Pro7ided that where the Deput ,ommissioner gi7es a certificate in writing +which certificate he shall
gi7e in e7er proper case for a period of three ears on the application of a recognised pro7ident fund- that
to the 0est of his !nowledge and 0elief# it shall not 0e lia0le to pa an tax under this "rdinance or shall
0e lia0le to pa tax at a rate which is less than the rate specified in the %irst Schedule# the person
responsi0le for paing an income referred to in this su0-section to such recognised pro7ident fund shall
until such certificate is cancelled 0 the Deput ,ommissioner# pa the amount in7ol7ed without
deduction or deduct tax at such less rate# as the case ma 0e/9
8+)E- At the time of preparing electricit consumption 0ills in respect of an commercial or industrial
consumer# the person responsi0le for preparing such 0ills# shall charge tax on the amount of the electricit
0ill at the rates specified in the %irst Schedule# and the credit for the tax so collected in an financial ear
shall# su0Cect to the pro7isions of section ;4# 0e gi7en in computing the tax paa0le 0 such consumer for
the assessment ear commencing on the first da of &ul next following the said financial ear# or in the
case of an assessee to whom section )3 or section =' applies# the assessment ear in which the 6said date6
as referred to therein falls# whiche7er is the later/
8+)%- At the time of preparing 8telephone 0ills or issuing or selling prepaid telephone cards for mo0ile
telephone# the person responsi0le for preparing such 0ills or issuing or selling such prepaid telephone
cards shall charge tax on the amount of such 0ill or card# the case ma 0e 9at the rates specified in the %irst
Schedule# and the credit for the tax so collected in an financial ear shall# su0Cect to the pro7isions of
section ;4# 0e gi7en in computing the tax paa0le 0 such su0scri0er for the assessment ear commencing
on the first da of &ul next following the said financial ear# or in the case of an assessee to whom section
)3 or section =' applies# the assessment ear in which the 6said date6 as referred to therein falls#
whiche7er is the later;
Pro7ided that nothing contained in this su0-section shall appl where the Eo7ernment or a diplomat is the
su0scri0er/6;9
4
8 9
'
Su0-sec/ +)AA- omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A/ '((4/
3
Words etc/ ># not 0eing a pament to which su0-section +3- of section ;@ applies? omitted 0 %/ "/ 3@@@/
4
Su0-sec/ +)E- deleted 0 %/ "/ 3@@'/ Earlier ins/ 0 %/ A/ '(((/
58
+)H- E7er person# at the time of ma!ing sale of petroleum products to a petrol pump operator# shall
collect tax on the amount of commission or discount allowed to such operator at the rate specified in the
%irst Schedule/9
+=- An sum deducted or collected# or purported to 0e deducted or collected# under this section shall 0e-
+a- deemed# in cases to which su0-sections +'-# +3- and +4- appl# to 0e income recei7ed 0 the
assessee;
+0- treated as pament of tax on 0ehalf of the assessee; and
+c- paid within the prescri0ed time and in the prescri0ed manner 0 the person ma!ing the
deduction or collection# as the case ma 0e# to the credit of the %ederal Eo7ernment/
+(- %or the purpose of this section#-
+a- 6person responsi0le6 means the prescri0ed person and includes#-
+i- in the case of a compan# local authorit or an association of persons# the principal
officer thereof; and
+ii- in e7er other case# the paer himself; and
+0- an sum from which tax is deducti0le under this section shall 0e deemed to 0e income
chargea0le to tax under this "rdinance/
8+'@- Notwithstanding the omission of the first pro7iso to su0-section +3A-# clause +c- of su0-section +:-#
and the pro7isos to su0-section +:A-# su0-section +;-# su0-section +;A-# su0-section +<A-# su0-section +)A-
and su0-section +)AA-# and su0stitution of the pro7iso to su0-section +:-# under the %inance Act# '((: +D22
of '((:-# and without preCudice to the pro7isions of section < or section 3: of the Eeneral ,lauses Act#
'=() +D of '=()-# all the notifications issued under the aforesaid pro7isions till the 4@th da of &une# '((:#
shall 0e deemed to ha7e 0een 7alidl made and continue to remain in force until specificall repealed or
amended/9
;'/ Certi&i#!te o& "e"0#tio o& t!x/- E7er person deducting or collecting tax under section ;@ shall#
at the time of ma!ing pament of the sum from which tax has 0een deducted# or at the time of the
collection of the tax# as the case ma 0e# furnish to the person to or from whom such pament or
collection has 0een made# a certificate to the effect that tax has 0een so deducted or collected and such
other particulars as ma 0e prescri0ed/
;3/ Li!.ilit, o& +er'o' &!ili2 to "e"0#t or +!, t!x/- Where an person fails to deduct or collect# or
ha7ing deducted or collected# as the case ma 0e# fails to pa the tax as re5uired 0# or under# section ;@#
he shall# without preCudice to an other lia0ilit which he ma incur under this "rdinance# 0e deemed to
0e an assessee in default in respect of such tax/
'
8Explanation/- %or the purposes of this section# the Deput ,ommissioner ha7ing Curisdiction under
section ; o7er the case of the assessee in default ma initiate action/9
'
Expln/ ins/ 0 %/A/'(((/
59
8;3A/ Re#o5er, &ro$ the +er'o &ro$ /ho$ t!x /!' ot "e"0#te" or #olle#te"/- Where an sum
deducti0le or collecta0le 0 an person has not 0een deducted or collected as re5uired 0# or under section
;@# the Deput ,ommissioner ha7ing Curisdiction o7er the case of the person from whom tax was
deducti0le or collecta0le# without preCudice to an lia0ilit which the person responsi0le for deduction or
collection of tax under section ;@ ma incur under this "rdinance# ma reco7er the sum not deducted or
collected from the person from whom tax was to 0e deducted or collected and all pro7isions of this
"rdinance relating to reco7er of tax shall appl/9
8;4/ A"5!#e +!,$et o& t!x/- +'- An assessee-
+a- other than a compan or a registered firm whose total income +excluding income to which
section 3)# section =@A# section =@, or section =@,, or su0-sections +'- and +3- of section
;@ applies- for the latest assessment ear in respect of which the tax paa0le 0 him has
0een determined under sections ;(# ;(A# <@# <3# <4 or <;# is not less than one hundred and
fift thousand rupees shall 0e lia0le to pa 0 wa of 8ad7ance tax to the credit of the
%ederal Eo7ernment# on or 0efore the se7enth da of "cto0er# the se7enth da of &anuar#
the se7enth da of April and the twent-first da of &une in each financial ear9 an amount
e5ual to one-fourth of the full amount of income tax and super-tax so determined to 0e
paa0le in respect of that assessment ear +without ma!ing an adCustment for an tax
alread paid 0 wa of ad7ance tax or otherwise-# as reduced 0 the tax# if an# alread
collected all deducted and paid under section ;@ in the said financial ear; and
+0- 0eing a compan or a registered firm shall# in respect of its income +excluding income to
which section 3)# section =@,# 8or section =@,,9 applies- 0e lia0le to pa 0 wa of
ad7ance tax an amount which 0ears the same proportion to the companGs or a registered
firmGs turno7er for that ear as the tax assessed# 0ears to the turno7er assessed# for the
latest assessment ear in respect of which the tax paa0le 0 the compan or registered
firm has 0een determined under sections ;(# ;(A# <@# <3# <4 or <; as reduced 0 the tax
alread paid under section ;@ 8other than the tax attri0uta0le to income co7ered 0 sections
=@, and =@,,9in the said financial ear/
+3- $he tax paa0le#-
8 9
+ii- under clause +0- of su0-section +'- +i/e/ 0 companies and registered firms- shall 0e paid to the credit
of the %ederal Eo7ernment in each financial ear# according to the following schedule1
TARNOBER RELATIN> TO THE
PERIOD
TAX TO @E PAID ON OR
@EFORE
%rom '
st
of &ul to 4@th Septem0er the se7enth da of "cto0er
%rom '
st
of "cto0er to 84'
st
Decem0er9 the se7enth da of &anuar
%rom '
st
of &anuar to 84'
st
.arch9 the se7enth da of April
%rom '
st
of &ul to 4@th of &une the 8twent-first da of &une9
60
$urno7er for '<
th
&une to 4@
th
&une shall 0e ta!en e5ual to the turno7er of 0etween '
st
of &une and ';
th
of
&une/
+4- 2n the case of non-resident assessee# di7idend income shall 0e excluded from the total income for the
purposes of su0-section +'-/
+:- 2f an assessee who is re5uired to ma!e pament of ad7ance tax under clause +a- of su0-section +'-
estimates at an time 0efore the last instalment is due# that the tax paa0le 0 him for the rele7ant
assessment ear is li!el to 0e less than the amount he is re5uired to pa under clause +a- of su0-section
+'-# the assessee ma furnish to the Deput ,ommissioner an estimate of the amount of the tax paa0le 0
him# and thereafter pa such estimated amount# as reduced 0 the amount# if an# alread paid under
clause +a- of su0-section +'-# in e5ual instalments on such dates as ha7e not expired/
+;- An sum paid under su0-section +'- shall 0e treated as an ad7ance pament of tax in respect of the
assessment ear commencing on the first da of &ul next following the financial ear in which it is paid
or# in the case of an assessee to whom section )3 or section =' applies# the assessment ear in which the
Fsaid dateG# as referred to therein# falls# whiche7er is the later# and credit therefore shall 0e allowed to the
assessee in computing the tax paa0le 0 him for the said assessment ear/9
;:/ P!,$et o& t!x /ith ret0r o& i#o$e/- E7er person who is re5uired# under this "rdinance to
furnish a return of total income shall pa the tax paa0le# on the 0asis of such return# on or 0efore the date
on which he is so re5uired to furnish such return1
8Pro7ided that where such person has paid an sum under su0-section +'- or su0-section +3- of section ;4#
the Deput ,ommissioner shall adCust the said sum against the tax paa0le under this section/
8Explanation/- %or the remo7al of dou0t# it is declared that the expression 6tax paa0le6 as used in this
section includes an tax under section =@D/9
61
CHAPTER BII
ASSESSMENT
;;/ Ret0r o& tot!l i#o$e/- +'- E7er person#-
+a- whose total income or the total income of an other person# in respect of which he is
assessa0le under this "rdinance# for an income ear# +herein-after referred to an the Ksaid
income earG- exceeds the maximum amount which is not chargea0le to tax under this
"rdinance; or
+0- who has 0een charged to tax for an of the four income ears immediatel preceding the
said income ear#
'
8or9
3
8+c- who fulfils an of the following conditions# namel1-
+i- owns immo7a0le propert# with land area of 3;@ s5 ards or more# located in areas
falling in the limits of .etropolitan U.unicipal ,orporation# a ,antonment Aoard
of the 2slama0ad ,apital $erritor;
+ii- owns a motor 7ehicle
+iii- su0scri0es a telephone; or
+i7- has underta!en foreign tra7el +except for the purposes of HaC
4
8# Mmrah9 or Riarat-
during the income ear#9
shall furnish a return of his total income or the total income of such other person# as the case ma 0e# for
the said income ear
:
8 91
;
8Pro7ided that# where the entire total income of an assessee during the income ear consists of income
chargea0le under the head 6Salar6# he ma# instead of furnishing a return as aforesaid# file a certificate
from his emploer in the prescri0ed form setting forth such particulars# and accompanied 0 such
statements# and 7erified in such manner# as ma 0e prescri0ed# and the said certificate shall 0e deemed to
0e a return under this su0-section19
<
8Pro7ided further that the persons otherwise not re5uired to file return of total income under the first
pro7iso or section =@, or section =@,, shall# except in the case of firms# association of persons# or 0odies
of indi7iduals# whether incorporated or not# and companies who are otherwise not chargea0le to wealth-
tax under the Wealth-tax Act# '(<4 +DB of '(<4-
)
8and persons whose declared income for the rele7ant
ear or the last declared or assessed income is less than
=
8two9 hundred thousand rupees#9 file return of
wealth alongwith the certificate or statement of their income in lieu of such return of total income/9
'
2ns/ 0 %in/ Suppl/ +Amend/-Act# '(()/
3
,l/ +c- ins/ ibid.
4
Word ins/ 0 %/ A/ '(()
:
Words etc/ deleted 0 %/ "/ 3@@'/ Earlier ins/ 0 %/ A/ '((:/
;
Pro7/ 2ns/ 0 %/ A/ '(=)/
<
Second Pro7/ 2ns/ 0 %/ A/ '((:/
)
Words etc/ ins/ 0 %/ A/ '((;/ Earlier ins/ 0 2/ $/ +Amendt/- "rd/ '((:/
=
Su0s/ for >one? 0 %/ A/ '(((/
62
'
8Pro7ided also that clause +c- of this section shall not appl to a person# who is1
+a- widow
+0- orphan 0elow the age of 3; ears;
+c- pensioner;
+d- disa0led; or
+e- non-resident Pa!istani in the case of foreign tra7el 8and ownership of immo7a0le propert9
[:]9
3
8Pro7ided that where a taxpaer is not 0orne on the National $ax Num0er Register# and fails to
file an application in the prescri0ed form and manner for the said num0er# alongwith the return of
his income or certificate in lieu of return under the first pro7iso to su0-section +'-# such return of
income or certificate shall not 0e considered a return under this section/9
4
8+3- $he return of total income under su0-section +'- shall 0e furnished -
+a- in the case of a compan# in respect of the income ear ending at an time 0etween the first
da of &anuar and the thirtieth da of &une# 0oth das inclusi7e# on or 0efore the thirt-
first da of Decem0er next following the income ear; and
+0- in the case of an assessee other than referred to in clause +a-# on or 0efore the thirtieth da
of Septem0er next following the income ear/
:
8+4- $he SDeput ,ommissionerT ma# on sufficient cause 0eing shown# extend the date for the deli7er
of the return so# howe7er# that no extension of time for a period or periods amounting in all to more than
fifteen das from the dates specified in su0-section +3- shall 0e allowed except with the appro7al of the
2nspecting SAdditional ,ommissionerT9/

;
8Explanation/- Non furnishing of wealth-tax return alongwith the return of total income# certificate or
statement of income shall render such return# certificate or statement as in7alid/
<
8;;A/ Metho" o& &0ri'hi2 ret0r o& tot!l i#o$e/- Where an assessee is re5uired 0 section ;; to
furnish a return of his total income# such return shall 0e furnished 0 registered post# with
ac!nowledgement due# or deli7ered 0 hand# to 8the officer ha7ing Curisdiction or such other officer which
the ,ommissioner of 2ncome $ax ma specif9/
;</ Noti#e &or &0ri'hi2 ret0r o& tot!l i#o$e/- $he Deput ,ommissioner ma# at an time 0
notice in writing# re5uire an person who# in his opinion# is chargea0le to tax 8or is re5uired to file return
of total income under section ;;9 for an income ear to furnish a return of total income for such ear
within thirt das from the date of ser7ice of such notice or such longer or shorter period as ma 0e
specified in such notice or as the 2ncome $ax "fficer ma allow 819
'
$hird Pro7/ ins/ 0 %/ Suppl/ +Amendt/- Act# '(()/
3
%ourth Pro7iso ins/ 0 %/ "/ 3@@@/
4
Su0-sec/ +3- su0s/ A %/A/ '((;/ Earlier# it was su0s/ 0 %/"/ '(=@/
:
Su0-sec/ +4- ins/ 0 %/"/ '(=@/
;
Expln/ ins/ 0 %/A/ '((:/
<
Sec/ +;;A- su0s/ 0 %/A/ '(==/ Earlier it was ins/ 0 %/ A/ '(=)/
63
8Pro7ided that no notice under this section shall 0e issued after the expiration of fi7e ears from the
end of the assessment ear for which the return of income was due/9
'
3
8 9
;)/ Re5i'e" ret0r' o& tot!l i#o$e/- 2f an person has not furnished a return of total income as
re5uired 0# or under# an pro7ision of this "rdinance +hereafter in this section referred to as FreturnG-# or
ha7ing furnished a return# disco7ers an omission or wrong statement therein# he ma# without preCudice
to an lia0ilit incurred 0 him under an pro7ision of this "rdinance or the repealed Act# furnish a return
or a re7ised return# as the case ma0e# at an time 0efore the assessment is made/
;=/ De!lth 't!te$et/-
4
8 9$he Deput ,ommissioner ma# 0 notice in writing# re5uire an assessee
to furnish# on a date to 0e specified in the notice# a statement +hereinafter referred to as the Kwealth
statementG- in the prescri0ed form and 7erified in the prescri0ed manner gi7ing particulars-
+a- his total assets and lia0ilities as on the date or dates specified in such notice;
+0- the total assets and lia0ilities of his spouse# minor children and dependants as on the date or
dates specified in such notice; 8 9
+c- an assets transferred 0 him to an person during the period or periods specified in such
notice and the consideration therefore86;and9
8+d- the total expenses incurred 0 the assessee# his spouse# minor children and dependants
during the period or periods specified in the notice and the details thereof
:
819
;
8Pro7ided that where the income declared is two hundred thousand rupees or more# the return of
total income shall 0e accompanied a wealth statement/9
<
8+3-. Where a person# who has furnished a wealth statement as re5uired under su0-section +'-# disco7ers
an omission or wrong statement therein# he ma# without preCudice to an lia0ilit incurred 0 him under
an pro7ision of this "rdinance# he ma furnish a re7ised wealth statement at an time 0efore the assessment
is made/9
99. Sel&1!''e''$et.- 8+'- Where the return of total income for an income ear furnished 0 the
assessee 8not 0eing
)
8 9 or a compan engaged in the 0usiness of 0an!ing# leasing and modara0a#9 under
section ;; 5ualifies for acceptance in accordance with the pro7isions of a scheme of self assessment made
0 the ,entral Aoard of Re7enue for that ear or under an instructions or orders issued thereunder# the
8Deput ,ommissioner9 shall assess# 0 an order in writing# the total income of the assessee on the 0asis
of such return and determine the tax paa0le on the 0asis of such assessment/
'
Pro7iso ins/ 0 %/ "/ 3@@'/
3
Expln/ Deleted 0 %/ "/ 3@@'/ Earlier added 0 %/ "/ 3@@@/
4
Sec/ ;= renum0ered as su0-sec/+'- 0 %/ "/ 3@@'/ Earlier >+'-? omitted 0 %/ "/ 3@@@/
:
Su0s/ for full stop ibid/
;
Pro7iso ins/ibid/
<
Su0-sec/ +3- ins/ 0 %/ "/ 3@@'/ Earlier omitted 0 %/ A/ '((</
)
Words >a pu0lic compan? omitted 0 %/ "/ 3@@'/
64
'
8Explanation/- %or the remo7al of dou0t it is here0 declared that a return of total income
furnished under section ;; does not include a return of total income furnished under section ;)/9
3
8+'A- Notwithstanding anthing contained in su0-section +'-# the ,entral Aoard of Re7enue or an
authorit su0ordinate to it# if so authorised 0 the ,entral Aoard of Re7enue in this 0ehalf# ma# in
accordance with a scheme referred to in su0-section +'-# select out of returns referred to in that su0-section
an cases or classes of cases or persons or classes of persons# howsoe7er determined# for assessment under
section <3# and the 8Deput ,ommissioner9 shall proceed to ma!e the assessment under that section or# if
the circumstances so warrant# under section <4# accordingl/
4
8 9
:
8 9
+4- 2n 8assessing the total income and determining the tax paa0le under su0-section +'-9# the 8Deput
,ommissioner9 ma ma!e such adCustments as ma 0e necessar# including an adCustment under sections
4:# 4;# 4<# 4)# 4=# ;@# ;4 or ;:# the rules made under section '<;# the %irst Schedule and the $hird
Schedule/
;
8+:- No order under su0-section +'- shall 0e made in an case after the thirtieth da of &une of the financial
ear next following the income ear in respect of which a return of total income has 0een furnished under
section ;;1
Pro7ided that if such order is not passed 0 such date# order under su0-section +'- shall 0e deemed to
ha7e 0een passed on such date/9
8;(A/ A''e''$et o the .!'i' o& ret0r/- +'- 2f the 8Deput ,ommissioner9 is satisfied without
re5uiring the presence of the assessee or the production 0 him of an e7idence that a return furnished
under section ;; is correct and complete# he shall# 0 an order in writing assess the total income of the
assessee and determine the tax paa0le on the 0asis of such return/
+3- $he pro7isions of 8su0-section +4-9 of section ;( shall appl to an assessment and determination under
this section as the appl to an assessment and determination under that section/9
8;(A/ A''e''$et 0"er the Si$+li&ie" Pro#e"0re &or A''e''$et/- +'- Where the return of total
income of an assessee# 0eing an indi7idual# an un-registered firm# a registered firm# an association of
persons or a Hindu undi7ided famil# for the income ear rele7ant to the assessment ear commencing on
or after the first da of &ul# '(==# 8and ending on or 0efore the thirtieth da of &une# '((@#9 5ualifies for
acceptance in accordance with the pro7isions of a scheme of Simplified Procedure for Assessment made
0 the ,entral Aoard of Re7enue for that ear# or under an instructions or orders issued thereunder# the
total income of the assessee shall 0e assessed on the 0asis of the said return/
'
Epln/ added 0 %/ A/ '(=; J shall alwas deemed to ha7e 0een so added/
3
Su0-sec/ +'A- ins/ 0 %/ A/ '(=; J shall alwas deemed to ha7e 0een so ins/
4
Su0-sec/ +'A- omitted 0 %/ A/ '((@/ Earlier ins/ 0 %/ A/ '(=)/
:
Su0-sec/ +3- omitted 0 %/ A/ '(=@/
;
Su0-sec/+:- ins/ 0 %/ "/ 3@@'/ Earlier omitted 0 %/ "/ 3@@@/
65
+3- After receipt of a return of total income referred to in su0-section +'-# an ac!nowledgement of its
receipts# in the prescri0ed form# shall 0e issued 0 such income tax authorit su0ordinate too the
,ommissioner as ma 0e authorised in this 0ehalf 0 the ,ommissioner/
+4- $he ac!nowledgement referred to in su0-section +3- shall 0e deemed to 0ean order of assessment in
respect of the return of total income referred to in su0-section +'-/9
8;(,/ Fixe" T!x/- 8+'- Notwithstanding anthing contained in this "rdinance# the ,entral Aoard of
Re7enue# ma ma!e scheme or schemes of fixed tax 86or minimum fixed tax69
+a- for persons maintaining small esta0lishments to carr on 0usiness or profession whereunder
an assessee ma opt to pa fixed amount of tax without 0eing re5uired to furnish a return of
his total income under section ;; or ;< and receipt o0tained for pament of such tax shall
deem to 0e an order of assessment under section ;(A; 89
+0- for persons carring on an 0usiness or profession in shopping centres and commercial
mar!ets whereunder an assessee shall pa fixed amount of tax; 8and9
8+c- for persons engaged in or carring on an 0usiness or profession# whereunder an assessee
ma 0e re5uired to pa a minimum fixed amount of tax without 0eing re5uired to furnish a
return of his total income under section ;; or ;< and receipt o0tained for pament of such
tax shall 0e deemed to 0e an order of assessment under section ;(A;69
+3- $he scheme 8or schemes9 referred to in su0-section +'- ma pro7ide for such classes of persons 0
whom fixed tax ma 0ecome paa0le# at such rates# and in such areas# as ma 0e specified in the scheme/
+4- $he ,entral Aoard of Re7enue ma# 0 notification in the official EaHette# ma!e pro7isions
relating to the pament and collection of# or an other matter connected with or incidental to# the fixed
tax/9
'
899D. T!x o 0"i'#lo'e" i#o$e/- +'- Notwithstanding anthing contained in this "rdinance# the
,entral Aoard of Re7enue ma# ma!e scheme of pament of tax in respect of undisclosed income/
+3- Where an person declares his undisclosed income in accordance with the scheme and the rules the
tax on such income shall 0e charged at
3
8such rate as ma 0e prescri0ed/9
+4- Where a person has paid tax on his undisclosed income in accordance with the scheme and the
rules# he shall-
+a- 0e entitled to incorporate in his 0oo!s of account such undisclosed income in tangi0le
form; and
+0- not 0e lia0le to pa an tax# charge# le7# penalt or prosecution in respect of such income
under this "rdinance/
'
Sec/ ;(D ins/ 0 %/A/'(()/
3
Words ins/ 0 %/A/'(((/
66
+:- %or the purpose of this section 6undisclosed income6 shall man an income +including na
in7estment to 0e deemed as income under section '4 or an other deemed income- for an ear or ears
'
8 9# which was chargea0le to tax 0ut was not so charged/9
3
8;(E/ Fixe" or $ii$0$ t!x/- Notwithstanding anthing contained in this "rdinance# the ,entral Aoard
of re7enue# ma ma!e a scheme for the pament of fixed or minimum tax 0 persons falling within
section 4AA of the Sales $ax Act# '((@/9
8<@/ Pro5i'io!l !''e''$et.- Where no return of total income has 0een furnished 0 an assessee for
an income ear# the Deput ,ommissioner ma# 0 an order in writing made 0efore an assessment is
made under section <3# <4 or <; assess pro7isionall the total income of the assessee and the tax paa0le
0 him on the 0asis of the assessment# if an# made under an of the said sections or under section ;( or
section ;(A for the latest preceding assessment ear/9
8<@A/ Pro5i'io!l !''e''$et i #ert!i #!'e'/- Where a concealed assets of an person 8 9 is
impounded 0 an department or agenc of the %ederal or Pro7incial Eo7ernment# the 8Deput
,ommissioner ma9# at an time# 0 an order in writing 0efore ma!ing an assessment under section <3#
<4 or <;# assess pro7isionall the total income of such person and the tax paa0le 0 him on the 0asis of
the assessment1
Pro7ided that proceedings under this section shall not 0e initiated without prior permission in
writing of the ,ommissioner/
Explanation/- %or the purpose of this section# 6concealed asset6 means an propert or asset which# in the
opinion of the 8Deput ,ommissioner9# was ac5uired from an income lia0le to tax/
8<'/ Noti#e &or +ro"0#tio o& .oo-' o& !##o0t, et#.- $he 8Deput ,ommissioner9 ma ser7e upon
an person who has furnished a return of total income for an income ear# or upon whom a notice has
0een ser7ed to furnish such return# a notice re5uiring him of a date specified therein# to attend at the
8Deput ,ommissionerGs9 office or to produce# or cause to 0e produced# an e7idence on which such
person ma rel in support of the return# if furnished and such accounts# documents or e7idence +including
accounts or documents- relating to an period prior or su0se5uent to the said income ear- as the 8Deput
,ommissioner9 ma re5uire1
Pro7ided that the 8Deput ,ommissioner9 shall not re5uire the production of an accounts relating
to a period more than three ears prior to the income ear/
4
8<'A/ Atili'!tio o& #ert!i i&or$!tio.1 $he 7alue of stoc!-in-trade determined or an other
information o0tained or collected during sur7e of an 0usiness or profession# carried out under the
Sur7e for Documentation of National Econom "rdinance# 3@@@# ma 0e used for purposes of
assessment or re-assessment of total income of the income ear during which the said sur7e is carried
out and an preceding income ear not 0eing earlier than the income ear ending 4@th da of &une# '(((#
unless there is sufficient e7idence pro7ided 0 the assessee to show that the 7alue of stoc!-in-trade or
other information as aforesaid was su0stantiall different in respect of the preceding income ear as
aforesaid/9
'
Words etc/ >rele7ant to an assessment ear or ears ending on or 0efore the thirtieeth da of &une# '(()? omitted 0
%/A/'(((/
3
Sec/ ;(E ins/ 0 %/A/'(((/
4
Sec/ <'A ins/ 0 %/ "/ 3@@@/
67
<3/ A''e''$et o +ro"0#tio o& !##o0t', e5i"e#e, et#.- +'- $he 8Deput ,ommissioner9# after
considering the e7idence on record +including e7idence# if an# produced under section <' and such other
e7idence as the 8Deput ,ommissioner9 ma re5uire# on specific points# shall# 0 an order in writing#
assess the total income of the assessee and determine the tax paa0le 0 him on the 0asis of such
assessment/
'
8Pro7ided that the assessee produces 0oo!s of accounts as e7idence in support of the return# the
Deput ,ommissioner shall# 0efore disagreeing with such accounts# gi7e a notice to the assessee of the
defects in the accounts and pro7ide an opportunit to the assessee to explain his point of 7iew a0out such
defects and record such explanation and the 0asis of computation of total income of the assessee in the
assessment order/9
+3- Where a person is authorised 0 the ,entral Aoard of Re7enue under section ) to assist the
8Deput ,ommissioner9 in ma!ing an assessment and the Deput ,ommissioner disagrees with the
opinion of such person on an point concerning assessment# the 8Deput ,ommissioner9 shall record# in
the order under su0-section +'-# the opinion of such person and the reason for his disagreement with such
opinion/
8<3A/ A''e''$et !&ter !++ell!te "e#i'io/- Where an assessment or re-assessment or an order made
under this "rdinance# has 0een annulled# set aside# cancelled or modified# the proceedings ma commence
from the stage next preceding the stage at which such annulment# setting aside# cancellation or
modification too! place and nothing contained in this "rdinance shall render necessar the re-issue of an
notice which had alread 0een issued or the re-furnishing or re-filing of an return# statement# or other
particulars which had alread 0een furnished or filed# as the case ma 0e/9
8<3A/ 2n ma!ing an assessment for the ear 0eginning on the first da of &ul# '((;# the Fincome earG
shall 0e deemed to include the period# if an comprised in the Fincome earG as defined in the repealed
clause +0- of su0-section +3<- of section 3# for which the assessment would ha7e 0een made if the said
clause had not 0een repealed and where such income ear exceeds a period of twel7e months# the total
income and the tax paa0le shall 0e prorated on the 0asis of the a7erage income of a period of twel7e
months/9
3
8 9
<4/ @e't =0"2e$et !''e''$et/- Where an person-
+a- fails to furnish a return of total income re5uired to 0e furnished 0 him under section ;<#
su0-section +4- of section )3 or su0-section +4- of section ='; or
+0- fails to compl with an of the terms of a notice issued under sections ;= 9 or <'#
the 8Deput ,ommissioner9 ma# 0 an order in writing# assess the total income of the assessee to the 0est
of his Cudgement and determine the amount of tax paa0le 0 him/
'
Pro7/ 2ns/ 0 %/A/ '((4
3
Sec/<3A/ omitted 0 %/ "/ 3@@'/ Earlier ins/ 0 %/ "/ 3@@@/
68
8<:/ Li$it!tio &or !''e''$et/- +'- No assessment under 8section ;(A9# section <3 or section <4 shall 0e
made after the expiration of two ears from the end of the assessment ear in which the total income was
first assessa0le/
+3- Notwithstanding anthing contained in su0-section +'-# where a return of total income 8 9 has 0een
filed after the end of the financial ear in which the last date of filing of such return specified in 8section
;;9 falls# no assessment under 8section ;(A#9 section <3 or section <4 shall 0e made after the expiration of
two ears from the end of the financial ear in which the said return is filed/
+4- Notwithstanding anthing contained in su0-section +'-# where# for an income ear# an assessee has
failed to furnish the return of total income# no assessment under section <3 or section <4 shall 0e made
after the expiration of two ears from the end of the financial ear in which notice under section ;<# su0-
section +4- of section )3 or su0-section +4- of section ='# as the case ma 0e# was ser7ed/
<;/ A""itio!l !''e''$et/- +'- 2f# in an ear# for an reason#-
+a- an income chargea0le to tax under this "rdinance has escaped assessment; or
+0- the total income of an assessee has 0een under assessed# or assessed at too low a rate# or
has 0een the su0Cect of excessi7e relief or refund under this ordinance; or
8+c- the total income of an assessee and the tax paa0le 0 him has 0een assessed or determined
under su0-section +'- of section ;( or section ;(A or deemed to ha7e 0een so assessed or
determined under su0-section +'- of section ;( or section ;(A#9
the 8Deput ,ommissioner9 ma# at an time# su0Cect to the pro7isions of su0-sections +3-#+4- and
+:-#issue a notice to the assessee contained all or an of the re5uirements of a notice under section ;< 8 9
and ma proceed to assess or determine# 0 an order in writing# the total income of the assessee or the tax
paa0le 0 him# as the case ma 0e# and all the pro7isions of this "rdinance shall# so far as ma 0e# appl
accordingl1
Pro7ided that the tax shall 0e charged at the rate or rates applica0le to the assessment ear for
which the assessment is made/
+3- No proceedings under su0-section +'- shall 0e initiated unless definite information has come into the
possession of the Deput ,ommissioner 8and9 he has o0tained the pre7ious appro7al of the 2nspecting
Additional ,ommissioner of 2ncome $ax in writing to do so/
8Explanation/- As used in this su0-section# 6definite information6 includes information in respect of sales
purchases# made 0 the assessee# of an goods# and an information regarding ac5uisition# possession or
transfer# 0 the assessee# of an mone# asset or 7alua0le article# or an in7estment made or expenditure
incurred 0 him/9
8+4- Notice under su0-section +'-# in respect of an income ear# ma 0e issued within ten ears from the
end of the assessment ear in which the total income of the said income ear was first assessa0le1
8Pro7ided that# where the said notice is issued on or after the first da of &ul# '(=)# this su0-
section shall ha7e effect as if for the words 6ten ears6 the words 6fi7e ears6 were su0stituted/9
69
8+4A- Where a notice under su0-section +'- is issued on or after the first da of &ul# '(=3# no order under
the said su0-section shall 0e made after the expiration of one ear from the end of the financial ear in
which such notice was ser7ed/9
8 9
<</ Li$it!tio &or !''e''$et i #ert!i #!'e'/- +'- Notwithstanding anthing contained in section
<: and su0-section +4- of section <; where in conse5uence of# or to gi7e effect to# an finding or direction
contained in an order made under this ,hapter or ,hapter B222# D222 or D2B or an order made 0 an
High ,ourt or the Supreme ,ourt of Pa!istan in exercise of its original or appellate Curisdiction#-
+a- an assessment is to 0e made on an firm or a partner of an firm; or
+0- an assessment is to 0e made on the assessee or an other person; or
+c- an assessment has 0een set aside# in full or in part# 0 an order under section '43 or section
'4; and no appeal is filed under section '4: against such order or no 8appeal filed9 under
section '4< in respect thereof# as the case ma 0e#
such assessment ma 0e made at an time within two ears in an case to which clause +a- or clause +0-
applies# and within one ear in an case to which clause +c- applies# from the end of the financial ear in
which such order is recei7ed 0 the 8Deput ,ommissioner/
+3- Where# 0 an such order# as is referred to in su0-section +'-# an income is excluded-
+i- from the total 2ncome of the assessee for an ear and held to 0e the income of another
ear;
+ii- from the total income of one person and held to 0e the income of another persons#
the assessment of such income as income of another income ear or of another person# as the case ma 0e#
shall# for the purposes of the said su0-section# 0e deemed to 0e an assessment made in conse5uence of# or
to gi7e effect to# a finding or direction contained in such order/
+4- Notwithstanding anthing contained in this "rdinance# where the ownership of an propert the
income from which is chargea0le under this "rdinance is in dispute in an ,i7il ,ourt in Pa!istan# the
assessment on an person in respect of such income ma 0e made at an time within one ear of the end
of the financial ear in which the decision of such ,ourt is 0rought# or otherwise comes# to the notice of
the Deput ,ommissioner/
8<<A/ Po/er' o& I'+e#ti2 7A""itio!l Co$$i''ioer8 to re5i'e 7De+0t, Co$$i''ioer8E' or"er/-
+'- $he 2nspecting 8Additional ,ommissioner9 ma call for and examine the record of an proceedings
under this "rdinance# and if he considers that an order passed therein 0 the 8Deput ,ommissioner9 is
erroneous in so far as it is preCudicial to the interests of re7enue# he ma# after gi7ing the assessee an
opportunit of 0eing heard and after ma!ing# or causing to 0e made# such en5uir as he deems necessar#
pass such order thereon as the circumstances of the case Custif# including an order enhancing or
modifing the assessment# or cancelling the assessment and directing a fresh assessment to 0e made/
8+'A- $he pro7isions of su0-section +'- shall# in li!e manner# appl#-
70
+a- where an appeal has 0een filed under sections '3(# '4: and '4)# or 8an appeal has 0een
filed9 under section '4<# against an order passed 0 the Deput ,ommissioner; and
+0- where an appeal 89 referred to in clause +a- has 0een decided# in respect of an point or
issue which was not the su0Cect matter of such appeal 8 9/
+3- No order under su0-section +'- shall 0e made after the expir of four ears from the date of the order
sought to 0e re7ised/
8Explanation/- %or the purpose of this section# an order preCudicial to the interests of re7enue shall include
an order passed without lawful Curisdiction/
<)/ Re&ere#e to 5!l0er'/- +'- Where# in the course of an assessment proceedings# 8the Deput
,ommissioner is of the opinion that the 7alue of an capital asset shown in an return# statement or other
document furnished 0 an assessee is not correct# he ma# either on an application 0 the assessee or
otherwise# refer the matter to a 7aluer or 7aluer for ascertaining the proper 7alue of such asset/
+3- Nothing contained in su0-section +'- shall 0e so construed as to ma!e it o0ligator on the 8Deput
,ommissioner9 to ma!e a reference to a 7aluer or 7aluers# as the case ma 0e# or to adopt the 7alue as
determined 0 an 7aluer or 7aluers/
+4- $he ,entral Aoard of Re7enue ma ma!e rules to gi7e effect to the pro7isions of this section and to
pro7ide for an matter connected with# or incidental to# the operation of this section/
71
CHAPTER BIII
TAX LIA@ILITY IN SPECIAL CASES
<=/ Re2i'tr!tio o& &ir$'/- +'- An application ma 0e made to the Deput ,ommissioner on 0ehalf of
a firm for registration of the firm for the purposes of this "rdinance/
+3- No application shall 0e made under su0-section +'- unless# 0efore the end of the income ear
rele7ant to the ear for which assessment is to 0e made#-
+a- the firm had 0een constituted 0 an instrument of partnership;
+0- the said instrument specifies# among other things# the shares of the partners; and
+c- the said 8firm9 had 0een registered under the Partnership Act# '(43 +2D of '(43-# or an
application for registration under the said Act had 0een made/
+4- An application under su0-section +'- shall 0e in such form# 0e accompanied 0 such documents# 0e
7erified in such manner and 0e made on or 0efore such date as ma 0e prescri0ed/
+:- Where the 8Deput ,ommissioner9# after ma!ing such en5uir or re5uiring the firm to furnish such
particulars# documents or e7idence as he ma thin! fit# is satisfied that the re5uirements of su0-section +3-
and +4- ha7e 0een fulfilled and that there is# or was# a genuine firm in existence in the rele7ant income
ear constituted as shown in the instrument of partnership# he ma# 0 an order in writing# made within
three months of the date on which the return of total income was filed under section ;; or six months of
the end of the income ear# whiche7er is the earlier# register the firm for the purposes of this "rdinance
and# su0Cect to the pro7isions of su0-section +;-# such firm shall 0e treated as a registered firm for the
income ear for which it is first registered and for all su0se5uent income ears for so long as there is no
change in the constitution of the firm; and if he is not so satisfied# he ma# 0 an order in writing made
within the aforesaid period# refuse to register the firm1
Pro7ided that# where no such order is made within the aforesaid period# the firm shall 0e treated as
a registered firm and all the pro7isions of this "rdinance shall# so far as ma 0e# appl as the appl in the
case of a firm registered under this su0-section/
+;- 2f# at an time after a firm has 0een registered or treated as a registered firm under su0-section +:-
for an income ear# the 8Deput ,ommissioner9 has reason to 0elie7e that-
+a- there was no genuine firm in existence in such income ear constituted as shown in the
instrument of partnership; or
+0- the re5uirements of su0-sections +3- and +4- had not 0een fulfilled in respect of the said
income ear/
he ma cancel the registration after gi7ing a reasona0le opportunit to the firm of 0eing heard/
<(/ A''e''$et o& &ir$' !" +!rter'/- +'- Notwithstanding anthing contained in this "rdinance#
where the assessee is a firm and the total income of the firm has 0een determined or assessed under
sections ;(# 8;(A# <@9# <3# <4 and <;# as the case ma 0e#-
72
+a- in the case of a registered firm#-
+i- the tax paa0le 0 the firm itself shall 0e determined;
+ii- the total income of each partner of the firm# including therein his share of its
income# profits and gains of the income ear shall 0e assessed and the sum paa0le
0 him on the 0asis of such assessment shall 0e determined;
+iii- if such share of an partner is a loss# it shall 0e set off against his other income or
carried forward and set off in accordance with the pro7isions of sections 4:# 4;# 4<#
4) and 4=;
+i7- where an of such partners is a non-resident# his share of the income# profits and
gains of the firm shall 0e assessed on the firm at the rates which would 0e
applica0le if it were assessed on him personall# and the sum so determined as
paa0le shall 0e paid 0 the firm; and
+0- in the case of an unregistered firm# the 8Deput ,ommissioner9-
+i- ma determine the tax paa0le 0 the firm on the 0asis of the total income of the
firm; or
+ii- ma proceed in the manner laid down in clause +a- as applica0le to a registered
firm# if# in his opinion# the aggregate amount of tax +including the tax paa0le under
su0-clause +i- of that clause- would 0e greater than the aggregate amount which
would 0e paa0le 0 the firm and the partners indi7iduall if the firm were assessed
as an unregistered firm1
8Pro7ided that this su0-clause shall not appl in respect of an assessment
ear commencing on or after the first da of &ul# '(=</9
+3- Whene7er the 8Deput ,ommissioner9 ma!es a determination in accordance with the pro7isions of
su0-section +'-# he shall notif to the firm# 0 an order in writing# the amount of tax paa0le 0 it# if an#
and the amount of the total income on which the determination has 0een 0ased and the apportionment
thereof 0etween the se7eral partners/
8+4- Notwithstanding anthing contained in su0-section +'- of this section or su0-section +:- of section =4#
there shall 0e included in the total income of an assessee# 0eing a partner in a firm#-
+a- share income of the spouse or a minor child of the assessee from the firm in which the
assessee is a partner; and
+0- share income of the spouse of the assessee from a firm in which the assessee is not a
partner unless the capital contri0ution# in an form# of the spouse in such firm is not
pro7ided# directl or indirectl# 0 the assessee 8 9; and
73
+c- share income of a minor child of the assessee from a firm in which the assessee is not a
partner unless the capital contri0ution# in an form# of the minor child in such firm is
deri7ed from inheritance passed on to him 8 9/
Pro7ided that nothing in this su0-section shall appl unless the assessee# in the cases
referred to in clauses +0- and +c-# and the spouse in the case referred to in clause +0-# has
0een gi7en a reasona0le opportunit of 0eing heard/
+:- %or the purposes of this section# the share of a partner in the income of an firm means the aggregate
of-
+a- the proportionate share in the total income of the firm as reduced 0 the tax# if an# paa0le
0 the firm and an sum referred to in clause +0-; and
+0- an salar# 0ro!erage# interest or commission recei7a0le 0 the partner from the firm/
)@/ Ch!2e i the #o'tit0tio o& ! &ir$/- +'- Where# at the time of ma!ing an assessment on a firm
under section <3# <4 or <; it is found that a change has occurred in the constitution of the firm# the
assessment shall 0e made on the firm as constituted at the time of ma!ing the assessment# 0ut the income
of the firm shall 0e apportioned among the partners who were entitled to recei7e it and# where the tax
assessed upon a partner cannot 0e reco7ered from him# it shall 0e reco7ered from the firm as constituted at
the time of ma!ing the assessment/
+3- $he pro7isions of su0-section +'- shall# so far as ma 0e# appl to the determination of total income
and the tax paa0le under section ;( 8or section ;(A9 as the appl to an assessment under section <3# <4
or <;/
)'/ Di'#oti0!#e o& .0'ie'' or "i''ol0tio o& ! &ir$ or !''o#i!tio o& +er'o'/- +'- Su0Cect to
the pro7isions of section )3# where an 0usiness or profession carried on 0 a firm or an association of
persons has 0een discontinued# or where a firm or an association of persons is dissol7ed# all the pro7isions
of this "rdinance# shall# so far as ma 0e# appl as if no such discontinuance or dissolution had ta!en
place/
+3- E7er person# who was# at the time of such discontinuance or dissolution# a partner of such firm or a
mem0er of such association and the legal representati7e of an such person who is deceased# shall 0e
Cointl and se7ers lia0le for the amount of tax paa0le 0 the firm or the association# as the case ma 0e/
)3/ A''e''$et i the #!'e o& "i'#oti0e" .0'ie'' or +ro&e''io/- +'- Where# in an ear# an
0usiness or profession is discontinued# the person discontinuing such 0usiness or profession shall gi7e to
the 8Deput ,ommissioner9 a notice of such discontinuance within fifteen das of the date of such
discontinuance +hereinafter referred to as the 6said date6-/
+3- 8$he person discontinuing such 0usiness or profession shall# under the pro7isions of this "rdinance or
upon 0eing re5uired 0 the 8Deput ,ommissioner9 0 a notice in writing# furnish9 a return or returns of
total income in respect of the period commencing from the end of the latest income ear for which an
order has 0een made under su0-section +'- of section ;(# 8section ;(A# <3#9 <4 or <;# or# where no such
order has 0een made# a return has 0een made under section ;;# ;< or ;)# as the case ma0e# and ending on
the said date# or where no such order or return has 0een made# the income ear or ears comprising the
period ending on the said date; and the period commencing from the end of the latest income ear to the
74
said date shall# for purposes of this section# 0e deemed to 0e an income ear +distinct and separate from
an other income ear- for the assessment ear in which the said date falls/
+4- Notwithstanding anthing contained in su0-sections +'- and +3-# the 8Deput ,ommissioner9 ma ser7e
a notice on an person who# in his opinion# has discontinued# or is li!el to discontinue# in an ear# an
0usiness or profession# to furnish# within such time as ma 0e specified in such notice# a return or returns
of total income for the income ear or ears for which the assessee is re5uired to furnish such return or
returns under su0-section +3-/
+:- $he assessment shall 0e made at the rates applica0le to the rele7ant assessment ear and all the
pro7isions of this "rdinance shall# so far as ma 0e# appl accordingl/
)4/ S0##e''io to .0'ie'', other/i'e th! o "e!th/- +'- Where a person carring on an 0usiness
or profession has 0een succeeded in an income ear 0 an other person +hereafter in this section referred
to as the 6predecessor6 and 6successor6 respecti7el-# otherwise than on the death of the predecessor# and
the successor continues to carr on that 0usiness or profession#-
+a- the predecessor shall 0e assessed in respect of the income of the income ear in which the
succession too! place up to the date of succession and of the income ear or ears
preceding that ear; and
+0- the successor shall 0e assessed in respect of the income of such income ear after the date
of succession/
+3- Notwithstanding anthing contained in su0-section +'-# where the predecessor cannot 0e found# the
assessment of the income of the income ear in which the succession too! place up to the date of
succession and of the income ear or ears preceding that ear shall 0e made on the successor in li!e
manner and to the same extent as it would ha7e 0een made on the predecessor# and all the pro7isions of
this "rdinance shall# so far as ma 0e# appl accordingl/
+4- Where an tax paa0le under this section in respect of such 0usiness or profession cannot 0e reco7ered
from the predecessor# it shall 0e reco7era0le from the successor# who shall 0e entitled to reco7er it from
the predecessor/
):/ Li!.ilit, i the #!'e o& ! "e#e!'e" +er'o/- +'- Where a person dies# his legal representati7e shall
0e lia0le to pa an tax which the deceased would ha7e 0een lia0le to pa if he had not died# in the li!e
manner and to the same extent as the deceased/
+3- %or the purpose of ma!ing an assessment of the income of the deceased and reco7er of tax#-
+a- an proceeding ta!en against the deceased 0efore his death shall 0e deemed to ha7e 0een
ta!en against the legal representati7e and ma 0e continued against the legal representati7e
from the stage at which it stood on the date of the death of the deceased; and
+0- an proceeding which could ha7e 0een ta!en against the deceased if he had sur7i7ed ma
0e ta!en against the legal representati7e/
and all the pro7isions of this "rdinance shall# so far as ma 0e# appl accordingl/
75
+4- $he legal representati7e of the deceased shall# for the purposes of this "rdinance# 0e deemed to 0e an
assessee/
+:- $he lia0ilit of a legal representati7e under this section or section )' shall 0e limited to the extent to
which the estate of the deceased person is capa0le of meeting the lia0ilit/
+;- %or the purposes of this section and sections )' and ()# 6legal representati7e6 includes an executor#
administrator and an person administering the estate of a deceased person/
);/ P!rtitio o& ! Hi"0 0"i5i"e" &!$il,/- +'- Where it is claimed 0# or on 0ehalf of# an mem0er
of a Hindu famil# hitherto assessed as undi7ided# that a partition has ta!en place among the mem0ers of
such famil# the Deput ,ommissioner shall# after gi7ing a notice to all the mem0ers of the famil and
ma!ing such en5uir as he thin!s fit# ma!e an order holding either that a partition has ta!en place with
effect from a date specified in such order or that no partition has ta!en place/
+3- Where# according to an order under su0-section +'-# the partition has ta!en place# the total income of
the Coint famil in respect of the income ear or ears comprising the period up to the date of partition
shall 0e assessed as if no partition had ta!en place and each mem0er or group of mem0ers shall# in
addition to an tax for which he or it ma 0e separatel lia0le# 0e Cointl and se7erall lia0le for the tax on
the income so assessed/
)</ Li!.ilit, i the #!'e o& ! +ri5!te #o$+!, 2oi2 ito liC0i"!tio/- +'- E7er person who is a
li5uidator of a pri7ate compan which is wound up# or who has 0een appointed the recei7er of an assets
of such compan +hereinafter referred to as the 6li5uidator6-# shall# within thirt das of his ha7ing
0ecome such li5uidator# gi7e notice of his appointment to the 8Deput ,ommissioner9 who has
Curisdiction to assess the compan/
+3- $he 8Deput ,ommissioner9 shall# after ma!ing such en5uiries or calling for such information as he
ma deem fit# notif to the li5uidator# within three months of the date of receipt of the notice referred to in
su0-section +'-# the amount which# in his opinion# would 0e sufficient to pro7ide for an tax which is then#
or is li!el thereafter to 0ecome# paa0le 0 the compan/
+4- "n 0eing notified 0 the 8Deput ,ommissioner9 under su0-section +3-# the li5uidator shall set aside an
amount e5ual to the amount so notified and until he sets aside such amount# he shall not part with an of
the assets of the compan# except for the purpose aforesaid or for ma!ing an pament to secured
creditors whose de0ts are entitled under the law to priorit of pament o7er de0ts due to Eo7ernment/
+:- 2f the li5uidator fails to compl with or contra7enes an pro7ision of su0-section +'- or su0-section
+4-# he shall 0e personall lia0le for the pament of the tax paa0le 0 the compan# not exceeding the
amount# if an# notified under su0-section +3-# and all the pro7isions of this "rdinance shall# so far as ma
0e# appl as if he were an assessee in default/
+;- $he pro7isions of this section shall ha7e effect notwithstanding anthing contained in an other law
for the time 0eing in force/
))/ Li!.ilit, &or +!,$et o& t!x i the #!'e o& +ri5!te #o$+!ie', &ir$' !" !''o#i!tio' o&
+er'o'/- +'- Notwithstanding anthing contained in the ,ompanies Act# '('4 +B22 of '('4-# where an
tax paa0le 0 a pri7ate compan +including a pri7ate compan which is wound up or has gone into
li5uidation- in respect of an income ear +whether ending 0efore or after the date of commencement of
76
the winding-up or li5uidation proceedings- cannot 0e reco7ered# e7er person who is# or was at an time
during the said income ear# a director of the compan and e7er share-holder owning not less than ten
percent of its paid-up share capital at an time during the said income ear shall 0e Cointl and se7erall
lia0le for the pament of such tax# and such person shall 0e entitled to reco7er the amount so paid 0 him
from the compan on whose 0ehalf it is paid or an other director or share-holder of the compan in
proportion to the shares owned 0 him/
+3- No proceedings under su0-section +'- shall 0e commenced except with the prior appro7al in writing of
the ,ommissioner/
+4- Where an tax paa0le 0 a partner of a firm or a mem0er of an association of persons in respect of his
share of income from the firm or the association# as the case ma 0e# cannot 0e reco7ered from him# the
8Deput ,ommissioner9 ma notif the amount of such tax to the firm or association# and thereupon#
notwithstanding anthing contained in an law for the time 0eing in force# the tax shall 0e paa0le 0 the
firm or the association# as the case ma 0e# and such firm or association shall# for purposes of reco7er of
such tax# 0e treated as an assessee; and in the case of default in ma!ing the pament of such tax# the
pro7isions of sections ('# (3# (4# (: and (; shall# so far as ma 0e# appl accordingl/
)=/ Li!.ilit, o& !2et' re+re'eti2 !''e''ee/- +'- E7er agent shall# in respect of the income for
which he is# or is declared to 0e# or is treated as# an agent# 0e deemed to 0e an assessee for the purposes of
this "rdinance and 0e su0Cect to the same o0ligations and lia0ilities as if he were the assessee# and shall 0e
lia0le to assessment in his own name in respect of that income/
+3- E7er agent who pas an tax under this "rdinance# shall 0e entitled to reco7er the tax so paid from
the person on whose 0ehalf it is paid# or to retain an e5ui7alent amount out of an mones due or
0elonging to the said person which ma 0e in his possession or come into his possession at an time/
+4- An agent# or an person who apprehends that he ma 0e assessed as an agent# ma retain out of an
mone paa0le 0 him to the person on whose 0ehalf he is lia0le to pa tax +hereinafter in this section
referred to as the FprincipalG-# a sum e5ual to his estimated lia0ilit under this "rdinance# and in the e7ent
of an disagreement 0etween the principal and such agent or person as to the amount to 0e so retained#
such agent or person ma secure from the 8Deput ,ommissioner9 a certificate stating the amount to 0e so
retained pending final determination of the tax lia0ilit# and the certificate so o0tained shall 0e his
authorit for retaining that amount/
Explanation/- %or the purposes of this section and section =@# 6agent6 includes-
+'- in respect of the income of a minor# lunatic or idiot# the guardian or manager who is
entitled to recei7e# or is in receipt of# such income on 0ehalf of such minor# lunatic or idiot;
+3- in respect of income which the ,ourt of Wards# the Administrator-Eeneral# the "fficial
$rustee or an recei7er or manger appointed 0# or under# an order of a court recei7es or
is entitled to recei7e on 0ehalf of# or for the 0enefit of# an person# such ,ourt of Wards#
Administrator-Eeneral# "fficial $rustee# recei7er or manager;
+4- in respect of income which a trustee# appointed under a trust declared 0 a dul executed
instrument in writing whether testamentar or otherwise +including an Wa!f deed which
is 7alid under the .ussalman Wa!f Balidating Act# '('4- +B2 of '('4-# recei7es or is
entitled to recei7e on 0ehalf# or for the 0enefit# of an person# such trustee or trustees; and
77
+:- in respect of the income of a non-resident-
+a- an person in Pa!istan-
+i- who is emploed 0# or on 0ehalf of# the non-resident; or
+ii- who has an 0usiness connection with the non-resident; or
+iii- from or through whom the non-resident is in receipt of an income# whether
directl or indirectl; or
+i7- who holds# or controls the receipt or disposal of# an mone 0elonging to the
non-resident; or
+7- who is the trustee of the non-resident; or
+0- an person# whether a resident or a non-resident# who has ac5uired# 0 means of a transfer#
a capital asset in Pa!istan; or
+c- an person# who is declared or treated as an agent of the non-resident1
Pro7ided that-
+a- a 0ona fide independent 0ro!er in Pa!istan who# in respect of an transactions# does not
deal directl with# or on 0ehalf of# a non-resident principal 0ut deals with# or through# a
non-resident 0ro!er# shall not 0e treated as an agent under this section in respect of such
transactions# if-
+i- the transactions are carried on in the ordinar course of 0usiness through the first-
mentioned 0ro!er; and
+ii- the non-resident 0ro!er is carring on such transactions in the ordinar course of his
0usiness and not as a principal; and
+0- no person shall 0e declared or treated as the agent of a non-resident unless he has 0een
gi7en an opportunit# 0 the 8Deput ,ommissioner9# of 0eing heard/
+:- Nothing in this section shall pre7ent either the direct assessment of the person on whose 0ehalf# or for
whose 0enefit# an such income is recei7a0le# or the reco7er from such person of the tax paa0le in
respect of such income/
8)(/ I#o$e &ro$ tr!'!#tio' /ith o1re'i"et/- Where 0usiness is carried on 0etween a resident and
a non-resident and it appears to the on 8Deput ,ommissioner9 that conditions are made or imposed
0etween them in their commercial or financial transactions which differ from those which would 0e made
0etween independent persons# the 2ncome $ax "fficer shall determine the amount of profits which would
ha7e accrued to the resident 0ut# 0 reason of those conditions# ha7e not so accrued# and include such
amount in the total income of the resident/9
78
=@/ Shi++i2 .0'ie'' o& o1re'i"et'/- +'- Notwithstanding anthing contained in this "rdinance#
where a non-resident carries on 0usiness of operation of ships as the owner or charterer thereof
+hereinafter in this section referred to as the FprincipalG- tax shall 0e le7ied and collected in respect of such
0usiness in accordance with the pro7isions of this section/
+3- Aefore the departure from an port in Pa!istan of an ship# the master of the ship shall prepare and
furnish to the Deput ,ommissioner a return showing +a- the amount paid or paa0le +whether in or out of
Pa!istan- to the principal# or to an person on his 0ehalf# on account of the carriage of passengers#
li7estoc!# mail or goods shipped at that port since the last arri7al of the ship and +0- the amount recei7ed#
or deemed to 0e recei7ed# in Pa!istan 0# or on 0ehalf of# the principal on account of the carriage of
passengers# li7estoc!# mail or goods at an port outside Pa!istan/
+4- "n receipt of the return# the 8Deput ,ommissioner9 shall determine the aggregate of the amounts
referred to in su0-section +3- and# for this purpose# ma call for such particulars# accounts or documents#
as he ma re5uire and the aggregate of the said amounts so determined shall 0e deemed to 0e income
recei7ed in Pa!istan 0 the principal from the said 0usiness chargea0le to tax under this "rdinance under
the head F2ncome from 0usiness or professionG and tax thereon shall 0e charged at the rate of eight per cent
of such income/
+:- Where the 8Deput ,ommissioner9 is satisfied that it is not possi0le for the master of the ship or
the principal to furnish the return re5uired under su0-section +3- 0efore the departure of the ship from the
port and the principal has made satisfactor arrangements for the filing of the return and pament of the
tax 0 an other person on his 0ehalf# the 8Deput ,ommissioner9 ma# if the return is filed within thirt
das of the departure of the ship# deem the filing of the return 0 the person so authorised 0 the principal
as sufficient compliance with su0-section +3-
+;- No port clearance shall 0e granted to the ship until the ,ollector of ,ustoms# or other officer dul
authorised to grant the same# is satisfied that the tax paa0le under su0-section +4- has 0een dul paid or
that satisfactor arrangements ha7e 0een made for the pament thereof/
8+<- Nothing contained in this "rdinance shall 0e so construed as to allow an expense against the
aggregate amount of receipts as determined under su0-section +4-/
+)- $he tax paid under this section shall 0e deemed to 0e the final discharge of the tax lia0ilit of the
assessee under this "rdinance# and the assessee shall not 0e re5uired to file the return of total income
under section ;; nor shall he 0e entitled to claim an refund or adCustment on the 0asis of such return/9
8=@A/ Air tr!'+ort .0'ie'' o& o1re'i"et'/-8+'- Notwithstanding anthing contained in this
"rdinance# where a non-resident person carries on the 0usiness of operation of aircrafts# as the owner or
charterer thereof +hereafter in this section referred to as the 6principal6-# the aggregate of the receipts
specified in su0-section +'A- shall 0e deemed to 0e income recei7ed in Pa!istan 0 the principal from the
said 0usiness chargea0le to tax under the head 62ncome from 0usiness or profession6 and tax thereon shall
0e charged at the rate of three per cent of such income/
+'A- $he receipts# referred to in su0-section +'-# shall 0e the following# namel1-
+a- the amount paid or paa0le +whether in or out of Pa!istan- to the principal or to an person
on his 0ehalf on account of the carriage of passengers# li7estoc!# mail or goods loaded from
an place in Pa!istan; and
79
+0- the amount recei7ed or deemed to 0e recei7ed in Pa!istan 0 or on 0ehalf of the principal
on account of the carriage of passengers# li7estoc!# mail or goods from an place outside
Pa!istan/9
+3- $he principal or an agent authorised 0 him in this 0ehalf shall prepare and furnish to the Deput
,ommissioner# within fort-fi7e das from the last da of each 5uarter of e7er financial ear# that is to
sa# the thirtieth da of Septem0er# the thirt-first da of Decem0er# the thirt-first of .arch and the
thirtieth da of &une# respecti7el# a return# in respect of each 5uarter as aforesaid# showing the receipts
referred to in su0-section +'A-/
+4- "n receipt of the return# the 8Deput ,ommissioner9 ma# after calling for such particulars#
accounts or documents as he ma re5uire# determine the aggregate of the amounts referred to in su0-
section 8+'A-9 and charge tax as laid down in su0-section +'-/
+:- Where the principal fails to pa tax as determined under su0-section +'-# for more than three
months# the ,ommissioner of 2ncome $ax ma issue to the authorit 0 whom clearance ma 0e granted
to that aircraft a certificate containing the name of the principal and the amount of tax paa0le 0 him;
and# on receipt of such certificate# the said authorit shall 0e empowered and re5uired to refuse clearance
from an airport in Pa!istan to an aircraft owned or chartered 0 such person until the tax paa0le has
0een paid/
+;- Nothing contained in this "rdinance shall so construed as to allow an expense against the
aggregate amount of receipts as determined under su0-section +'A-/
+<- $he tax paid under this section shall 0e deemed to 0e the final discharge of the tax lia0ilit of the
assessee under this "rdinance# and the assessee shall not 0e re5uired to file the return of total income
under section ;; nor shall he 0e entitled to claim an refund or adCustment on the 0asis of such return/
8=@AA/ T!x o i#o$e o& o1re'i"et' &ro$ &ee' &or te#hi#!l 'er5i#e'/- +'- Notwithstanding anthing
contained in this "rdinance# where an consideration 0 wa of fees for technical ser7ices referred to in
the Explanation to su0-section +;- of section '3 is recei7ed or is deemed to 0e recei7ed 0# or accrues or
arises or is deemed to accrue or arise to# a non-resident# the whole f such consideration shall 0e deemed to
0e income of the non-resident and tax thereon shall 0e charged at the rate of 8fifteen9 per cent of such
income/
+3- A non-resident referred too in su0-section +'-# or an agent authorised 0 him in this 0ehalf# shall
prepare and furnish to the 8Deput ,ommissioner9within thirt das from the last da of each period of six
months in e7er financial ear# that is to sa# the thirt-first da of Decem0er and the thirtieth da of &une#
respecti7el# a return# in respect of each such period of six months as aforesaid# showing therein full
particulars of the income referred to in the said su0-section1
Pro7ided that# where such non-resident is li!el to lea7e Pa!istan in an six month period as
aforesaid or shortl after its expir and he has no present intention of returning to Pa!istan# the pro7isions
of section =' shall# so far as ma 0e# appl as if references to financial ear# the return of total income# the
income ear# the order of assessment# the assessment ear and rate of tax were references to the
corresponding pro7isions of this section/
80
+4- "n receipt of such return# the 8Deput ,ommissioner9 ma# after calling for such particulars# accounts
or documents as he ma re5uire# determine the income referred to in su0-section +3- and charge tax
thereon in accordance with the pro7isions of this section/
+:- Nothing contained in this "rdinance shall 0e so construed as to allow an expense against the income
determined under su0-section +4-/
+;- $he tax paid under this section shall# to the extent that the income of the non-resident is chargea0le
under this section# 0e deemed to 0e the final discharge of his tax lia0ilit under this "rdinance# and he
shall not 0e re5uired to file the return of total income under section ;; or 0e entitled to claim an refund or
adCustment on the 0asis of such return/
+<- $he pro7isions of this section shall not appl to a non-resident in respect of an consideration referred
to in su0-section +'- for rendering technical da of &une# '(=)/
'
8?4AAA. T!x o i#o$e o& o1re'i"et' &ro$ ro,!lt,.- +'- Notwithstanding anthing contained in
this "rdinance where an consideration 0 wa of roalt# referred to in the Explanation to su0-section +:-
of section '3 is recei7ed or is deemed to 0e recei7ed 0# or accrues or arises or is deemed to accrue or
arise to# a non-resident# the whole of such consideration shall 0e deemed to 0e income of the non-resident
and tax thereon shall 0e charged at the rate of fifteen per cent of such income/
+3- A non-resident referred to in su0-section +'-# or an agent authorised 0 the non-resident to recei7e such
roalt on his 0ehalf# shall prepare and furnish to the Deput ,ommissioner within thirt das from the
last da of each period of six months in e7er financial ear# that is to sa# the thirt-first da of Decem0er
and the thirtieth da of &une respecti7el# a return# in respect of each such period of six months as
aforesaid# showing therein full particulars of the income referred to in the said su0-section and tax
deducted thereon/
+4- "n receipt of such return# the Deput ,ommissioner ma# after calling for such particulars# accounts or
documents as he ma re5uire# determine the income referred to in-su0section +3- and charge tax thereon in
accordance with the pro7isions of this section/
+:- Nothing contained in this "rdinance shall 0e so construed as to allow an expense against the income
determined under su0-section +4-/
+;- $he tax paid under this section shall# to the extent that the income of the non-resident is chargea0le
under this section# 0e deemed to 0e the final discharge of his tax lia0ilit under this "rdinance and he shall
not 0e re5uired to file the return of total income under section ;; nor shall claim an refund or adCustment
on the 0asis of such return/9
8=@A/ T!x o i#o$e o& #ert!i +er'o' &ro$ "i5i"e"' !" .!- +ro&it', et#/- +'- Notwithstanding
anthing contained in this "rdinance or an other law for the time 0eing in force# where an amount
referred to in su0-section +3- is recei7ed 0 or accrues or arises or is deemed to accrue or arise to an
indi7idual# unregistered firm# association of persons# Hindu undi7ided famil or artificial Curidical person
referred to in clause +43- of section 3# the whole of such amount shall 0e deemed to 0e income of such
person and tax thereon shall 0e charged at the rates specified in the %irst Schedule/
'
Sec/ =@AAA ins/ 0 %/A/'(((/
81
+3- $he amount referred to in su0-section +'- shall 0e the following namel1-
+a- di7idend on which tax is deducti0le under su0-section +<A- of section ;@;
'
8+aa- interest or profit on Directorate of National Sa7ingsG regular income certificates and monthl
income sa7ings account scheme where monthl installment exceeds one thousand rupees# in
which in7estment is made upto thirtieth &une# 3@@'/9
+0- interest or profit on which tax is deducti0le under su0-section +3A- of section ;@;
8+00- the amount recei7ed on encashment of 0earer certificates on which tax is deducti0le under
su0-section +;A- of section ;@819
3
8Pro7ided that this clause shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3;9
+c- interest or profit on which tax is deducti0le under su0-section +)D- of section ;@819
4
8Pro7ided that this clause shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3;?;
+d- priHes and winnings on which tax is deducti0le or collecta0le under su0-section +),- of
section ;@/
+4- Nothing contained in this "rdinance shall 0e so construed as to authorise an allowance or deduction
against the income as determined under su0-section +'- or an refund of tax deducted or collected under
section ;@ or set off of an loss under an pro7ision of this "rdinance/
+:- Where the assessee has no income other than the income referred to in su0-section +'- in respect of
which tax has 0een deducted or collected# the tax deducted or collected under section ;@ shall 0e deemed
to 0e the final discharge of the tax lia0ilit of the assessee under this "rdinance and he shall not 0e
re5uired to file the return of total income under section ;;/
+;- 2n a case to which su0-section +:- applies# an order under section ;(A shall 0e deemed to ha7e 0een
made in respect of income referred to in su0-section +'-/9
:
8?4@@. T!x o i#o$e o& 2oo"' tr!'+ort 5ehi#le' o/er'. +'- Notwithstanding anthing contained in
this "rdinance or an other law for the time 0eing in force# where an tax is withheld in accordance with
su0-section +<- of section ;@ at the rates specified in su0-paragraph +2- of paragraph E of the %irst
Schedule# from an person 0eing the owner of a goods transport 7ehicle# the tax so collected shall 0e
deemed to 0e the final discharge of the tax lia0ilit of such person under this "rdinance in respect of
income deri7ed from pling of goods transport 7ehicles and he shall not 0e re5uired to file the return of
total income under section ;;/
'
,l/+aa- ins/ 0 %/ "/ 3@@'/
3
Pro7iso ins/ 0 %/ "/ 3@@'/
4
Pro7iso ins/ibid/
:
Sec/=@AA ins/ 0 %/ "/ 3@@@/
82
+3- 2n a case to which su0-section +'- applies# an order under section ;(A shall 0e deemed to ha7e 0een
made in respect of income referred to in su0-section +'-/?;
8=@,/ T!x o i#o$e o& #ert!i #otr!#tor' !" i$+orter'/- +'- Notwithstanding anthing contained
in this "rdinance or an other law for the time 0eing in force# where an amount referred to in su0-section
+3- is recei7ed 0 or accrues or arises or is deemed to accrue or arise to an person 8 9 the whole of such
amount shall 0e deemed to 0e income of the said person and tax thereon shall 0e charged at the rate
specified in the %irst Schedule/
8+3- $he amount referred to in su0-section +'- shall 0e the following namel1-
+a- Where the person is a resident#-
+i- the amount representing paments on which tax is deducti0le under su0-section +:-
of section ;@# other than paments on account of ser7ices rendered
'
80 doctors#
lawers# accountants# auditors# architects# sur7eors# actuaries# engineers# ad7isors
and consultants9;
3
8+ia- the amount representing paments from which tax is deducti0le under su0-section
+:A- of section ;@;9
+ii- the amount as computed for the purpose of collection of tax under su0-section +;- of
section ;@ in respect of goods imported# not 0eing goods imported 0 an industrial
underta!ing as raw material for its own consumption; 8 9
4
8+iia- the amount on which tax is collecta0le under su0-section +;AAA- of section ;@;9
:
8+iii- the amount on which tax is deducti0le under su0-section +)A- of section ;@ in respect
of lease of right to collect octroi duties# tolls# fees or other le7ies# 0 whate7er
named called;9


;
8+i7- the amount on which tax is deducti0le under su0-section +)H- of section ;@; and
+0- where the person is a non-resident# the amount representing paments on account of
execution of a contract for construction# assem0l or li!e proCect in Pa!istan on which tax
is deducti0le under su0-section +:- of section ;@819
<
8Pro7ided that nothing in this section shall appl to amounts referred to in clauses +ia-# +iia- and +iii-
of su0-section +3- in respect of an assessment ear commencing on# or after# the first da of &ul# 3@@3/9
'
Words >0 doctors# lawers# accountants# auditors# architects# sur7eors# actuaries# engineers# ad7isors and consultants6
omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A// '(((/
3
,l/ +ia- ins/ 0 %/A/'(((/
4
,l/ +iia- ins/ 0 %/A/'(((/
:
,l/ +iii- ins/ 0 %/A/'((< w/e/f/ '(()-(= onwards/
;
,l/+i7- ins/ i0id/
<
Pro7iso added 0 %/"/ 3@@'/
83
+4- Nothing contained in this "rdinance shall 0e so construed as to authorise an allowance or deduction
against the income as determined under su0-section +'- or an refund of tax deducted or collected under
section ;@ or set off of an loss under an pro7ision of this "rdinance/
+:- Where the assessee has no income other than the income referred to in su0-section +'- in respect of
which tax has 0een deducted or collected# the tax deducted or collected under section ;@ shall 0e deemed
to 0e the final discharge of his tax lia0ilit under this "rdinance and he shall not 0e re5uired to file the
return of total income under section ;; 819
Pro7ided that# in respect of the assessment ear commencing on the first da of &ul# '(('# where
the tax deducted or collected in the preceding financial ear under su0-section +:- or su0-section +;- of
section ;@ is less than the tax paa0le under this section# the tax so deducted or collected shall not
constitute full and final discharge of the tax lia0ilit of the assessee and he shall 0e re5uired to pa the
amount representing the difference 0etween the tax paa0le under this section and the tax so deducted or
collected and all the pro7isions of this "rdinance shall appl accordingl819
8Pro7ided further that where the tax deducted or collected under an su0-section of section ;@
specified in clause +a- of su0-section +3- is# for an reason# not collected or deducted in accordance with
the said su0-section or the tax so deducted in less than the amount deducti0le or collecta0le# the assessee
shall 0e re5uired to pa the said amount/9
+;- Where an assessee# while explaining the nature and source of an sum# in7estment# mone# 7alua0le
article# excess amount or expenditure# referred to in section '4# ta!es into account an source of income
which is su0Cect to tax in accordance with the pro7isions of this section# he shall not 0e entitled to ta!e
credit of an sum as is in excess of an amount which if taxed at a rate or rates# other than the rate
applica0le to income chargea0le to tax under this section# would ha7e resulted in tax lia0ilit e5ual to the
tax paa0le in respect of income under this section/
'
8+;A- Where an assessee deri7es income from an source which is su0Cect to tax in accordance with the
pro7isions of this section# and the tax lia0ilit is less than the tax paa0le on such income had it not 0een
chargea0le to tax under this section# the difference in tax shall 0e paa0le in accordance with section ;:
along with the return of income# pro7isions of su0-section +:- notwithstanding/9
+<- %or the purpose of determining the share of a partner of a firm out of such income of the firm as is
determined under section =@A or this section# the said income of the firm shall 0e ta!en to 0e an amount
which if taxed at the rate or rates# other than the rate applica0le to income chargea0le to tax under section
=@A or this section# would ha7e resulted in tax lia0ilit e5ual to the tax paa0le in respect of income under
section =@A or this section/
+)- 2n a case to which su0-section +:- applies# an order under section ;(A shall 0e deemed to ha7e 0een
made in respect of income referred to in su0-section +'-/9
8=@,,/ T!x o i#o$e o& #ert!i ex+orter'/- +'- Notwithstanding anthing contained in this "rdinance
or an other law for the time 0eing in force# where an amount referred to in su0-section +;A- 8or su0-
section +;AA-9# of section ;@ is recei7ed 0 an person# the whole of such amount shall 0e deemed to 0e
the income of the said person and tax there on shall 0e charged at the rates specified in the %irst Schedule/
'
Su0-sec +;A- omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/A/'(((/
84
+3- Nothing contained in this "rdinance shall 0e so construed as to authorise an allowance or deduction
against the income as determined under su0-section +'- or an refund of tax deducted under su0-section
+;A- of section ;@ or set off of an loss under an pro7ision of this "rdinance/
+4- Where the assessee has no income other than the income referred to in su0-section +'- in respect of
which tax has 0een deducted under su0-section +;A- of section ;@# the tax so deducted shall 0e deemed to
0e the final discharge of his tax lia0ilit under this "rdinance and he shall not 0e re5uired to file the return
of total income under section ;;/9
8+:- Where an assessee# while explaining the nature and source of an sum# in7estment# mone# 7alua0le
article# excess amount or expenditure# referred to in section '4# ta!es into account an source of income
which is su0Cect to tax in accordance with the pro7isions of this section# he shall not 0e entitled to ta!e
credit of an sum as is in excess of an amount which if taxed at a rate or rates# other than the rate
applica0le to income chargea0le to tax under this section# would ha7e resulted in tax lia0ilit e5ual to the
tax paa0le in respect of income under this section/
+;- %or the purpose of determining the share of a partner of a firm out of such income of the firm as is
determined under section =@A or this section# the said income of the firm shall 0e ta!en to 0e an amount
which if taxed at the rate or rates# other than the rate applica0le to income chargea0le to tax under section
=@A or this section# would ha7e resulted in tax lia0ilit e5ual to the tax paa0le in respect of income under
section =@A or this section/
+<- 2n a case to which su0-section +:- applies# an order under section ;(A shall 0e deemed to ha7e 0een
made in respect of income referred to in su0-section +'-/9
'
8?4CD. T!x o i#o$e o& i"0'tri!l 0"ert!-i2' lo#!te" i Ex+ort Pro#e''i2 Foe'. +'-
Notwithstanding anthing contained in this "rdinance or an other law for the time 0eing in force# where
an goods referred to in su0-section +;AAA- of section ;@ are exported 0 an person# the 7alue of such
goods shall 0e deemed to 0e the income of the said person and tax thereon shall 0e charged at the rates
specified in the %irst Schedule/
+3- Nothing contained in this "rdinance shall 0e so construed as to authorise an allowance or deduction
against the income as determined under su0-section +'- or an refund of tax collected under su0-section
+;AAA- of section ;@ or set off of an loss under an pro7ision of this "rdinance/

+4- Where the assessee has no income other than the income referred to in su0-section +'- in respect of
which tax has 0een deducted under su0-section +;AAA- of section ;@# the tax
so deducted shall 0e deemed to 0e the final discharge of his tax lia0ilit under this "rdinance and he shall
not 0e re5uired to file the return of total income under section ;;/
+:- Where an assessee while explaining the nature and source of an sum# in7estment# mone# 7aluea0le
article# excess amount or expenditure# referred to in section '4# ta!es into account an source of income
which is su0Cect to tax in accordance with the pro7ision of this section# he shall not 0e entitled to credit of
an sum as is in excess of an amount which if taxed at a rate or rates# other than the rate applica0le to
income chargea0le to tax under this section# would ha7e resulted in tax lia0ilit e5ual to the tax paa0le in
respect of income under this section/
'
Sec/ =@,D ins/ 0 %/ "/ 3@@@/
85
+;- 2n a case to which su0-section +4- applies# an order under section ;(A shall 0e deemed to ha7e 0een
made in respect of income referred to in su0-section +'-/9
8=@D/ Mii$0$ t!x o i#o$e o& #ert!i 7+er'o'9/ +'- Notwithstanding anthing contained in this
"rdinance or an other law for the time 0eing in force# where no tax is paa0le 8or paid9 0 a compan or
a registered firm 8# an indi7idual# an association of persons# an unregistered firm or a Hindu undi7ided
famil which# not 0eing a compan# does not 5ualif for assessment under the self assessment scheme
under su0-section +'- of section ;(9 resident in Pa!istan or the tax paa0le or paid is less than on-half per
cent of the amount representing its turno7er from all sources# the aggregate of the declared turno7er shall
0e deemed to 0e the income of the said compan or a registered firm 8# an indi7idual# an association of
persons# an unregistered firm or a Hindu undi7ided famil which# not 0eing a compan# does not 5ualif
for assessment under the self assessment scheme under su0-section +'- of section ;(9 and tax thereon shall
0e charged in the manner specified in su0-section +3-/
8Explanation/- %or the remo7al of dou0t# it is declared that the expression 6where no tax is paa0le or
paid6 and 6or the tax paa0le or paid6 appl to all cases where tax is not paa0le or paid for an reason
whatsoe7er including an loss of income# profits or gains or set off of loss of earlier ears# exemption
from tax# credits or re0ates in tax# and allowances and deductions +including depreciation- admissi0le
under an pro7ision of this "rdinance or an other law for the time 0eing in forced/9
+3- $he compan or a registered firm
'
8# an indi7idual# an association of persons# an unregistered firm or a
Hindu undi7ided famil which# not 0eing a compan# does not 5ualif for assessment under the self
assessment scheme under su0-section +'- of section ;(9 referred to in su0-section +'- shall pa as income
tax-
+a- an amount# where no tax is paa0le or paid e5ual to one-half per cent of the said turno7er;
and
+0- an amount# where the tax paa0le or paid is less than one-half per cent of the said turno7er#
e5ual to the difference 0etween the tax paa0le 8or paid9 and the amount calculated in
accordance with clause +a-/
Explanation1 %or the remo7al of dou0t it is declared that 6turno7er6 means the gross receipts#
exclusi7e of trade discount shown on in7oices or 0ills# deri7ed from the sale of goods or from rendering#
gi7ing or suppling ser7ices or 0enefits or from execution of contracts/
3
8+4- Nothing in this section shall appl to an indi7idual# an association of persons# an unregistered firm or
a Hindu undi7ided famil in respect of an assessment ear commencing on# or after# the first da of &ul#
3@@'/9
8=@DD/ Mii$0$ t!x o i#o$e o& i$+orter' o& e"i.le oil', et#.- Notwithstanding anthing contained
in this "rdinance# or an other law for the time 0eing in force# the tax collected under su0-section +;- of
section ;@ on import of edi0le oils as raw material 0 an industrial underta!ing shall 0e deemed to 0e the
minimum amount of tax paa0le under this "rdinance and where the final tax lia0ilit determined under
'
Words etc/ ins/ 0 %/A/'(((/
3
Su0-sec/+4- added 0 %/ "/ 3@@'/
86
this "rdinance exceeds the amount collected under the said su0-section# the said amount shall 0e
adCusta0le against such lia0ilit
4
8/9
=@E/ Mii$0$ t!x o i#o$e o& #ert!i +er'o'/- +'- Notwithstanding anthing contained in the
"rdinance# where a person 0eing an indi7idual# unregistered firm# association of persons# Hindu undi7ided
famil is lia0le to Fturno7er taxG in accordance with section 4A of Sales $ax Act# '((@# he ma# for the
assessment ear commencing on or after 'st da of &ul# 3@@@# opt for pament of tax# in accordance with
the pro7isions of this section# on his income to which such turno7er relates/
+3- %or the purposes of this section# the turno7er on which sales tax is paa0le under the Sales $ax
Act# '((@# shall 0e deemed to 0e the income of such person and tax e5ual to one per cent of turno7er shall
0e paa0le along with the sales tax returns/
+4- $he tax paid under this section shall# to the extent that the income of a person is chargea0le to tax
under this section# 0e deemed to 0e the final discharge of his tax lia0ilit under this "rdinance# and he
shall not 0e re5uired to file the return of total income under section ;; nor shall 0e entitled to claim an
refund or adCustment/
Pro7ided that where the tax so paid is less than the tax paa0le on the last assessed income under
the "rdinance; the tax so paid shall not constitute full and final discharge of the tax lia0ilit of the
assessee# and he shall 0e re5uired to pa the amount representing the difference 0etween the tax paa0le
under this section and the tax so paid and all the pro7isions of this "rdinance shall appl accordingl/9
='/ A''e''$et o& +er'o' !.o0t to le!5e P!-i't!/- +'- Where an person is li!el to lea7e Pa!istan
in the current financial ear or shortl after its expir and has no present intention of returning to Pa!istan#
he shall gi7e to the 8Deput ,ommissioner9 a notice to that effect not less than fifteen das 0efore the
pro0a0le date of his departure +hereinafter in this section referred to as the Fsaid dateG-/
+3- $he notice under su0-section +'- shall 0e accompanied 0 a return or returns of total income in respect
of the period commencing from the end of the latest income ear for which an order has 0een made under
su0-section +'- of section ;(# section <3# <4 or <;# or# where no such order has 0een made# a return has
0een made under section ;;# ;< or ;)# as the case ma 0e# and ending on the said date# or where no such
order or return has 0een made# the income ear or ears comprising the period ending on the said date;
and the period commencing from the end of the latest income ear to the said date shall# for purposes of
this section# 0e deemed to 0e an income ear +distinct and separate from an other income ear- for the
assessment ear in which the said date falls/
+4- Notwithstanding anthing contained in su0-sections +'- and +3-# the 8Deput ,ommissioner9 ma ser7e
a notice on an person who# in his opinion# is li!el to lea7e Pa!istan during the current financial ear or
shortl after its expir and has no present intention of returning to Pa!istan to furnish# within such time as
ma 0e specified in such notice# a return or returns of total income for the income ear or ears for which
the assessee is re5uired to furnish such return or returns under su0-section +3-/
+:- $he assessment shall 0e made at the rates applica0le to the rele7ant assessment ear and all the
pro7isions of this "rdinance shall# so far as ma 0e# appl accordingl/
4
Words >of the said industrial underta!ing? omitted 0 %/ "/ 3@@@/
87
=3/ Per'o' le!5i2 P!-i't! to o.t!i t!x #le!r!#e #erti&i#!te/- +'- Su0Cect to such exceptions as
ma 0e made 0 the ,entral Aoard of Re7enue# no person who is not domiciled in Pa!istan or who# 0eing
domiciled in Pa!istan at the time of his departure# has no intention of returning to Pa!istan or# in the
opinion of an income tax authorit# is not li!el to return to Pa!istan# shall lea7e Pa!istan either 0 land#
sea or air# unless he first o0tains from the 8Deput ,ommissioner9# authorised in this 0ehalf 0 the ,entral
Aoard of Re7enue# a certificate stating that he has no lia0ilities under this "rdinance# the repealed Act# the
Estate Dut Act# '(;@ +D of '(;@-# the Sales $ax Act# '(;' +222 of '(;'-# the Eift $ax Act# '(<4 +D2B of
'(<4- or the Wealth $ax Act# '(<4 +DB of '(<4-# or that satisfactor arrangements ha7e 0een made for
the pament of all such taxes and duties which are or ma 0ecome paa0le 0 that person/
+3- Notwithstanding anthing contained in su0-section +'-# in the case of a person not domiciled in
Pa!istan# the 8Deput ,ommissioner9 ma# if he is satisfied that such person intends to return to Pa!istan#
issue an exemption certificate in respect of an Courne or Cournes to 0e underta!en 0 that person within
such period as ma 0e specified in the certificate/
+4- 2f the owner or charterer of an ship or aircraft carring persons from an place in Pa!istan to an
place outside Pa!istan allows an person to whom su0-section +'- applies to tra7el 0 such ship or aircraft
without first satisfing himself that such person is in possession of a certificate as re5uired 0 su0-section
+'- or su0-section +3-# he shall 0e personall lia0le to pa the amount of tax# if an# paa0le 0 such
person and all the pro7isions of this "rdinance shall# so far as ma 0e# appl accordingl/
+:- %or the purposes of this section# the expression 6owner6 and 6charterer6 include an representati7e#
agent or emploee empowered 0 the owner or charterer to allow persons too tra7el 0 the ship or aircraft#
as the case ma 0e/
=4/ I#o$e &ro$ re5o#!.le tr!'&er o& !''et', et#.- +'- All income arising to an person 0 7irtue of
re7oca0le transfer of assets shall 0e chargea0le to tax as the income of the transferor and shall 0e included
in his total income/
+3- $he pro7isions of su0-section +'- shall not appl to an income arising to an person 0 7irtue of a
transfer which is not re7oca0le during the life-time of the 0eneficiar and the transferor deri7es no direct
or indirect 0enefit from such income/
+4- All income arising 0 7irtue of a transfer# whether re7oca0le or not# and whether effected 0efore or
after the commencement of this "rdinance shall# where the assets remain the propert of the transferor 0e
chargea0le to tax as the income of the transferor and shall 0e included in his total income/
+:- All income deri7ed from an asset transferred 0 an assessee directl or indirectl to-
+a- his spouse# otherwise than 8 9 for ade5uate consideration# or in connection with an
agreement to li7e apart; or
+0- an minor child of the assessee otherwise than for ade5uate consideration; or
+c- an person for the 0enefit of his spouse or an minor child# or 0oth# otherwise than 8 9 for
ade5uate consideration#
shall 0e chargea0le to tax as the income of the transferor# and shall 0e included in his total income819
88
'
8Pro7ided that where a transferor fails to produce e7idence of transfer of an asset 0 wa of its
registration or mutation in the rele7ant record# income arising from such asset shall 0e chargea0le to tax as
the income of the transferor and shall 0e included in his total income/9
+;- %or the purpose of this section#-
+a- a transfer shall 0e deemed to 0e re7oca0le if-
+i- it contains an pro7ision for the re-transfer directl or indirectl of the whole or an
part of the assets to the transferor# or
+ii- it gi7es# in an wa# the transferor a right to resume power# directl or indirectl
o7er the whole or na part of the assets;
+0- 6transfer6 includes an disposition# settlement# trust# co7enant# agreement or arrangement;
and
+c- 6minor child6 does not include a married daughter//
8=4A/ I#o$e o& $ior #hil"/- An income chargea0le under the head 62ncome from 0usiness or
profession6 which is recei7ed 0 or arises or accrues# or is deemed to arise or accrue to an minor child of
the assessee# such income shall 0e deemed to 0e the income of the assessee1
Pro7ided that the pro7isions of this section shall not appl where the income of the minor child is deri7ed
from a 0usiness ac5uired 0 him through inheritance/
Explanation/- %or the purpose of this section# 6assessee6 shall 0e the parent determined 0 the SDeput
,ommissioner/T9
=:/ Li!.ilit, #ert!i i tr!'!#tio' i 'e#0ritie'/- +'- Where the owner of an securities sells or
transfers in an manner those securities and thereafter 0us 0ac! or re-ac5uires them and the result of the
transaction is that an interest 0ecoming paa0le in respect thereof is recei7a0le 0 an person other than
the said owner# the interest so paa0le shall 0e deemed to 0e the income of the said owner and not of an
other person and all the pro7isions of this "rdinance shall# so far as ma 0e# appl accordingl/
+3- %or the purpose of su0-section +'-# 6interest6 includes di7idends# and 6securities6 includes stoc!s and
shares/
'
Pro7iso ins/ 0 %/ "/ 3@@@/
89
CHAPTER IX
RECOBERY OF TAX
=;/ Pament of tax on demand/-8+'-9 Where an tax is paa0le in conse5uence of an assessment or other
order under this "rdinance# the 8Deput ,ommissioner9 shall ser7e upon the assessee# or an other person
lia0le to an such tax on 0ehalf of the assessee# a notice of demand in the prescri0ed form specifing the
sum paa0le; and thereupon the sum so specified shall 0e paid to the credit of the %ederal Eo7ernment
within the time specified in the said notice/
8+3- Notwithstanding anthing contained in su0-section +'-# where the assessee or an other person on
whom a notice under the said su0-section has 0een ser7ed ma!es an application for granting sta of
pament of tax or for allowing pament in installments# the 2nspecting 8Additional ,ommissioner9 ma#
su0Cect to the pro7isions of section =(# sta the pament of tax till such time as he thin!s fit or allow the
pament of tax in such instalments as he ma determine8/99
8 9
=</ ,harge of additional tax for failure to deduct and pa tax/- Where an person fails to deduct# or
ha7ing deducted# fails to pa an tax# as re5uired 0 section ;@# such person shall# without preCudice to
an other lia0ilit which he ma incur# 0e lia0le to pa additional tax at the rate of 86twent four69 percent
per annum on the amount not paid for the period commencing from the date on which he was re5uired to
pa such tax to the date of the pament thereof/
=)/ ,harge of additional tax for failure to pa ad7ance tax/- +'- Where an assessee who was re5uired to
pa tax under su0-section +'- of section ;4/-
+a- fails to pa an instalment; or
+0- fails to pa an instalment on or 0efore the
specified date; or
+c- fails too pa the full amount paa0le 0 him#
he shall# without preCudice to an other lia0ilit which he ma incur under this "rdinance# 0e lia0le to pa
additional tax at the rate of twent-four per cent per annum on the amount not paid# and such additional
tax shall 0e calculated from the date on which such amount was paa0le to the date on which it is paid or
the thirtieth da of Septem0er of the financial ear next following# whiche7er is the earlier/
+3- Where# in respect of an ear# an assessee fails to pa tax under su0-section 8+:-9 of section ;4 or the
tax so paid is less than eight percent of the tax chargea0le for the rele7ant assessment ear# he shall 0e
lia0le to pa additional tax at the rate of twent-four per cent per annum on the amount of tax so
chargea0le or the amount 0 which the tax paid 0 him falls short of the said eight per cent# as the case
ma 0e; and such additional tax shall 0e calculated from the first da of April in that ear to the date on
which assessment is made or the thirtieth da of &une of the financial ear next following# whiche7er is the
earlier/
==/ Ch!r2e o& !""itio!l t!x &or &!il0re to +!, t!x /ith the ret0r/- Where an assessee fails to pa
tax under section ;: or the tax so paid is less than the tax paa0le under that section# he shall 0e lia0le to
90
pa additional tax at the rate of 8twent-four9 per cent per annum on the amount not paid or the amount 0
which the tax paid 0 him falls short of the tax paa0le under that section# as the case ma 0e# and such
additional tax shall 0e calculated from the first da of "cto0er or the date on which the tax was paa0le#
whiche7er is the later# to the date on which the tax is paid or the date on which an order under su0-section
+'- of section ;(# 8section ;(A9# section <3# section <4 or section <;# as the case ma 0e# is made#
whiche7er is the earlier/
=(/ Ch!r2e o& !""itio!l t!x &or &!il0re to +!, t!x or +e!lt,/-Where an assessee fails to pa the
whole or an part of the tax le7ied under ,hapter B22 or the whole or an part of an penalt le7ied under
,hapter D2# 8or has 0een allowed sta of pament or pament in instalments of the tax under su0-section
+3- of section =;#9 he shall 0e lia0le to pa additional tax at the rate of 86twent-four69 per cent per annum
on the amount of such tax or penalt or an part thereof# as the case ma 0e# which has not 0een paid; and
such additional tax shall 0e calculated from the date on which such tax or penalt or part thereof# as the
case ma 0e# was originall paa0le to the date on which it is paid or# in respelled each instalment# the
date on which it is paid 8/9
8 9
(@/ Reduction in additional tax# conse5uential to reduction in tax or penalt/- Where# in conse5uence of
an order under this "rdinance# the amount of tax or penalt in respect of which additional tax is
chargea0le under section =<# =)# == or =( is reduced# the additional tax# if an# le7ied under an of the
aforesaid sections shall 0e reduced accordingl/
('/ Penalt for non-pament of tax/- +'- Where an assessee is in default in ma!ing pament of an tax
+other than the tax paa0le under section ;4- the 8Deput ,ommissioner9 ma impose on him a penalt
not exceeding an amount e5ual to the said tax/
+3- $he 8Deput ,ommissioner9 ma impose a penalt under su0-section +'- 0 one order or# in the case
of a continuing default# 0 se7eral orders# so# howe7er# that the total amount of penalt does not exceed
the amount of such tax/
+4- %or the purpose of su0-section +'-# an penalt imposed under that su0-section or an additional tax
le7ied under section =<#=)#== or =( shall 0e excluded from the amount of tax in respect of which the
penalt is imposed/
+:- Where# after an order under su0-section +'- has 0een made# the 8Deput ,ommissioner9 disco7ers# or
the assessee pro7es to the satisfaction of the Deput ,ommissioner# that the amount of tax# or an part
thereof# in respect of which the said order was made# the 8Deput ,ommissioner9 shall cancel or modif
the said order# as ma 0e necessar# and the pro7isions of section ';< shall# so far as ma 0e# appl as the
appl to the rectification of an mista!e apparent from the record/
8+:A- Where# in conse5uence of an order under this "rdinance# the amount of tax in respect of which
penalt under this section was imposed is reduced# the amount of the said penalt shall 0e reduced
accordingl/
+;- Notwithstanding anthing contained in an law for the time 0eing in force# no order of penalt made
under su0-section +'- shall 0e called in 5uestion in an court# or tri0unal or 0efore an authorit on the
ground that-
91
+a- no show-cause notice was issued 0efore the said order was made; or
+0- an application for sta of reco7er of tax or the pament of tax in instalments had 0een pending 0efore
an court or tri0unal or an other authorit/
(3/ Reco7er of tax from persons holding mone on 0ehalf of an assessee/- +'- %or the purpose of
reco7ering an tax paa0le 0 an assessee# the 8Deput ,ommissioner9 ma# 0 notice in writing# re5uire
an person-
+a- from whom an mone is due or ma 0ecome due to the assessee; or
+0- who holds# or controls the receipt or disposal of# or ma su0se5uentl hold# or control the receipt or
disposal of# an mone 0elonging to the assessee or on account of the assessee; or
+c- who is responsi0le for pament of an sum to the assessee to which section ;@ applies# to pa to the
8Deput ,ommissioner9# in an case to which clause +a- or clause +0- applies# the sum specified in the
notice on or 0efore such date as ma 0e so specified# or to deduct# in an case to which clause +c- applies#
from an pament su0se5uent to the date of such notice an arrears of tax due from the assessee as
specified in the said notice and the pro7isions of su0-sections +=- and +(- of section ;@ and section ;3
shall# so far as ma 0e# appl as if the sum or the arrears of tax specified in the said notice# as the case ma
0e# were a sum deducti0le under section ;@/
+3- An person who has paid an sum in compliance with a notice under su0-section +'- shall 0e deemed
to ha7e paid such sum under the authorit of the assessee and the receipt of the Deput ,ommissioner
shall constitute a good and sufficient discharge of the lia0ilit of such person to the assessee to the extent
of the sum referred to in such receipt/
8+3A- 2f an person on whom a notice under su0-section ('- is ser7ed fails to pa# or to deduct# as the case
ma 0e# the amount specified in the said notice# such person shall 0e treated as an assessee in default and
the amount specified in the said notice shall 0e reco7era0le from him 0 the $ax Reco7er "fficer or the
,ollector in accordance with the pro7isions of sections (4 and (:/9
+4- %or the purpose of this section# 6person6 includes an court# tri0unal or an other authorit/
(4/ Reco7er of tax 0 $ax Reco7er "fficer/- +'- 6where an assessee is in default in ma!ing pament
of tax# the 8Deput ,ommissioner9 ma forward to the $ax Reco7er "fficer a certificate in the prescri0ed
form specifing the amount of tax due from the assessee/
+3- Where such certificate is recei7ed 0 the $ax Reco7er "fficer# he shall ser7e upon the assessee a
notice in the prescri0ed form re5uiring him to pa the amount specified in the certificate within such time
as ma 0e specified in the notice/
+4- 2f the amount referred to in the notice issued under su0-section +3- is not paid within the time specified
therein or within the further time# if an# allowed 0 the $ax Reco7er "fficer# the $ax Reco7er "fficer
ma proceed to reco7er from the assessee the said amount 0 one or more of the following modes#
namel1-
+a- attachment and sale of an mo7a0le or immo7a0le propert of the assessee;
92
+0- appointment of a recei7er for the management of the mo7a0le or immo7a0le propert of the assessee;
and
+c- arrest of the assessee and his detention in person for a period not exceeding six months/
+:- %or the purposes of reco7er of tax under su0-section +4-# the $ax Reco7er "fficer shall ha7e the
same powers which# under the ,ode of ,i7il Procedure# '(@= +B of '(@=-# a ,i7il ,ourt has for the
purposes of the reco7er of an amount due under a decree/
+;- $he ,entral Aoard of Re7enue ma ma!e rules regulating the procedure for the reco7er of tax under
this section and an other matter connected with# or incidental to# the operation of this section/
8(4A/Reco7er of tax from persons assessed in AHad &ammu and Qashmir/- Where an person who has#
at an time 0efore or after the commencement of the %inance "rdinance# '(=@# 0een assessed to tax for
an income ear under the law relating to income tax for the time 0eing in force in AHad &ammu and
Qashmir has failed or fails to pa such tax and the income tax authorities of AHad &ammu and Qashmir
cannot reco7er such tax on account of the residence of the said person in Pa!istan# or on account of there
0eing no mo7a0le or immo7a0le propert in AHad &ammu and Qashmir 0elonging to the said person# the
Deput ,ommissioner in AHad &ammu and Qashmir ma forward to the $ax Reco7er "fficer in Pa!istan
a certificate in the prescri0ed form specifing the place of residence of the said person in Pa!istan# the
description and location of the mo7a0le and immo7a0le propert in Pa!istan 0elonging to him and the
amount of the said tax due from him; and# where the said certificate is so forwarded# the $ax Reco7er
"fficer shall proceed to reco7er the said tax in the manner specified in section (4# and all the pro7isions of
the said section and section (; shall appl accordingl/9
(:/ Reco7er of tax 0 ,ollector/- $he 8Deput ,ommissioner9 ma forward to the ,ollector of the
District in which the assessee resides or carries on 0usiness# or in which an propert 0elonging to the
assessee is situate# a certificate specifing the amount of an tax paa0le 0 the assessee; and# on receipt
of such certificate# the ,ollector shall proceed to reco7er from the assessee the amount so specified as if it
were an arrear of land re7enue;
Pro7ided that# without preCudice to an other powers of the ,ollector in this 0ehalf# he shall# for the
purposes of reco7ering the amount so specified# ha7e the powers which# under the ,ode of ,i7il
Procedure# '(@= +B of '(@=-# a ,i7il ,ourt has for the purpose of the reco7er of an amount due under a
decree/
(;/ 2nitiation# 7alidit# etc/# of reco7er proceedings/- Notwithstanding anthing contained in an other
law for the time 0eing in force#-
+a- an proceedings for the reco7er of tax under this ,hapter ma 0e initiated at an time;
+0- the 8Deput ,ommissioner9 ma# at an time# amend an certificate issued under section (4 or section
(:# or recall such certificate and issue of fresh certificate# as he thin!s fit;
+c- it shall not 0e open to an assessee to 5uestion# 0efore the $ax Reco7er "fficer or the ,ollector# as the
case ma 0e# the 7alidit or correctness of an certificate issued under section (4 or section (:# or an
such certificate ass amended# or an fresh certificate issued# under clause +0-; and
93
+d- the se7eral modes of reco7er specified in this ,hapter shall 0e deemed to 0e neither mutuall
exclusi7e nor affect in an wa an other law for the time 0eing in force relating to the reco7er of de0ts
due to Eo7ernment# and the 8Deput ,ommissioner9 ma ha7e recourse to an such mode of reco7er
notwithstanding that the tax due is 0eing reco7ered from an assessee 0 an other mode/
94
,HAP$ER D
RE%MND AND $AD ,RED2$
(</ Refunds/- +'- Where an person satisfies the 8Deput ,ommissioner9 that the amount of tax paid 0
him# or on his 0ehalf# for an ear exceeds the amount with which he is properl chargea0le under this
"rdinance for that ear# he shall 0e entitled to a refund of the amount so paid in excess/
+3- Where an ad7ance or loan# to which su0-clause +e- of clause +3@- of section 3 applies# is repaid 0 an
assessee# he shall 0e entitled to a refund of the tax# if an# paid 0 him as a result of such ad7ance or loan
ha7ing 0een treated as di7idend under the aforesaid pro7ision/
()/ Persons entitled to claim refund in certain cases/- +'- Where the income of an person is included
under an pro7isions of this "rdinance in the total income of an other person# such other person onl
shall 0e entitled to a refund under section (< or section (=# as the case ma 0e# in respect of such income/
+3- Where an person is una0le to claim or recei7e an refund under section (< or section (=# as the case
ma 0e# on account of incapacit# insol7enc# li5uidation# death or an other cause# his legal
representati7e or the trustee# or guardian or recei7er# as the case ma 0e# shall 0e entitled to claim or
recei7e such refund for the 0enefit of such person or his estate/
(=/ Refund where salar# etc/ is paid in arrears/- Where# 0 reason of#-
+a- income chargea0le under the head 6Salar6 0eing paid in arrears or in ad7ance; or
+0- an interest chargea0le under the head 62nterest on securities6 0eing recei7ed in arrears#
an assesseeGs total income 8is assessa0le9 at a rate higher than that at which it would otherwise ha7e 0een
assessed# the 8Deput ,ommissioner9 ma# on an application made 0 the assessee within one ear of the
date of receipt thereof# determine the tax paa0le as if the said income or interest had 0een recei7ed 0
him during the income ear to which it relates and ma refund the amount of tax# if an# paid in excess
thereof/
((/ %orm of application# disposal of claims for refund and limitation/- +'- An application for refund under
section (<# () or (= shall 0e made in the prescri0ed form and 7erified in the prescri0ed manner/
+3- An application under su0-section +'- shall 0e made#-
+a- in an case to which su0-section +3- of section (< applies# within one ear or the end of the income
ear in which the ad7ance or loan is repaid; and
+0- in other cases# within two ears of the end of the assessment ear to which it relates1
Pro7ided that an 8Deput ,ommissioner9 ma# after o0taining the pre7ious appro7al in writing of the
2nspecting 8Additional ,ommissioner9# admit an application made after the expiration of the aforesaid
period# if he is satisfied that the assessee was pre7ented 0 sufficient cause from ma!ing the application
within that period/
95
+4- When an application for refund is made under su0-section +'-# the 8Deput ,ommissioner9 shall#
su0Cect to the pro7isions of this "rdinance# determine# 0 an order in writing# the amount of refund on
0eing satisfied that such amount is due to the assessee# and# where he is not so satisfied# he ma# 0 an
order in writing# reCect the application/
+:- $he 8Deput ,ommissioner9 ma# 0efore ma!ing an order under su0-section +4-# call for such
particulars# documents or e7idence as he ma re5uire/
+;- Where no order is made under su0-section +4- on or 0efore the thirtieth da of &une of the financial
ear next following the date on which the application for refund under su0-section +3- was made# the
amount of refund claimed in the said application shall 0e deemed to 0e due to the assessee/
+<- $he pro7isions of su0-section +;- shall not appl unless a notice stating that no order under su0-section
+4- has 0een made# is ser7ed on the ,ommissioner on or 0efore the thirt-first da of .a of the said
financial ear/
8'@@/ Re&0" o !''e''$et !" !++e!l, et#.- Whereas as a result of an order passed under section ;(#
;(A# <3 or <4 or in appeal# re7ision# 8 9 or other proceedings under the "rdinance +not 0eing an order
setting aside an assessment-# refund of an amount 0ecomes due to the assessee# the 8Deput
,ommissioner9 shall# except as otherwise pro7ided in this "rdinance# refund the amount to the assessee
irrespecti7e of whether he has or has not made an claim in that 0ehalf1
8Pro7ided that where a refund 0ecomes due to an assessee# who had paid tax under section =; read with
section '3(# as a result of the decision of the 2ncome $ax Appellate $ri0unal# a sum at the rate of fifteen
per cent per annum shall 0e paa0le to him after three months from the receipt of such decision/9
'@'/ Corre#te'' o& !''e''$et, et#., ot to .e C0e'tioe" thro02h re&0" !++li#!tio'.1 Nothing in
this ,hapter shall entitle an assessee to 5uestion the correctness of an assessment or other matter which
has 0ecome final/
'@3/ A""itio!l +!,$et &or "el!,e" re&0"'/- +'- Where a refund due# or deemed under su0-section
+;- of section (( to 0e due# to an assessee is not paid within three months of the date on which it 0ecomes
due# there shall 0e paid to the assessee# a further sum 80 wa of compensation at the rate of 8fifteen9 per
cent per annum9 of the amount of refund from the expiration of the said three months up to the date on
which the refund order is made/
+3- %or the purposes of this section# a refund shall 0e deemed to ha7e 0ecome due#-
+a- in an case where the refund is re5uired to 0e made in conse5uence of an order on an
appeal or a re7ision or 8an appeal9 to the High ,ourt or an appeal to the Supreme ,ourt# on
the date of receipt of such order 0 the Deput ,ommissioner;
+0- in an case to which su0-section +;- of section (( applies# on the thirtieth da of &une of the
financial ear next following the date on which the application for refund was made; and
+c- in other cases# on the date on which the refund order is made/
+4- 2n computing the period for which the further sum referred to in su0-section +'- is paa0le# the period
for which the refund is withheld under section '@4 shall 0e excluded/
96
+:- Nothing contained in this section shall appl in an case where an refund 0ecomes due as a result of
an order on appeal# re7ision or reference setting aside the assessment/
'@4/ Po/er to /ithhol" re&0" i #ert!i #!'e'.- Where an order gi7ing rise to a refund is the su0Cect
matter of an appeal or further proceedings under this "rdinance# the 8Deput ,ommissioner9 ma# with
the prior appro7al of the ,ommissioner# withhold the refund till such time as the ,ommissioner ma
determine/
'@:/ A"=0't$et o& re&0" !2!i't t!x.-
'
8+'-9 Where# under the pro7isions of this "rdinance# the
repealed Act#
3
8the ,entral Excises Act# '(:: +2 of '(::-#9 the Sales $ax Act# '(;'+222 of '(;'-# the Eift-
tax Act# '(<4 +D2B of '(<4-#
4
8 9 the Wealth $ax Act# '(<4 +DB of '(<4-#
:
8or the ,ustoms Act# '(<(# +2B
of '(<(-#9 an refund is due to an person# the amount to 0e refunded or an part thereof# ma 0e set off
against the tax paa0le 0 that person under this "rdinance# or the repealed Act/
;
8+3- Where an refund is due to an person under this "rdinance# the amount to 0e refunded or an part
thereof# ma 0e set off against the tax paa0le under an Act referred to in su0-section +'-/9
'@;/ T!x #re"it &or i5e't$et i 'h!re' or "e.et0re' o& EC0it, P!rti#i+!tio F0".- +'- Where an
assessee# 0eing a Pa!istan ,ompan in7ests at an time 0efore the first da of &ul# '(('# an amount in
the purchase of shares or de0entures issued 0 the E5uit Participation %und "rdinance# '()@ +2 of '()@-#
and appro7ed 0 the ,entral Aoard of Re7enue for the purposes of this section# a credit e5ual to fift
percent of the amount so in7ested shall 0e allowed against the tax paa0le 0 the assessee in the manner
hereinafter pro7ided/
+3- $he amount of the credit admissi0le under su0-section ('- shall 0e deducted from the tax paa0le 0
the assessee in respect of the income ear in which the in7estment was made/
+4- Where no tax is paa0le 0 the assessee in respect of the assessment ear rele7ant to the income ear
in which such in7estment was made# or where the amount of the tax paa0le is less than the amount of the
credit# the amount of the credit or so much of it as is in excess thereof# as the case ma 0e shall 0e carried
forward and deducted in the manner laid down in su0-section +3- from the tax paa0le 0 the assessee in
the following assessment ear and so on# so# howe7er# that the deductions made under su0-section +3- and
this su0-section shall not exceed in the aggregate the limit specified in su0-section +'-/
+:- Nothing contained in su0-section +'- shall appl in respect of an shares or de0entures ac5uired 0 an
assessee 0 purchase or transfer from a pre7ious holder thereof# or in respect of an shares or de0entures
sold# transferred or otherwise disposed of 0 an assessee within the income ear in which the were
purchased/
+;- Where an shares or de0entures in respect of which an credit has 0een allowed under su0-sections
+'-# +3-# +4- are sold# transferred or otherwise disposed of in an su0se5uent ear# the assessee shall#
notwithstanding anthing to the contrar contained in this "rdinance# 0e lia0le to pa# in addition to an
tax otherwise paa0le 0 it in respect of the income ear in which such sale# transfer or disposal too!
'
Section renum0ered as su0-sec/ +'- 0 %/ "/ 3@@@/
3
Words etc/ ins/ 0 %/ "/ 3@@@/
4
Word > or? omitted ibid.
:
Words etc/ su0s/ for the word >an? ibid/
;
Su0-sec/ +3- ins/ ibid/
97
place# additional tax e5ual to the amount of such credit# and where no such tax is otherwise paa0le 0 the
assessee in respect of the said income ear# the said additional tax shall 0e deemed to 0e the tax paa0le
0 it in respect of the said income ear/
+<- $he pro7isions of sections (<# ()# ((# '@@# '@4 and '@: shall# so far as ma 0e# appl to tax credit
under this section as the appl to refunds/
+)- $he ,entral Aoard of Re7enue ma ma!e rules regulating the procedure for the grant of appro7al
under this section and an other matter connected with# or incidental to# the operation of this section/
8'@;A/ T!x #re"it &or i5e't$et i "e.et0re' or e2oti!.le .o"'.- +'- Where an assessee in7ests 8#
at an time 0efore the first da of &ul# '(('9 an amount in the purchase of de0entures or negotia0le
0onds issued 0 the Eo7ernment or a corporation owned 0 the Eo7ernment and appro7ed 0 the ,entral
Aoard of Re7enue for the purposes of this section# a credit e5ual to fi7e per cent of nominal 7alue of such
de0enture or 0ond shall 0e allowed against the tax paa0le 0 the assessee in the manner hereinafter
pro7ided1
+3- $he amount of the credit admissi0le under su0-section +'- shall 0e deducted from the tax paa0le 0
the assessee in respect of the income ear in which the in7estment is made and in an su0se5uent ear in
which the said in7estment is retained/
+4- Where no tax is paa0le 0 the assessee in respect of the assessment ear rele7ant to the income ear
in which such in7estment was made# or where the amount of the tax paa0le is less than the amount of the
credit# the amount of the credit or so much of it as is in excess thereof# as the case ma 0e# shall 0e carried
forward and deducted in the manner laid down in su0-section +3- from the tax paa0le 0 the assessee in
the following assessment ear and so on# so# howe7er# that the deductions made under su0-section (3- and
this su0-section shall not exceed in the aggregate the limits specified in su0-section +'-/
+:- Nothing contained in su0-section +'- shall appl in respect of an de0enture or 0ond-
+a- sold# transferred or otherwise disposed of 0 an assessee 0efore the 4'st Decem0er# in an
ear; and
+0- after fifteen ears of the date of its issue/
+;- $he pro7isions of sections (<# ()# ((# '@@# '@4 and '@: shall# so far as ma 0e# appl to tax credit
under this section as the appl to refunds/
+<- $he ,entral Aoard of Re7enue ma ma!e rules regulating the procedure for the grant of appro7al
under this section and an other matter connected with# or incidental to the operation of this section/9
'@</ T!x #re"it &or i5e't$et i 'h!re1#!+it!l o& i"0'tri!l #o$+!ie'.- +'- Where an assessee# 0eing
a 8compan9 in7ests 8at an time 0efore the first da of &ul# '((' an amount in the purchase of shares
issued 0 an other Pa!istani compan which fulfils the condition specified in su0-section +)-# credit for
the amount so in7ested shall 0e allowed to the assessee against the tax paa0le 0 it in the manner and to
the extent hereinafter pro7ided/
+3- $he credit under su0-section +'- shall 0e allowed at the following rates# namel1-
98
Where the industrial underta!ing set up 0 the compan is located in-
Rate
+a- Aaluchistan# $ri0al areas# Northern Areas or AHad
Qashmir/
$hirt percent of
the amount in7ested/
+aa- the district of .ansehra# Qohistan# Dera 2smail Qhan#9
Aannu or Qara! in the North West %rontier Pro7ince#
the District of Dera EhaHi Qhan or RaCanpur in the
PunCa0 or the district of &aco0a0ad or Shi!arpur in Sind/
$went percent of
the amount in7ested/
+0- "ther places excluding the Qarachi and Hdera0ad/
$alu!as and $ehsils of %aisala0ad and *ahore and such
adCoining areas of *ahore $ehsil as ma 0e notified in
this 0ehalf 0 the %ederal Eo7ernment/
%ifteen percent of
the amount in7ested
+4- $he amount of the credit admissi0le under this section shall 0e deducted from the tax paa0le 0 the
assessee in respect of the income ear in which the in7estment was made/
+:- Where no tax is paa0le 0 an assessee in respect of the assessment ear rele7ant to the income ear in
which such in7estment was made# or where the amount of the tax paa0le is less than the amount of the
credit# the amount of the credit# or so much of it as is in excess thereof# as the case ma 0e# shall 0e carried
forward and deducted from the tax paa0le 0 the compan in the following assessment ear and so on#
so# howe7er# that the deductions made under su0-section +4- and this su0-section shall not exceed in the
aggregate the limits specified in su0-section +3-/
+;- Nothing contained in su0-section +'- shall appl in respect of an shares ac5uired 0 an assessee 0
purchase or transfer from a pre7ious holder thereof or in respect of an shares sold or transferred or
otherwise disposed of 0 an assessee within fi7e ears from the date of their purchase/
8+;A- Notwithstanding anthing contained in this section# a 0an!ing compan or a financial institution
shall not 0e entitled to tax credit under this section/9
8+<- Where an credit is allowed under this section and it is su0se5uentl disco7ered 0 the Deput
,ommissioner that-
+a- an shares# in7estment in which has resulted in the said credit# are sold# transferred or
otherwise disposed of within fi7e ears of the date of their purchase; or
+0- the appro7ed industrial underta!ing referred to in su0-section +)--
+i- was not set up within the period specified in the order of appro7al; or
+ii- was set up in an area other than that specified in the order of appro7al and in
conse5uence of that the assessee was not entitled to an credit; or
+iii- was set up in an area other than that specified in the order of appro7al and in
conse5uence of that the assessee was entitled to an amount of credit which is less
than the amount actuall allowed; or
99
+i7- has not started commercial production within the period specified in the order of
appro7al#
the assessee shall# notwithstanding anthing contained in this "rdinance# 0e lia0le to pa# in addition to
an tax otherwise paa0le 0 it in respect of the income ear in which such infringement was disco7ered#
additional tax e5ual to#-
+i- in the case referred to in su0-section +iii- of clause +0-# the difference in the amount actuall
allowed and the amount of credit allowa0le; and
+ii- in other cases# the full amount of credit actuall allowed# and
where no such tax is otherwise paa0le 0 the assessee in respect of the said income ear# the said
additional tax shall 0e deemed to 0e the tax paa0le 0 it in respect of the said income ear/
+)- $he following are the conditions referred to in su0-section +'-# namel1-
+a- that the compan is a pu0lic compan; and
+0- that the compan is formed for the purpose of# and is actuall engaged in# carring on in
Pa!istan an appro7ed industrial underta!ing owned 0 it/
Explanation/- As used in this su0-section#-
+a- 6appro7ed industrial underta!ing6 means an industrial underta!ing which is set up in
Pa!istan after the fourteenth da of August# '(:) and is appro7ed 0 the ,entral Aoard of
Re7enue for the purposes of this section; and
+0- 6industrial underta!ing6 means-
+i- an underta!ing which fulfils the conditions specified in clauses +a-# +d- and +e- of
su0-section +3- of section :=; and
+ii- an other industrial underta!ing# which is appro7ed 0 the ,entral Aoard of
Re7enue for the purposes of this section/
and includes an expansion of an industrial underta!ing to which this section applies# were such
expansion constitutes-
+a- an identifia0le industrial unit for the production of an goods or class of goods; or
+0- a similar unit for the carring on of an identifia0le industrial process/
8+)A- Notwithstanding anthing contained in this section# the ,entral Aoard of Re7enue ma# in the case
of an compan appling for appro7al of an industrial underta!ing owned 0 it# grant appro7al under this
section 0efore the said underta!ing is set up or has commenced commercial production Sor ma grant
appro7al from such date# whether preceding or following the date on which the appro7al is granted# as it
ma specif in this 0ehalfT/9
100
+=- $he pro7isions of sections (<# ()# ((# '@@# '@4 and '@: shall# so far as ma 0e# appl to tax credit
under this section as the appl to refunds/
+(- $he ,entral Aoard of Re7enue ma ma!e rules regulating the procedure for the grant of appro7al
under this section and an other matter connected with# or incidental to# the operation of this section/
'@)/ T!x #re"it &or re+l!#e$et, .!l!#i2 !" $o"eri'!tio o& $!#hier, or +l!t/- +'- Where an
assessee 0eing a Pa!istani compan in7ests an amount in the purchase of plant and machiner for
installation at an time 0etween the first da of &ul# '()< and the thirtieth da of &une# 8'(==9 8or
0etween the first da of &ul# '((@ and the thirtieth da of &une# S'(('T#9 in an industrial underta!ing set
up in Pa!istan and owned 0 it# for the purposes of replacement# 0alancing or modernisation of the
machiner and plant alread installed therein# credit at the rate of fifteen per cent of the amount so
in7ested shall 0e allowed against the tax paa0le 0 it in the manner hereinafter pro7ided/
Explanation/- As used in this su0-section#-
+a- 6amount6# in case of plant and machiner ac5uired on lease# means the amount expended
0 the lessor in the purchase of the said plant and machiner; and
+0- 6purchase of plant and machiner6 includes ac5uisition of plant and machiner on lease
from a scheduled 0an!# a financial institution or a leasing compan on such terms and
conditions as ma 0e appro7ed 0 the ,entral Aoard of Re7enue/
+3- $he amount of credit admissi0le under this section shall 0e deducted from the tax paa0le 0 the
assessee in respect of the income ear in which the machiner or plant in the purchase of which the
amount referred to in su0-section +'- is in7ested is installed/
+4- Where no tax is paa0le 0 the assessee in respect of the assessment ear rele7ant to the income ear
in which such plant or machiner is installed# or where the tax paa0le is less than the amount of the
credit# the amount of the credit or so much of it as is in excess thereof# as the case ma 0e# shall 0e carried
forward and deducted from the tax paa0le 0 the assessee in respect of the following assessment ear#
and so on# 0ut no such amount shall 0e carried forward for more than two assessment ears so# howe7er#
that the deductions made under su0-section +3- and this su0-section shall not exceed in the aggregate the
limit specified in su0-section +'-/
+:- $he pro7isions of su0-section +'- and +3- shall also appl in the li!e manner to an plant and
machiner installed# for the purposes of extension of the industrial underta!ing1-
+i- on or after the first da of &ul# '()=# and 0efore the thirtieth da of &une# '(=4 in the territories of
Pa!istan; or
+ii- on or after the first da of &ul# '(=4# in the territories of Pa!istan +excluding $alu!as of Qarachi and
Hdera0ad# and $ehsils of %aisala0ad and *ahore# and such adCoining areas of *ahore $ehsil as ma 0e
notified in this 0ehalf 0 the %ederal Eo7ernment-/
+;- Where an credit is allowed under this section and su0se5uentl it is disco7ered 0 the Deput
,ommissioner that an one or more of the conditions specified in this section was or were not fulfilled# as
the case ma 0e# the credit originall allowed shall 0e deemed to ha7e 0een wrongl allowed and the
Deput ,ommissioner ma# notwithstanding anthing contained in this "rdinance# recompute the tax
101
paa0le 0 the assessee for the rele7ant ear and the pro7isions of section <; shall# so far as ma 0e# appl
accordingl# the period of ten ears specified in su0-section +4- of that section 0eing rec!oned from the
end of the assessment ear rele7ant to the income ear in which the infringement was disco7ered/
+<- $he pro7isions of sections (<# ()# ((# '@@# '@4 and '@: shall# so far as ma 0e# appl to tax credit
under this section as the appl to refunds/
+)- As used in this section# 6industrial underta!ing6 means an underta!ing which fulfils the conditions laid
down in clauses +a-# +d- and +e- of su0-section+3- of section := 8or which is engaged in the 0usiness of
exploration or extraction of coal deposits9 and includes an such underta!ing which is appro7ed 0 the
,entral Aoard of Re7enue for the purposes of this section/
+=- $he ,entral Aoard of Re7enue ma ma!e rules regulating the procedure for the grant of appro7al
under this section and an other matter connected with# or incidental to# the operation of this section/
8'@)A/ T!x Cre"it/- +'- Notwithstanding anthing contained in this "rdinance# the ,entral Aoard of
Re7enue ma ma!e scheme or schemes for the pro7isions of tax credit# and such credit shall 0e a7aila0le
to such persons or classes of persons# in such manner# at such rates and in such areas as ma 0e specified
in such scheme or schemes/
+3- $he ,entral Aoard of Re7enue ma# 0 notification in the official EaHette# ma!e pro7isions relating to
the adCustment of tax credit# or an other matter connected with or incidental to# the tax credit/6;9
'
8'@)AA/ T!x #re"it &or i5e't$et/- +'- Where an assessee 0eing a Pa!istani compan in7ests an
amount in the purchase of plant and machiner for installation# at an time 0etween the first da of &ul#
3@@@ and the 4@th da of &une# 3@@3# in an industrial underta!ing set up in Pa!istan and owned 0 it#
credit e5ual to ten per cent of the amount so in7ested shall 0e allowed against the tax paa0le 0 it in the
manner hereinafter pro7ided/
+3- $he amount of credit admissi0le under this section shall 0e deducted from the tax paa0le 0 the
assessee in respect of the income ear in which the machiner or plant in the purchase of which the
amount referred to in su0-section +'- is in7ested# is installed/
+4- Where no tax is paa0le 0 the assessee in respect of the assessment ear rele7ant to the income ear
in which such plant or machiner is installed# or where the tax paa0le is less than the amount of the
credit# the amount of the credit# or so much of it# as is in excess thereof# as the case ma 0e# shall 0e
carried forward and deducted from the tax paa0le 0 the 3; assessee in respect of the immediatel
following assessment ear onl/
+:- Where an credit is allowed under this section and su0se5uentl it is disco7ered 0 the Deput
,ommissioner of 2ncome $ax that an one or more of the conditions specified in
this section was# or were# not fulfilled# as the case ma 0e# the credit originall allowed shall 0e deemed to
ha7e 0een wrongl allowed and the Deput ,ommissioner ma# notwithstanding anthing contained in
this "rdinance# recompute the tax paa0le 0 the assessee for the rele7ant ear and the pro7isions of
section <; shall# so far as ma 0e# appl accordingl/
'
Sec/ '@)AA ins/ 0 %/ "/ 3@@@/
102
+;- $he pro7isions of su0-section +'- and +3- shall also appl in the li!e manner to an plant and
machiner installed# for the purposes of 0alancing# moderniHation and replacement/
+<- Nothing contained in rule ;A of the $hird Schedule to the "rdinance# shall appl to an industrial
underta!ing which claims tax credit under su0-section +'-/9

CHAPTER XI
PENALTIES
'@=/ Pe!lt, &or &!il0re to &0ri'h ret0r o& tot!l i#o$e !" #ert!i 't!te$et'/- Where an person
has# without reasona0le cause# failed to furnish# within the time allowed for the purposes#-
+a- an return of total income under section ;; or ;<# su0-section +'- of section <;# su0-section
+4- of section )3 or su0-section +4- of section ='; or
+0- an certificate# statement# accounts or information under section ;'# '4(# ':@# ':'# ':3# ':4#
8':4A9# 8':4A9 or '::#
the 8Deput ,ommissioner9 8shall9 impose upon such person a 8penalt-

8+i- 8in case of default specified in clause +a- # an9 amount e5ual to one tenth of one per cent of
the tax paa0le for each da of default su0Cect to a minimum of fi7e hundred rupees and a
maximum of twent-fi7e per cent of the tax paa0le/9
+A- for the period of default which
does not exceed six wee!s
Rs/4@@ for companies and Rs/'@@ in
other cases# for each da of default
+A- for the period of default
exceeding six wee!s
the amount calculated as pro7ided at
+A- a0o7e plus Rs/;@@ for companies
and Rs/ 3@@ in other cases for each da
of default
Pro7ided that the amount of penalt shall in no case exceed fift percent of the amount of tax assessed;
and9
8 9
+ii- in case of default specified in clause +0-# an amount e5ual to two thousand rupees and a
further sum e5ual to two hundred rupees for e7er da during which the default continues/9
'@(/ Pe!lt, &or &!il0re to $!it!i +re'#ri.e" !##o0t'/- Where an person has# without reasona0le
cause# failed to compl with the pro7isions of an order or rule made under or in pursuance of su0-section
+3- of section 43# the 8Deput ,ommissioner ma impose on him a penalt 8e5ual to fifteen per cent of the
tax paa0le# su0Cect to a minimum of two thousand rupees/9
''@/ Pe!lt, &or o1#o$+li!#e /ith oti#e, et#.- Where an person has# without reasona0le cause#
failed to compl with an notice issued under section ;= 8 9 or <'# the 8Deput ,ommissioner9 ma
103
impose on him a penalt 8e5ual to fift per cent of9 the amount of tax which would ha7e 0een a7oided if
the income as returned 0 such person had 0een accepted as the correct income/9
'''/ Pe!lt, &or #o#e!l$et o& i#o$e/-+'- Where in the course of an proceedings under this
"rdinance# the 8Deput ,ommissioner9# the Appellate 8Additional ,ommissioner9 or the Appellate
$ri0unal is satisfied that an person has# either in the said proceedings or in an earlier proceedings
relating to an assessment in respect of the same income ear# concealed his income or furnished inaccurate
particulars of such income# he or it ma impose on such person a penalt 8e5ual to the9 the amount of tax
which 8the said person sought to e7ade 0 concealment of his income or furnishing of inaccurate
particulars of such income# as aforesaid/9
+3- %or the purposes of su0-section +'- and section ''(# concealment of income or the furnishing of
inaccurate particulars of income shall include-
+a- the suppression of an item of receipt lia0le to tax in whole or in part# 8or failure to disclose
income chargea0le to tax9 8 9
+0- claiming an deduction for# or showing# an expenditure not actuall incurred; 8and9
8+c- an act referred to in clauses +aa-# +0-# +c-# +d- and +e- of su0-section +'- of section '4/9
8+3A- Notwithstanding anthing contained in su0-section +'- or su0-section +3-# where an item of receipt
declared 0 the assessee is claimed 0 him as exempt from tax# or where an deduction in respect of an
expenditure is claimed 0 him# mere disallowance of such claim shall not constitute concealment of
income or the furnishing of inaccurate particulars of income# unless it is pro7ed that he assessee
deli0eratel claimed exemption from tax in respect of the aforesaid item of receipt or claimed deduction in
respect of such expenditure not actuall incurred 0 him/9
+4- An Appellate 8Additional ,ommissioner9 or the Appellate $ri0unal# on ma!ing an order under su0-
section +'-# shall forthwith send a cop thereof to the 8Deput ,ommissioner9 and thereupon all the
pro7isions of this "rdinance relating to the reco7er of penalt shall appl as if such order were made 0
the 8Deput ,ommissioner/9
''3/ Pe!lt, &or &!il0re to 2i5e oti#e o& "i'#oti0!#e o& .0'ie'' or +ro&e''io/- Where an person
fails to compl with the pro7isions of su0-section +'- or su0-section +3- of section )3# the 8Deput
,ommissioner9 ma impose on him a penalt not exceeding the amount of the tax paa0le for the income
ear in which the 0usiness was discontinued/
''4/ Pe!lt, i the #!'e o& re2i'tere" &ir$'/- Where a person lia0le to penalt under section '@(# ''@#
''' or ''3 is a registered firm# the amount of penalt shall# notwithstanding anthing contained in this
"rdinance# 0e calculated as if such registered firm were an unregistered firm/
'':/ Pe!lt, &or &!il0re to 2i5e oti#e ., liC0i"!tor/- Where a li5uidator or a pri7ate compan fails to
gi7e notice of his appointment as re5uired 0 su0-section +'- of section )<# the 8Deput ,ommissioner9
ma impose on him penalt not exceeding ten thousand rupees/
'';/ Pe!lt, &or o.'tr0#tio/- Where an person o0structs an income tax authorit in the discharge of
his functions under this "rdinance# the 8,ommissioner9 ma impose on such person a penalt not
exceeding ten thousand rupees/
104
''</ I$+o'itio o& +e!lt, !&ter oti#e o& he!ri2, et#.- No penalt under this ,hapter shall 0e
imposed on an person-
+a- 0 an 8Deput ,ommissioner9 except with the prior appro7al in writing of the 2nspecting
8Additional ,ommissioner9; and
+0- unless such person has 0een gi7en a reasona0le opportunit of 0eing heard#
and the imposition of such penalt shall 0e without preCudice to an other lia0ilit incurred 0 such person
under this "rdinance# the repealed Act or an other law for the time 0eing in force1
8Pro7ided that where a notice for hearing is gi7en on or after the first da of &ul# '((@# no order of
penalt shall 0e passed after the expiration of two ears from the end of the financial ear in which such
notice was ser7ed/
CHAPTER XII
OFFENCES AND PROSECATIONS
'')/ Pro'e#0tio &or o1#o$+li!#e o& #ert!i 't!t0tor, o.li2!tio'/- Where an person# without
reasona0le cause#-
+a- fails too compl with the pro7isions of section ;@ or section ;4; or
+0- fails to furnish the return of total income re5uired to 0e furnished under section ;<# su0-
section (4- of section )3 or su0-section +4- of section ='; or
+c- fails to compl with the re5uirements of an notice ser7ed upon him under section ;=# <'#
<; or '::; or
+d- fails to compl with the notice under section (3 or section ':=; or
+e- o0structs an income tax authorit in the discharge of his functions under this "rdinance#
he shall 0e punisha0le with imprisonment for a term which ma extend to one ear# or with fine# or with
0oth/
''=/ Pro'e#0tio &or &!l'e 't!te$et i 5eri&i#!tio/- Where an person ma!es a statement in an
7erification in an return or an other document furnished under an pro7isions of this "rdinance which is
false and which he either !nows or 0elie7es to 0e false or does not 0elie7e to 0e true# he shall 0e
punisha0le with imprisonment for a term which ma extend to three ears# or with fine# or with 0oth/
''(/ Pro'e#0tio &or #o#e!l$et o& i#o$e, et#/- Where an person conceals his income or
deli0eratel furnishes inaccurate particulars thereof# he shall 0e punisha0le with imprisonment for a term
which ma extend to fi7e ears# or with fine# or with 0oth/

'3@/ Pro'e#0tio &or !.et$et/- Where an person !nowingl and willfull aids# a0ets# assists# incites
or induces another person to ma!e or deli7er a false return# account# statement# certificate or declaration
105
under this "rdinance# or himself !nowingl and willfull ma!es or deli7ers such false return# account#
statement# certificate or declaration on 0ehalf of another person# he shall 0e punisha0le with imprisonment
for a term which ma extend to three ears# or with fine# or with 0oth/
'3'/ Pro'e#0tio &or "i'+o'!l o& +ro+ert, to +re5et !tt!#h$et, et#/- Where the owner of an
propert# or a person acting on his 0ehalf or claiming under him# sells# mortgages# charges or leases or
otherwise deals with the propert after the receipt of a notice from the $ax Reco7er "fficer with a 7iew
to pre7enting that "fficer from attaching it# he shall 0e punisha0le with imprisonment for a term which
ma extend to three ears# or with fine# or with 0oth/
'33/ Pro'e#0tio &or 0!0thori'e" "i'#lo'0re o& i&or$!tio ., ! +0.li# 'er5!t/- Where an
person discloses an particulars in contra7ention of the pro7isions of su0-section +'- of section ';@# he
shall 0e punisha0le with 2mprisonment for a term which ma extend to six months# or with fine# or with
0oth/
'34/ Li!.ilit, &or +ro'e#0tio i the #!'e o& #o$+!,, et#/- Where an offence referred to in this
,hapter has 0een committed 0 a compan# or an association of persons or a firm or a Hindu undi7ided
famil# e7er person# who# at the time the offence was committed# was the principal officer thereof# or was
acting# or purporting to act# in such capacit# or a mem0er of the association of persons# or a partner in the
firm# or the manager or a male adult mem0er of the famil# he shall# notwithstanding anthing contained
in an other law for the time 0eing in force# 0e deemed to 0e guilt of such offence and all the pro7isions
of this "rdinance shall appl accordingl/
'3:/ I'tit0tio o& +ro'e#0tio +ro#ee"i2' /itho0t +re=0"i#e to other !#tio/- Notwithstanding
anthing contained in an law for the time 0eing in force# a prosecution for an offence against this
"rdinance ma 0e instituted without preCudice to an other lia0ilit incurred 0 an person under this
"rdinance or the repealed Act/
'3;/ S!#tio o& +ro'e#0tio, et#/- No prosecution in respect of an offence referred to in this ,hapter
shall 0e instituted except with the pre7ious sanction of the 8,ommissioner9/
'3</ Po/er to #o$+o0" o&&e#e/- Where an person has committed an offence referred to in this
,hapter# the ,ommissioner ma# either 0efore or after the institution of proceedings# compound such
offence and order that such person shall pa the amount for which the offence ma 0e compounded/
'3)/ Tri!l ., S+e#i!l <0"2e/- +'- Notwithstanding anthing contained in the ,ode of ,riminal
Procedure# '=(= +B of '=(=- or in an other law for the time 0eing in force# an offence punisha0le under
this ,hapter +other than an offence under section '33- shall 0e tried exclusi7el 0 a Special &udge
appointed 0 the %ederal Eo7ernment under the Pa!istan ,riminal *aw Amendment Act# '(;= +D* of
'(;=- as if such offence were an offence specified in the Schedule to that Act/
+3- A special &udge shall ta!e cogniHance of# and ha7e Curisdiction too tr# an offence tria0le under su0-
section +'- onl upon a complaint in writing made 0 an income tax authorit authorised 0 the ,entral
Aoard of Re7enue in this 0ehalf/
'3=/ Po/er to te"er i$$0it, &ro$ +ro'e#0tio.- +'- $he %ederal Eo7ernment ma# for the purpose
of o0taining the e7idence of an person appearing to ha7e 0een directl or indirectl concerned in# or
pri7 to# the concealment of income or to the e7asion of tax# tender to such person immunit from
prosecution for an offence under this "rdinance or under the Pa!istan Penal ,ode +D*B of '=<@-# or
106
under an other %ederal law on condition of his ma!ing a full and true disclosure of the whole
circumstances relating to the concealment of income or e7asion of tax/
+3- A tender of immunit made to# and accepted 0# the person concerned shall# to the extent to which the
immunit extends# render him immune from prosecution for an offence in respect of which the tender
was made/
+4- 2f it appears to the %ederal Eo7ernment that an person to whom immunit has 0een tendered under
this section has not complied with the condition on which the tender was made or is concealing anthing
or gi7ing false e7idence# the %ederal Eo7ernment ma withdraw the immunit# and an such person ma
0e tried for the offence in respect of which the tender of immunit was made or for an other offence of
which he appears to ha7e 0een guilt in connection with the same matter/
107
CHAPTER XIII
APPEALS AND REBISION
'3(/ A++e!l to the A++ell!te 7A""itio!l Co$$i''ioer8/- +'- An assessee o0Cecting to an order made
0 an 8Deput ,ommissioner9 under section 8;( or ;(A 8 where an adCustment has 0een made under su0-
section +4- or su0-section +3-# respecti7el# of those sections9#9 <3#<4# <;# <=# );# 8=@# =@A#9 ('# (=# ((#
'@; to ''3 +inclusi7e-# '': 8 9 or su0-section +3- of section ':=# 8or an order under section ;3# treating a
person to 0e an assessee in default#9 or an order under section )=# treating the assessee as an agent of a non
resident# or an order under section ';< 8refusing to rectif the mista!e# either in full or in part# as claimed
0 the assessee or ha7ing the effect of enhancing the assessment or reducing a refund or otherwise
increasing the lia0ilit of the assessee ma appeal to the Appellate 8Additional ,ommissioner9 against
such order/
+3- No appeal under su0-section +'- shall lie against an order of assessment unless the tax paa0le under
section ;:
'
8and not less than fifteen percent of the amount of tax assessed9 has 0een paid8/9
8 9
'4@/ For$ o& !++e!l !" li$it!tio/- +'- E7er appeal under section '3( shall 0e in the prescri0ed
form and shall 0e 7erified in the prescri0ed manner# and shall 0e accompanied 0 a fee of 86one
thousand69 rupees or ten per cent of tax le7ied# whiche7er is less# pro7ided that where no tax is le7ied# 86a
fee of one thousand rupees in case of companies and two hundred rupees in case of other assessees69 shall
0e paid9/
+3- $he appeal shall 0e presented within thirt das of the following date# namel1-
+a- where the appeal relates to an assessment or penalt# the date of ser7ice of the notice of
demand relating to the said assessment or penalt# as the case ma 0e; and
+0- in an other case# the date on which intimation of the order to 0e appealed against is ser7ed/
+4- $he Appellate 8Additional ,ommissioner9 ma admit an appeal after the expiration of the period
specified in su0-section +3- if he is satisfied that the appellant was pre7ented 0 sufficient cause from
presenting the appeal within that period/
'4'/ Pro#e"0re i !++e!l/- +'- $he Appellate 8Additional ,ommissioner9 shall gi7e notice of the da
fixed for the hearing of the appeal to the appellant and to the 8Deput ,ommissioner9 against whose order
the appeal is preferred and ma adCourn the hearing of the appeal from time to time/
+3- $he Appellate 8Additional ,ommissioner9 ma# 0efore the hearing of an appeal# allow an appellant to
file an new ground of apple not specified in the grounds of appeal alread filed 0 him on 0eing satisfied
that the omission of that ground from the form of appeal was not willful or unreasona0le/
+4- $he Appellate 8Additional ,ommissioner9 ma# 0efore disposing of an appeal# call for such
particulars as he ma re5uire respecting the matters arising in the appeal or cause further in5uir to 0e
made 0 the Deput ,ommissioner/
'
Words etc ins/ 0 %/ "/ 3@@@/ Earlier these words were ins/ 0 %/ A/ '((: and omitted 0 %/ A/'((</
108
+:- $he Appellate 8Additional ,ommissioner9 shall not admit an documentar material or e7idence
which was not produced 0efore the 8Deput ,ommissioner9# unless he is satisfied that the appellant was
pre7ented 0 sufficient cause from producing such material or e7idence 0efore the 8Deput
,ommissioner9/
'43/ De#i'io i !++e!l/- +'- 2n disposing of an appeal# the Appellate 8Additional ,ommissioner9 ma#-
+a- in the case of an order of assessment#-
+i- set aside the assessment and direct the assessment to 0e made afresh after ma!ing
such further in5uir as the Appellate 8Additional ,ommissioner9 ma direct or the
8Deput ,ommissioner9 thin!s fit;
+ii- confirm# reduce# enhance or annual the assessment;
+0- in the case of an order imposing a penalt# confirm# set aside or cancel such order or
enhance or reduce the penalt; and
+c- in an other case# pass such order as he thin!s fit/
+3- $he Appellate 8Additional ,ommissioner9 shall not enhance an assessment or a penalt or reduce the
amount of refund unless the appellant has 0een gi7en a reasona0le opportunit of showing cause against
such enhancement or reduction# as the case ma 0e/
+4- Where# as the result of an appeal# an change is made in the assessment of a firm or an association of
persons or a new assessment of a firm or an association of persons is ordered to 0e made# the Appellate
8Additional ,ommissioner9 ma authorised the 8Deput ,ommissioner9 to amend accordingl an
assessment made on an partner of the firm or an mem0er of the association/
+:- "n the disposal of an appeal# the Appellate 8Additional ,ommissioner9 shall communicate the order
passed 0 him to the appellant and to the 8Deput ,ommissioner9 and the ,ommissioner/
8+;- Where no order under su0-section +'- is made 0efore the expiration of three months from the end of
the month in which the appeal is presented# the relief sought through the said appeal shall 0e deemed to
ha7e 0een gi7en and all the pro7isions of this "rdinance shall ha7e effect accordingl/
Pro7ided that# where the hearing of appeal is adCourned for an period on the re5uest of the appellant# the
said period shall 0e excluded while computing the aforesaid period of three months1
Pro7ided further that nothing contained in this su0-section shall appl to an appeal presented 0efore the
first da of &anuar# '((3/
+<- $he pro7isions of su0-section +;- shall not appl unless a notice 0 the appellant stating that no order
under su0-section +'- has 0een made is personall ser7ed 0 the appellant on the Appellate 8Additional
,ommissioner9 not less than thirt das 0efore the expiration of the period of three months/9
109
'
8+)- Where an appeal has 0een preferred under section '3(# the Appellate Additional ,ommissioner ma#
0 an order in writing# sta the reco7er upto eight-fi7e per cent of the amount of tax# upto a period of
three months or till the decision of appeal# whiche7er ma 0e earlier/9
'44/ A++oit$et o& the A++ell!te Tri.0!l/- +'- $he %ederal Eo7ernment shall appoint an
Appellate $ri0unal to exercise the functions conferred on the Appellate $ri0unal 0 this "rdinance/
+3- $he Appellate $ri0unal shall consist of as man Cudicial mem0ers and accountant mem0ers# as ma 0e
necessar1
Pro7ided that the $ri0unal shall not 0e deemed to 0e in7alidl constituted merel 0 reason of the
a0sence of a Cudicial or an accountant mem0er/
3
8+4- A Cudicial mem0er shall 0e--
+i- a person who has exercised the powers of a District &udge and is 5ualified to 0e a &udge of a
High ,ourt; or
+ii- a person who is# or has 0een# an ad7ocate of a High ,ourt and is 5ualified to 0e a &udge of a
High ,ourt/9
4
8+4A- An accountant mem0er shall 0e an officer of the 2ncome $ax Eroup e5ui7alent in ran! to that of a
Regional ,ommissioner of 2ncome $ax/9
+:- $he %ederal Eo7ernment shall 8ordinaril9 appoint a Cudicial mem0er of the $ri0unal to 0e ,hairman
thereof/
+;- $he powers and functions of the Appellate $ri0unal ma 0e exercised and discharged 0 Aenches
constituted from mem0ers of the $ri0unal 0 the 8,hairman9 of the $ri0unal/
+<- A Aench shall consist of not less than two mem0ers of the $ri0unal# and shall 0e constituted so as to
contain an e5ual num0er of Cudicial mem0ers and accountant mem0ers#or so that the num0er of mem0ers
of one class does not exceed the num0er of mem0ers of the other class 0 more than one1
Pro7ided that the %ederal Eo7ernment ma direct that all or an of the powers of the Appellate $ri0unal
shall 0e exercised +a- 0 an one mem0er# or +0- 0 more mem0ers than one# se7erall and singl/
+)- 2f the mem0ers of a 0ench differ in opinion on an point# the point shall 0e decided according to the
opinion of the maCorit# if there is a maCorit; 0ut if the mem0ers are e5uall di7ided# the shall state the
point or points on which the differ# and the case shall 0e referred 0 the 8,hairman9 of the $ri0unal for
hearing on such point or points 0 one or more of the other mem0ers of the $ri0unal# and such point or
points shall 0e decided according to the opinion of the maCorit of the mem0ers of the $ri0unal who ha7e
heard the case# including those who first heard it1
Pro7ided that if there are onl two mem0ers of the $ri0unal the %ederal Eo7ernment ma appoint an
additional mem0er for the purpose of deciding the case on which there is a difference of opinion/
'
Su0-sec/ +)- ins/ 0 %/ "/ 3@@@/
3
Su0-sec/ +4- su0s/ 0 %/"/ 3@@'/ Earlier su0s/ 0 %/ A/ '(()/
4
Su0-sec/+4A- ins/ 0 %/ A/ 3@@'/
110
+=- Su0Cect to the pro7isions of this "rdinance# the Appellate $ri0unal shall ha7e power to regulate its
own procedure# and the procedure of Aenches of the $ri0unal in all matters arising out of the discharge of
its functions# including the places at which the Aenches shall hold their sittings/
'4:/ A++e!l to the A++ell!te Tri.0!l/-+'- An assessee o0Cecting to an order passed 0 an Appellate
8Additional ,ommissioner9 under section ''' or '43# or su0-section +3- of section ':=# or an order made
0 the Appellate 8Additional ,ommissioner9 under section ';<# 8 9 ha7ing the effect of enhancing the
assessment or reducing a refund or otherwise increasing the lia0ilit of the assessee 8or an order made 0
2nspecting SAdditional ,ommissionerT under section <<A9 ma appeal to the Appellate $ri0unal against
such order/
+3- $he ,ommissioner ma# if he o0Cects to an order passed 0 an Appellate 8Additional ,ommissioner9
under section '43 direct the 8Deput ,ommissioner9 to appeal to the Appellate $ri0unal against such
order/

+4- E7er appeal under su0-section +'- or su0-section +3- shall 0e filed within sixt das of the date on
which the impugned order is communicated to the assessee or the ,ommissioner# as the case ma 0e8/9
8 9
+:- $he Appellate $ri0unal ma admit an appeal after the expiration of the period specified in su0-section
+4- if it is satisfied that the appellant was pre7ented 0 sufficient cause from presenting it within that
period/
+;- An appeal to the Appellate $ri0unal shall 0e in the prescri0ed form and shall 0e 7erified in the
prescri0ed manner# and shall# except in the case of an appeal under su0-section +3-# 0e accompanied 0 a
fee of
'
8
3
Stwo thousand fi7e hundredT rupees or ten per cent of tax le7ied# whiche7er is less# pro7ided that
where no tax is le7ied#
4
8a fee of two thousand rupees in case of companies and fi7e hundred rupees in
case of other assessees9 shall 0e paid/
+<- Notwithstanding that an appeal has 0een filed under this section# tax shall# unless reco7er thereof has
0een staed 0 the Appellate $ri0unal# 0e paa0le in accordance with the assessment made in the case1
8Pro7ided that where reco7er of tax has 0een staed 0 the Appellate $ri0unal 0 an order# such
order shall cease to ha7e effect on the expiration of a period of three months following the da on which it
is made# unless the appeal is decided# or such order is withdrawn# 0 the Appellate $ri0unal earlier;
Pro7ided further that the Appellate $ri0unal shall not made an order which has the effect of
staing the reco7er of tax 0eond the period of SsixT months in the aggregate/9
'4;/ Di'+o'!l o& !++e!l' ., the A++ell!te Tri.0!l/- +'- $he Appellate $ri0unal ma# 0efore
disposing of an appeal# call for such particulars as it ma re5uire respecting the matters arising in the
appeal or cause further en5uir to 0e made 0 the 8Deput ,ommissioner9/
'
Su0s/ for >one hundred rupees? 0 %/A/ '((:/
3
Su0s/ for >fi7e thousand? 0 %/A/ '((</
4
Su0s/ for >a fee of fi7e thousand rupees? i0id/
111
+3- $he Appellate $ri0unal shall gi7e 0oth parties to the appeal an opportunit of 0eing heard either in
person or through an authorised representati7e/
+4- 2f the Appellate $ri0unal is not satisfied that the assessment or the order which is the su0Cect of the
appeal ought to 0e interfered with# it shall reCect the appeal/
+:- 2f the Appellate $ri0unal is satisfied that an assessment which is the su0Cect of appeal-
+a- ought to 0e reduced or annulled# it shall reduce or annual the assessment accordingl; or
+0- is insufficient# it shall enhance the assessment accordingl; or
+c- ought to 0e set aside# it shall set aside the assessment and direct the 8Deput
,ommissioner9 to made a fresh assessment/
+;- 2f the Appellate $ri0unal is satisfied that an order which is the su0Cect of appeal# ought to 0e interfered
with# it shall cancel or 7ar the order accordingl and shall issue such conse5uential directions as the case
ma re5uire/
Explanation/- 2n the case of an order imposing a penalt# the power to 7ar the order shall include the
power to enhance the penalt/
+<- $he Appellate $ri0unal shall not enhance an assessment or a penalt or reduce the amount of refund#
unless the assessee has 0een gi7en reasona0le opportunit of showing cause against such enhancement or
reduction# as the case ma 0e/
+)- Where# as the result of an appeal# an change is made in the assessment of a firm or an association of
persons or a fresh assessment of a firm or an association of persons is ordered to 0e made# the Appellate
$ri0unal ma authorise the 8Deput ,ommissioner to amend accordingl an assessment made on an
partner of the firm or an mem0er of the association# as the case ma 0e/
8+)A- Where no order under this section is made 0efore the expiration of six months from the end of the
month in which the appeal under su0-section +'- of Section '4: is presented# the relief sought through the
said appeal shall 0e deemed to ha7e 0een gi7en and all the pro7isions of this "rdinance shall ha7e effect
accordingl;
Pro7ided that# where the hearing of appeal is adCourned for an period on the re5uest of the appellant# the
said period shall 0e excluded while computing the aforesaid period of six months1
Pro7ided further that the pro7isions of this su0-section shall come into force on such date 8 9 as ma 0e
notified 0 the 2ncome $ax Appellate $ri0unal in the official EaHette/9
+=- $he Appellate $ri0unal shall communicate its order to the assessee and to the ,ommissioner/
+(- Sa7e as pro7ided in section '4<# an order passed 0 the Appellate $ri0unal on appeal shall 0e final/
112
'
81;:. Re&ere#e to Hi2h Co0rt.1 +'- Within ninet das of the date upon which he is ser7ed with notice
of an order under section '4;# the assessee or the ,ommissioner ma# 0 application in such form and
accompanied 0 such documents as ma 0e prescri0ed# re5uire the Appellate $ri0unal to refer to the High
,ourt an 5uestion of law arising out of such order# and the Appellate $ri0unal shall# within ninet das
of the receipt of such application# draw up a statement of the case and refer it to the High ,ourt/
Ex+l!!tio.1 %or the remo7al of dou0ts it is here0 declared that a reference application under this
section ma 0e made in respect of a 5uestion of law arising out of an order of the Appellate $ri0unal made
on or after the first da of &ul# 3@@@/
+3- 2f# on an application made under su0-section +'-# the Appellate $ri0unal refuses to state the case on the
ground that no 5uestion of law arises# the assessee or the ,ommissioner# as the case ma 0e# ma within
one hundred and twent das from the date on which he is ser7ed with notice of the refusal# appl to the
High ,ourt and the High ,ourt ma# if it is not satisfied with the correctness of the decision of the
Appellate $ri0unal# frame a 5uestion of law and the pro7isions of su0-sections +;-# +<-# +)- and +=- shall#
so far as ma 0e# appl as the appl to a reference made under su0-section +'-/
+4- 2f on an application made under su0-section +'-# the Appellate $ri0unal reCects it on the ground that it
is time-0arred# the assessee or the ,ommissioner# as the case ma 0e# ma# within three months from the
date on which he is ser7ed with notice of the reCection# appl to the High ,ourt# and the High ,ourt# if it is
not satisfied of the correctness of the Appellate $ri0unalNs decision# ma re5uire the Appellate $ri0unal to
treat the application as made within the time allowed under su0-section +'-/
+:- 2f the High ,ourt is not satisfied that the statement in a case referred under su0-section +'- is sufficient
to ena0le it to determine the 5uestion raised there0# the ,ourt ma refer the case 0ac! to the Appellate
$ri0unal to ma!e such modification therein as the ,ourt ma direct/
+;- When an case has 0een referred to the High ,ourt under this section# it shall 0e heard 0 a Aench of
not less than two &udges of the High ,ourt# and in respect of such case the pro7isions of section (= of the
,ode of ,i7il Procedure# '(@= +B of '(@=-# shall# so far as
ma 0e# appl notwithstanding anthing contained in the *etters Patent applica0le to an High ,ourt or in
an other law for the time 0eing in force/
+<- $he High ,ourt upon the hearing of an such case# shall decide the 5uestions of law raised there0 and
shall deli7er its Cudgement thereon containing the grounds on which such decision is founded and shall
send a cop of such Cudgement under the seal of the ,ourt and the signature of the Registrar to the
Appellate $ri0unal which shall pass such orders as are necessar to dispose of the case conforma0l to
such Cudgement/
+)- Where a reference is made to the High ,ourt under this section# the costs shall 0e in the discretion of
the ,ourt/
+=- Notwithstanding that a reference has 0een made under this section to the High ,ourt# tax shall# unless
the reco7er thereof has 0een staed 0 the High ,ourt# 0e paa0le in accordance with the assessment
made in the case/
'
Se/ '4< su0s/ 0 %/ "/ 3@@@/ Earlier su0s/ 0 %/ A/ '(()/
113
+(- Section ; of the *imitation Act# '(@= +2D of '(@=-# shall appl to an application under su0-section +'-
or su0-section +3-/
+'@- When an application is made under su0-section +'- 0 the assessee# it shall 0e accompanied 0 a fee
of one hundred rupees/9
'4)/ A++e!l to the S0+re$e Co0rt/- +'- An appeal shall lie to the Supreme ,ourt from an Cudgement
of the High ,ourt deli7ered on
'
8a reference filed9 under section '4< in an case which the High ,ourt
certifies to 0e a fit one for appeal to the Supreme ,ourt/
+3- $he pro7isions of the ,ode of ,i7il Procedure# '(@= +B of '(@=-# relating to appeals to the Supreme
,ourt shall# so far as ma 0e# appl in the case of appeals under this section in li!e manner as the appl
in the case of appeals from decrees of a High ,ourt/
+4- Where the Cudgement of the High ,ourt is 7aried or re7ersed in appeal under this section# effect shall
0e gi7en to the order of the Supreme ,ourt in the manner pro7ided in su0-section +;- of section '4< in the
case of a Cudgement of the High ,ourt/
+:- $he pro7isions of su0-sections +<- and +)- of section '4< shall appl in the case of an appeal to the
Supreme ,ourt made under this section as the appl to a reference made under the said section '4</
'4=/ Re5i'io ., Co$$i''ioer/- +'- $he ,ommissioner ma# either of his own motion or on an
application made 0 the assessee for re7ision# call for the record of an proceeding under this "rdinance
in which an order has 0een passed 0 an authorit su0ordinate to him and ma ma!e such in5uir or
cause such in5uir to 0e made and# su0Cect to the pro7isions of this "rdinance# ma pass such order
thereon# not 0eing an order preCudicial to the assessee# as he thin!s fit819
3
8Pro7ided that no application for re7ision under su0-section +'- against an order made under section
'43 shall lie after the thirtieth da of &une# 3@@'/9
+3- $he ,ommissioner shall not re7ise an order under su0-section +'- if#-
+a- where an appeal against the order lies to the Appellate 8Additional ,ommissioner9 or to the
Appellate $ri0unal# the time within which such appeal ma 0e made has not expired# or the
assessee has not wai7ed his right of appeal; or
+0- the order is pending on appeal 0efore the Appellate 8Additional ,ommissioner9 or has 0een
made the su0Cect of an appeal to the Appellate $ri0unal; or
+c- in the case of an application made 0 the assessee# the application has not 0een made
within ninet das of the date on which such order was communicated too him# unless the
,ommissioner is satisfied that the assessee was pre7ented 0 sufficient cause from ma!ing
the application within the said period/
'
Su0s/ for >an appeal filed? 0 %/ "/ 3@@@/
3
Pro7iso ins/ 0 %/ "/ 3@@'/
114
+4- No application for re7ision shall lie under su0-section +'- unless the tax paa0le under section ;: has
0een paid/
+:- E7er application 0 an assessee under su0-section +'- shall 0e accompanied 0 a fee of 8one
thousand9 rupees or ten per cent of tax le7ied# whiche7er is less# pro7ided that where no tax is le7ied# 8a
fee of one thousand rupees in case of companies and two hundred rupees in case of other assessees9 shall
0e paid/9
+;- %or the purposes of this section#-
+a- an order 0 the ,ommissioner declining to interfere shall 0e deemed not to 0e an order
preCudicial to the assessee; 8 9
+0- the Appellate 8Additional ,ommissioner9 shall 0e deemed too 0e an authorit su0ordinate
to the 8,entral Aoard of Re7enue9;
8+c- where# in pursuance of an order 0 the
'
8,entral Aoard of Re7enue9 under clause +0- of
su0-section +'- of section ;# a ,ommissioner exercises the powers of an Appellate
8Additional ,ommissioner9# references to 6,ommissioner6 shall 0e deemed to 0e
references to S,entral Aoard of Re7enueT;9
8+cc- where# in pursuance of an order 0 the ,ommissioner under clause +cc- of su0-section +'-
of section ;# an 2ncome $ax Panel exercises the powers of an 2ncome $ax "fficers#
references to 6,ommissioner6 shall 0e deemed to 0e references to 6Regional
,ommissioner6;
8+ccc- where# in pursuance of an order 0 the ,ommissioner under clause +c- of su0-section +'- of
section ;# an 2nspecting 8Additional ,ommissioner9 exercises the powers of an 8Deput
,ommissioner of 2ncome $ax9# references to 6,ommissioner6 shall 0e deemed to 0e
references to 6Regional ,ommissioner6;9
8+d- where an order is passed under section '';# references to 6,ommissioner6 shall 0e deemed
to 0e references to 6Regional ,ommissioner6; 8and9
8+e- where an order is passed 0 an Appellate 8Additional ,ommissioner9 on or after the first
da of &ul# '(('# reference to 6,ommissioner6 shall 0e deemed to 0e reference to
6
'
8Regional ,ommissioner9 6/
'
Su0s/ for >Regional ,ommissioner? 0 %/ "/ 3@@' J shall alwas deemed to ha7e 0een so su0stituted/ Earlier su0s/ for
>,entral Aoard of Re7enue? 0 %/ "/ 3@@@/
115
7CHAPTER XIIIA
SETTLEMENT OF CASES
'4=A/ I#o$e T!x Settle$et Co$$i''io/- +'- $he %ederal Eo7ernment shall appoint an 2ncome $ax
Settlement ,ommission to exercise the powers and discharge the functions conferred on it under this
,hapter/
+3- $he ,ommission shall consist of a ,hairman and as man mem0ers 8and associate mem0ers9 as ma
0e necessar and shall function within the Di7ision of the %ederal Eo7ernment dealing with re7enue/
+4- $he mem0ers of the ,ommission shall 0e appointed 0 the %ederal Eo7ernment from amongst persons
of integrit and outstanding a0ilit ha7ing special !nowledge of# and experience in# matters relating to
income tax law and accounts/
8+4A- $he %ederal Eo7ernment ma also appoint from amongst persons of integrit and outstanding
a0ilit a person with such experience as ma 0e prescri0ed# 0eing a ,hartered Accountant or a ,ost and
.anagement Accountant or possessing such 5ualification as ma 0e prescri0ed 0 the %ederal
Eo7ernment# as an associate mem0er of the ,ommission;
Pro7ided that the num0er of associate mem0ers shall not exceed the num0er of 0enches of the
,ommission/
+4A- $he terms# conditions and tenure of ser7ice of the associate mem0ers shall 0e determined 0 the
%ederal Eo7ernment/6;9
+:- $he %ederal Eo7ernment shall ordinaril appoint the senior most mem0er of the ,ommission to 0e the
,hairman thereof/
'4=A/ Definitions/- 2n this ,hapter# unless the context otherwise re5uires#-
8+i- 6associate mem0er6 means an associate mem0er appointed under su0-section +4A- of
section '4=A;9
8+ii-9 6case6 means an proceedings under this "rdinance for the assessment# including additional
assessment# appeal or re7ision in connection with such proceedings# of an person in
respect of an ear or ears# which ma 0e pending 0efore an income tax authorit# 2ncome
$ax Appellate $ri0unal or an court on the date of ma!ing the application under su0-
section +'- of section '4=D;
Pro7ided that where an appeal or application for re7ision or reference has 0een
filed after the period of limitation and which has not 0een admitted# such appeal#
application for re7ision or reference shall not 0e deemed to 0e a proceeding pending within
the meaning of this clause;
8+iii-9 6,hairman6 means the ,hairman of the ,ommission;
8+i7-9 6mem0er6 means a mem0er of the ,ommission# and includes the ,hairman thereof; and
116
8+7-9 6,ommission6 means the 2ncome $ax Settlement ,ommission appointed under section
'4=A/
'4=,/ Po/er' !" &0#tio' o& the Co$$i''io/- +'- $he powers and functions of the ,ommission ma
0e exercised and discharged 0 0enches constituted from amongst mem0ers of the ,ommission 0 the
,hairman/
+3- A 0ench shall ordinaril consist of two mem0ers and shall 0e presided o7er 0 the ,hairman1
Pro7ided that# where the ,hairman is not a mem0er of the 0ench# the ,hairman ma authorise an
mem0er to discharge the functions of the ,hairman819
8Pro7ided further that where the applicant ma!es an application under section '4=D in writing for
settlement of his case with the inclusion of associate mem0er in the 0ench# the 0ench shall 0e so
constituted/9
8+3A- $he functions of the ,ommission shall 0e-
+a- to process and decide applications filed 0 assessees declaring income not hitherto
declared;
+0- to process and decide applications filed 0 the assessees regarding tax disputes arising out
of an assessment order or an order passed 0 an Appellate Additional ,ommissioner;
+c- to process departmental appeals filed 0efore the 2ncome $ax Appellate $ri0unal for
settlement or withdrawal thereof; and
+d- an other function specificall assigned 0 the %ederal Eo7ernment to the ,ommissionS1T9
'
8Pro7ided that this ,ommission shall not perform its functions referred to in clause +c- after the
4@th da of &une# 3@@@/9
+4- Su0Cect to the pro7isions of this "rdinance# the ,ommission shall ha7e power to regulate its own
procedure# and the procedure of 0enches in all matters arising out of the discharge of its functions#
including the places at which the 0enches shall hold their sittings/
+:- 2f the mem0ers of a 0ench differ in opinion as to the decision to 0e gi7en on an point#-
+a- the point shall 0e decided according to the opinion of the maCorit# if there is a maCorit;
+0- if the mem0ers are e5uall di7ided and the ,hairman of the ,ommission is not himself a
mem0er of the Aench# the case shall 0e referred to the ,hairman and the decision of the
,ommission shall 0e expressed in terms of the opinion of the ,hairman; and
+c- if the mem0ers are e5uall di7ided and the ,hairman of the ,ommission is himself a mem0er
of the 0ench# the opinion of the ,hairman shall pre7ail and the decision of the ,ommission
shall 0e expressed in terms of opinion of the ,hairman/
'
Pro7iso ins/ 0 %/ "/ 3@@@/
117
+;- 2n addition to powers conferred on the ,ommission under this ,hapter# it shall ha7e all the powers
which are 7ested in an income tax authorit under this "rdinance/
'4=D/ A++li#!tio &or 'ettle$et o& #!'e'/- +'- An assessee 8whose case falls under clause +a- of su0-
section +3A- of section '4=,9 ma# at an stage of his case# ma!e an application in such form and in such
manner as ma 0e prescri0ed# containing full and true disclosure of his income which he ma not ha7e
disclosed 0efore the assessing officer# the manner in which such income has 0een deri7ed# the additional
amount of income tax paa0le on such income and such other particulars as ma 0e prescri0ed# to the
,ommission to ha7e the case settled and an such application shall 0e disposed of in the manner pro7ided
hereinafter1
8+'A- An assessee whose case falls under clause +0- of su0-section +3A- of section '4=, ma ma!e an
application in such form and in such manner as ma 0e prescri0ed against an assessment order or an order
passed 0 an appellate authorit# not 0eing the 2ncome $ax Appellate $ri0unal or an court of law# to the
,ommission# to ha7e the case settled and an such application shall 0e disposed of in the manner pro7ided
hereinafter1
Pro7ided that the tax paa0le under such order exceeds twent-fi7e thousand rupees/9
Pro7ided that no such application shall 0e made unless the assessee has filed the return of income which
he was or is re5uired to furnish under the "rdinance and the income tax paa0le on the 0asis of such
8application exceeds twent-fi7e thousand rupees/
8 9
+3- E7er application made under su0-section +'- shall 0e accompanied 0 such fees as ma 0e prescri0ed
0 the ,ommission/
+4- An assessee once ha7ing made an application under su0-section +'- shall not 0e entitled to withdraw it/
'
8+:- No application under this section shall 0e made after the 4@th da of &une# 3@@@/9
8'4=E/ Di'+o'!l o& !++li#!tio ., the Co$$i''io/- +'- $he ,ommission ma# 0efore disposing of an
application# 8filed under su0-section +'- or su0-section +'A- of section '4=D9 call for such particulars as it
ma re5uire in respect of the case in the application 0rought 0efore it or cause further en5uiries to 0e made
0 the ,ommissioner and on the 0asis of his report and ha7ing regard to the nature and circumstances of
the case# the ,ommission ma# 0 order# allow the application to 0e proceeded with or reCect the
application1
Pro7ided that an application shall not 0e reCected under this su0-section unless an opportunit has 0een
gi7en to the applicant of 0eing heard/
+3- Notwithstanding anthing contained in su0-section +'-# an application shall not 0e proceeded with
under that su0-section if the ,ommissioner o0Cects to such application on the ground that concealment of
particulars of income on the part of the applicant
or perpetration of fraud 0 him for e7ading an tax under this "rdinance# has 0een esta0lished or is li!el
to 0e esta0lished 0 an income tax authorit1
'
Su0-sec/ +:- ins/ 0 %/ "/ 3@@@/
118
Pro7ided that where the ,ommission does not agree with the o0Cections raised 0 the ,ommissioner# it
ma# after gi7ing the ,ommissioner an opportunit of 0eing heard# accept the application for 0eing
proceeded with under su0-section +'-/
+4- Where an application is allowed to 0e proceeded with under su0-section +'-# the ,ommission ma call
for the rele7ant records from the ,ommissioner and after examination of such records# if the ,ommission
is of the opinion that an further in5uir in the matter is necessar# it ma direct the ,ommissioner to
ma!e or cause to 0e made such further en5uir and furnish a report on the matters within such time as it
ma fix/
+:- After examination of the records and the report of the ,ommissioner recei7ed under su0-section +'- or
su0-section +4-# and after gi7ing an opportunit to the applicant and to the ,ommissioner to 0e heard# in
person or through their authorised representati7es and after examining such further e7idence as ma 0e
placed 0efore it or o0tained 0 it# the ,ommission ma# in accordance with the pro7isions of this
"rdinance# pass such order as it thin!s fit on the matters enumerated in the application and reported to it
0 the ,ommissioner under su0-section +'- or su0-section +4-/
+;- E7er order passed under su0-section +:- shall pro7ide for the terms of settlement including an
demand of tax# penalt or interest# the manner in which an sum due under the settlement shall 0e paid
and all other matters to ma!e the settlement effecti7e and shall also pro7ide that the settlement shall 0e
7oid if it is su0se5uentl found 0 the ,ommission that it has 0een o0tained 0 fraud or misrepresentation/
+<- Where a settlement 0ecomes 7oid the proceedings with respect to the matters relating to the settlement#
shall 0e re7i7ed from the stage at which the application was allowed except a matter pending in appeal or
re7ision 0efore ma!ing an application under su0-section +'- of section '4=D# to 0e proceeded with and the
concerned income tax authorit ma# notwithstanding anthing contained in an other pro7ision of this
"rdinance# complete such proceedings within two ears from the end of the financial ear in which the
settlement 0ecame 7oid/
+)- $he ,ommission ma# if it is of the opinion that an person who made an application under section
'4=D does not cooperate with the ,ommission in the proceedings 0efore it# send the case 0ac! to the
assessing officer# if such case was pending for assessment at the time application under that section was
made# who shall thereupon dispose of the case in accordance with the pro7isions of this "rdinance as if no
application under section '4=D had 0een made/
'
8 9
'4=%/ Re#o5er, o& '0$' "0e 0"er or"er o& 'ettle$et/- An sum specified in an order of settlement
passed under su0-section +:- of section '4=E shall# su0Cect to such conditions as ma 0e specified therein#
0e reco7ered# and an penalt for default in ma!ing pament of such sum ma 0e imposed and reco7ered
in accordance with the pro7isions of this "rdinance 0 the Deput ,ommissioner ha7ing Curisdiction in
the case/
'4=E/ @!r o '0.'eC0et !++li#!tio &or 'ettle$et i #ert!i #!'e'/- Where-
'
Sec/ '4=EE omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A/ '((</
119
+i- an order of the settlement passed under section '4=E pro7ides for the imposition of a
penalt on the person on the ground of concealment of particulars of his income; or
+ii- a person is con7icted of an offence under ,hapter D22 in pursuance of settlement of a
case; or
+iii- a case is sent 0ac! to the Deput ,ommissioner 0 the ,ommission for assessment or re-
assessment for an reason or where the settlement 0ecomes 7oid under this ,hapter# an
fresh application for settlement shall not 0e admissi0le/
'4=H/ Or"er o& Settle$et to .e #o#l0'i5e/- E7er order of the ,ommission passed under section
'4=E shall 0e conclusi7e as to the matters stated therein and no matter co7ered 0 such order shall# sa7e as
otherwise pro7ided in this ,hapter 0e re-opened in an proceeding under this "rdinance or under an law
for the time 0eing in force/
'4=2/ Po/er o& Co$$i''io to re1o+e +ro#ee"i2'.- 2f ,ommission is# for reasons to 0e recorded in
writing# of the opinion that for the proper disposal of the case pending 0efore it# it is essential to re-open
an proceedings connected with the case 0ut which ha7e 0een completed under this "rdinance 0 an
income tax authorit 0efore the application under section '4=D was made# it ma# with the concurrence of
the applicant# reopened such proceedings and pass such order thereon as it thin!s fit# as if the case in
relation to which the application for settlement had 0een made 0 the applicant under that section co7ered
such proceedings as well1
Pro7ided that no proceedings shall 0e re-opened 0 the ,ommission under this section if the period
0etween the end of the assessment ear to which such proceedings relate and the date of application for
settlement under section '4=D exceeds fi7e ears/
'4=&/ Pro#ee"i2' .e&ore Co$$i''io to .e =0"i#i!l +ro#ee"i2'/-An proceedings 0efore the
,ommission shall 0e deemed to 0e Cudicial proceedings within the meaning of sections '(4 and 33= and
for the purposes of section '(< of the Pa!istan Penal ,ode +Act D*B of '=<@-/
'4=Q/ Co$$0i#!tio' o& or"er'/- $he ,ommission shall communicate its order to the applicant# the
Deput ,ommissioner and the ,ommissioner/
120
7CHAPTER XIII1@
DIRECTORATE >ENERAL OF INSPECTION
'4=*/ A++oit$et o& Dire#tor!te >eer!l o& I'+e#tio/- +'- $he %ederal Eo7ernment shall appoint a
Directorate Eeneral of 2nspection to exercise the powers and discharge the functions conferred on it under
this ,hapter/
+3- $he Directorate-Eeneral shall consist of a Director-Eeneral and as man Directors# Additional
Directors# Deput Directors# Assistant Directors# Extra-Assistant Directors and 2nspectors# as the Director-
Eeneral ma deem necessar to 0e appointed from amongst the officers of 2ncome $ax Eroup/
'4=./ De&iitio'/- 2n this ,hapter# unless the context otherwise re5uires#-
+a- 6Director-Eeneral6 means a person appointed to 0e the Director-Eeneral of 2nspection;
+0- 6Director means a person appointed to 0e a Director of 2nspection;
+c- 6Additional Director6 means a person appointed to 0e in Additional Director of 2nspection;
+d- 6Deput Director6 means a person appointed to 0e a Deput Director of 2nspection and
includes an Assistant Director of 2nspection and an Extra Assistant Director of 2nspection;
+e- 62nspector6 means a person appointed to 0e an 2nspector of 2nspection/
'4=N/ I'+e#tio !0thoritie'/- +'- $here shall 0e the following classes of inspection authorities for the
purposes of this Act# namel1-
+a- Director-Eeneral of 2nspection;
+0- Directors of 2nspection;
+c- Additional Directors of 2nspection;
+d- Deput Directors of 2nspection; and
+e- 2nspectors of 2nspection/
+3- $he Directors of 2nspection# Additional Directors of 2nspection# Deput Directors of 2nspection and
2nspectors of 2nspection shall 0e su0ordinate to the Director-Eeneral of 2nspection/
+4- Additional Directors of 2nspection# Deput Directors of 2nspection and 2nspectors of 2nspection shall
0e su0ordinate to the Director of 2nspection within whose Curisdiction the perform their functions/
+:- Deput Directors of 2nspection and 2nspectors of 2nspection shall 0e su0ordinate to the Additional
Director of 2nspection within whose Curisdiction the perform their functions/
+;- 2nspectors of 2nspection shall 0e su0ordinate to the Deput Director of 2nspection within whose
Curisdiction the perform their functions/
'4="/ &urisdiction of inspection authorities/- +'- Su0Cect to the pro7isions of this ,hapter#-
121
+a- the Directors of 2nspection# Additional Directors of 2nspection# Deput Directors of
2nspection and 2nspectors of 2nspection shall perform their function in respect of such
persons or classes of persons or such areas as ma 0ee assigned to them 0 the Director-
Eeneral;
+0- the Additional Directors of 2nspection# Deput Directors of 2nspection and 2nspectors of
2nspection shall perform their functions in respect of such persons or classes of persons or
such areas as ma 0e assigned to them 0 the Director of 2nspection/
+3- $he Director-Eeneral or the Director ma assign an function or functions in respect of an area#
office or offices located within an area# case# class of cases# person or classes of persons# to an inspection
authorit wor!ing under his control/
'4=P/ F0#tio' !" +o/er' o& Dire#tor1>eer!l/- +'- $he functions of the Director-Eeneral of
2nspection shall 0e-
+a- to carr out inspections of income tax cases and offices;
+0- to in7estigate or cause in7estigation to 0e carried out in respect of-
+i- cases in7ol7ing lea!age of re7enue or e7asion of taxes;# and
+ii- officers and staff of the income tax offices allegedl in7ol7ed in corruption and
malpractice and recommend to competent authorit appropriate disciplinar action;
+c- to carr out audit of cases or office in7ol7ing income tax re7enues;
+d- to recommend the ,entral Aoard of Re7enue in matters of tax polic# tax administration
and tax operations;
+e- to furnish an annual report a0out the wor!ing of 2ncome $ax offices to the ,entral Aoard of
Re7enue 0 the thirt first da of Decem0er# following the end of the financial to which it
relates;
+f- an other wor! of function that ma 0e assigned to it 0 the %ederal Eo7ernment/
+3- 2n discharge of his functions under su0-section +'-# the Director-Eeneral shall ha7e the power specified
in section ':=/9
122
CHAPTER XIB
MISCELLANEOAS
'4(/ St!te$et re2!r"i2 '!l!r,/- E7er person responsi0le for paing an income chargea0le under the
head FSalarG shall# 8 9 furnish to the 8Deput ,ommissioner9 or an other officer authorised in this 0ehalf
0 the ,entral Aoard of Re7enue# a statement 8 9 in the prescri0ed manner# showing-
+a- the name and address of e7er person who has 0een paid# or to whom was due during the
8period for which each statement is 0eing furnished9# an income chargea0le under the
head FSalarG# exceeding such amount as ma 0e prescri0ed;

+0- the amount so paid# or due to such person;
+c- the amount of tax deducted from the income of such person; and
+d- such other particulars as ma 0e prescri0ed/
':@/ St!te$et re2!r"i2 "i5i"e"'/- $he principal officer of e7er domestic compan shall# 8 9
furnish to the 8Deput ,ommissioner9 or an other officer authorised in this 0ehalf 0 the ,entral Aoard
of Re7enue# a statement in the 8 9 prescri0ed manner# showing-
+a- the name and address +as entered in the registered of share-holders maintained 0 the
compan- of e7er shareholder to whom 80onus shares or 0onus or9 a di7idend or
aggregate di7idends exceeding such amount as ma 0e prescri0ed in this 0ehalf has or ha7e
0een distri0uted during the 8period for which each statement is 0eing furnished9;
+0- the total amount of 80onus shares or 0onus9 or di7idend or di7idends so distri0uted to such
shareholder; and
+c- such other particulars as ma 0e prescri0ed/
':'/ St!te$et re2!r"i2 itere't, 7+ro&it,8 ret, et#/- E7er person responsi0le for paing an interest
+8including9 interest on securities-# 8profit in respect of a profit and loss sharing account or deposit with a
0an!ing compan#9 0ro!erage# commission# rent# or professional fee +exceeding such amount as ma 0e
prescri0ed- on 0ehalf of Eo7ernment# a local authorit# 8compan9# a foreign contractor consultant or
consortium shall 8 9 furnish to the 8Deput ,ommissioner9 or an other officer authorised in this 0ehalf 0
the ,entral Aoard of Re7enue# a statement 8 9 in the prescri0ed manner# showing-
+a- the name and address of e7er person to whom such interest# 8profit#9 0ro!erage#
commission# rent or professional fee# during the 8period for which each statement is 0eing
furnished9;
+0- the total amount of such interest# profit# 0ro!erage# commission# rent or professional fee
was paid to such person;
+c- the date on which such pament was made; and
+d- such other particulars as ma 0e prescri0ed-
123
Explanation/- As used in this section#-
8 9
+3- 6professional fee6 includes fee paid for ser7ices performed 0 a doctor# architect# lawer#
,hartered Accountant or a .anagement and ,ost Accountant# and such other person as ma 0e
prescri0ed/
':3/ St!te$et re2!r"i2 +!,$et' to o1re'i"et' !" #otr!#tor'/- E7er person responsi0le for
paing to an person an sum to which su0-section +4-8# su0-section +4A-9 or su0-section +:- of section ;@
applies shall# 8 9 furnish to the Deput ,ommissioner or an other officer authorised in this 0ehalf 0 the
,entral Aoard of Re7enue# a statement 8 9 in the prescri0ed manner showing-
+a- the name and address of e7er person to whom an such sum was paid during the 8period
for which each statement is 0eing furnished9;
+0- the amount so paid;
+c- the amount of tax deducted; and
+d- such other particulars as ma 0e prescri0ed/
':4/ St!te$et re2!r"i2 #ert!i +!,$et'/- E7er person responsi0le to deduct or collect ad7ance tax
under su0-section +3A-# +;A-# +<-# +),- 8#+)E- or +)%-9 of section ;@ shall# 8 9 furnish to the 8Deput
,ommissioner9 or an other officer authorised in this 0ehalf 0 the ,entral Aoard of Re7enue# a statement
showing particulars 8 9 in the prescri0ed manner/
':4A/ St!te$et re2!r"i2 #ert!i +ro+ertie'/- +'- E7er Registering "fficer# Re7enue "fficer or other
officer appointed to register an documents relating to propert# other than agricultural land# under the
Registration Act# '(@= +DB2 of '(@=# shall# on or 0efore the first da of Septem0er in each ear# furnish to
the 8Deput ,ommissioner9 or an other officer authorised in this 0ehalf 0 the ,entral Aoard of Re7enue#
a statement regarding the properties the 7alue of which is not less than fift thousand rupees# registered
with him during the preceding financial ear# in the prescri0ed form and 7erified in the prescri0ed manner#
showing-
+a- the names and addresses of the 0uer and the seller;
+0- the registered 7alue of the propert;
+c- the address of the propert;
+d- the date of registration; and
+e- such other particulars as ma 0e prescri0ed/
+3- E7er person responsi0le for the assessment of capital gains tax arising from the sale# exchange or
transfer of immo7a0le propert situated within the ur0an areas specified 0 the Eo7ernment under the
124
West Pa!istan Mr0an 2mmo7a0le Propert $ax Acct# '(;= +West Pa!istan Act No/ B of '(;=-# shall# on or
0efore the first da of Septem0er in each ear# furnish to the 8Deput ,ommissioner9 or an other officer
authorised in this 0ehalf 0 the ,entral Aoard of Re7enue# a statement regarding the properties assessed to
capital gains tax 0 him during the preceding financial ear in the prescri0ed form and 7erified in the
prescri0ed manner# showing-
+a- the names and addresses of the 0uer and the seller;
+0- the assessed 7alue of the propert;
+c- the address of the propert;
+d- the date of assessment; and
+e- such other particulars as ma 0e prescri0ed/
+4- E7er person responsi0le to collect ad7ance tax under su0-section +)A- or su0-section +)AA- of section
;@ shall# on or 0efore the first da of Septem0er in each ear# furnish to the 8Deput ,ommissioner9 or
an other officer authorised in this 0ehalf 0 the ,entral Aoard of Re7enue# a statement showing
particulars in the prescri0ed form and 7erified in the prescri0ed manner/
':4A/ St!te$et re2!r"i2 #ert!i !''e''ee'/- E7er person whose income is chargea0le under section
=@A#
'
8section =@AA# section =@,# section =@,, or section =@,D9 shall# on or 0efore the thirtieth da of
Septem0er in each ear# furnish to the 8Deput ,ommissioner9# or an other officer authorised in this
0ehalf 0 the ,entral Aoard of Re7enue# a statement showing such particulars relating to his income for
the preceding financial ear# and in such form# and 7erified in such manner# as ma 0e prescri0ed/
3
8':4,/ Di'+l!,i2 o& N!tio!l T!x N0$.er #erti&i#!te. +'- All assessees ha7ing income from 0usiness
or profession shall displa their National $ax Num0er certificate at some conspicuous place of their
0usiness premises/
+3- Where an person has# without reasona0le cause# failed to compl with the pro7isions of su0-section
+'-# the Deput ,ommissioner ma# with the prior appro7al of ,ommissioner impose a fine which ma
not exceed two thousand rupees/
+4- No action under su0-section +3- shall 0e ta!en unless the assessee has 0een gi7en a reasona0le
opportunit of 0eing heard/
':4D/ O.t!ii2 o& N!tio!l T!x N0$.er C!r"/- +'- All assessees shall o0tain National $ax Num0er
,ard on pament of a prescri0ed fee/
+3- Where an person has# without reasona0le cause# failed to compl with the pro7isions of su0-section
+('-# the Deput ,ommissioner ma# with the prior appro7al of the ,ommissioner# impose a fine not
exceeding two thousand rupees/
+4- No action under su0-section +3- shall 0e ta!en unless the assessee has 0een gi7en a reasona0le
opportunit of 0eing heard/9
'
Su0s/ for certain words etc/ 0 %/ "/ 3@@'/
3
Secs/ ':4, J ':4D ins/ 0 %/A/'((</
125
'
8':4E/ Li!.ilit, o& t!x /ithhol"i2 !2et' to .e re2i'tere"/- +'- E7er person responsi0le to deduct or
collect tax under this "rdinance shall get himself registered in the manner as ma 0e prescri0ed;
+3- Where an person without reasona0le cause# fails to get himself registered under su0-section +'-# the
Deput ,ommissioner ma impose upon such person a penalt not exceeding two thousand rupees1
Pro7ided that no such penalt shall 0e imposed unless such person has 0een gi7en a reasona0le
opportunit of 0eing heard/9

'::/ Po/er to #!ll &or i&or$!tio/- $he 8Deput ,ommissioner9# the 2nspecting 8Additional
,ommissioner9# the ,ommissioner# or an other officer authorised in this 0ehalf 0 the ,ommissioner or
the ,entral Aoard of Re7enue# ma# 0 notice in writing# re5uire-
+a- an assessee to furnish within such time as ma 0e specified in such notice a statement
showing the names and addresses of all persons to whom he has paid in an income ear
rent# interest# commission# 8fee9# roalt or 0ro!erage# or an annuit amounting to not less
than four hundred rupees together with particulars of all such paments 8or remuneration in
the nature of 7alua0le consideration# under whate7er nomenclature9;
+0- an dealer# 0ro!er or agent or an person concerned in the management of a Stoc! or
,ommodit Exchange to furnish# within such time as ma 0e specified in such notice# a
statement showing the names and addresses of all persons to or from whom he# or the
Exchange# has paid or recei7ed in an income ear an sum amounting to not less than fi7e
thousand rupees in the aggregate# in connection with the transfer of assets# together with
particulars of all such paments and receipts;
+c- an person# including a 0an!ing compan# to furnish such information or such statement or
accounts as ma 0e specified in such notice1
Pro7ided that no such notice shall 0e issued to an 0an!ing compan as respects
an client# except with the prior appro7al of the ,ommissioner in the case of an 8Deput
,ommissioner9# or the ,entral Aoard of Re7enue or an other income-tax authorit
authorised 0 it in this 0ehalf in the case of the other officer/
':;/ Po/er o& '0r5e,/- Notwithstanding anthing contained in an other pro7ision of this "rdinance
and su0Cect to such directions as ma# from time to time# 0e issued 0 the ,entral Aoard of Re7enue in
this 0ehalf# the 2nspecting 8Additional ,ommissioner9#the 8Deput ,ommissioner9 or an 2nspector of
2ncome $ax ma enter an premises within the area assigned to him for the purpose of ma!ing a sur7e of
persons lia0le to tax under this "rdinance and-
+a- inspect an accounts or documents;
+0- stamp such accounts and documents;
+c- ta!e extracts from such accounts and documents; and
'
Sec/ ':4E ins/ 0 %/A/'(((/
126
+d- ma!e such en5uiries as ma 0e necessar/
':</ Po/er to eter !" 'e!r#h .0'ie'' +re$i'e'/- 6$he 2nspecting 8Additional ,ommissioner9 or
the 8Deput ,ommissioner9 or an other officer authorised in this 0ehalf 0 the ,entral Aoard of Re7enue
or if so authorised in writing 0 the 2nspecting 8Additional ,ommissioner9 or the 8Deput ,ommissioner9
to whom he is su0ordinate# an 2nspector of 2ncome $ax ma# for the purpose of ma!ing an in5uir# enter
the premises in which a person carries on# or is 0elie7ed to carr on# his 0usiness or profession# and ma-
+a- search such premises and inspect an accounts or documents;
+0- stamp such accounts or documents or ta!e extracts or copies thereof;
+c- impound such accounts or documents and retain them for so long as ma 0e necessar for
examination thereof or for the purposes of prosecution; and
+d- ma!e an in7entor of an articles found in such premises/
+3- $he 8Director-Eeneral of 2ntelligence and 2n7estigation9# the ,ommissioner and the 2nspecting
8Additional ,ommissioner9 ma ma!e an en5uir which the consider necessar as respects an person
lia0le or 0elie7ed to 0e lia0le to assessment under this "rdinance or re5uire an such person to produce or
cause to 0e produced an accounts or documents which the consider necessar# and shall ha7e the same
powers for the purpose of ma!ing an such en5uir of re5uiring the production of accounts or documents
under this "rdinance as the 8Deput ,ommissioner9 has/
+4- Notwithstanding anthing contained in this "rdinance# the 8Deput ,ommissioner9 ma# with the prior
appro7al of the ,ommissioner# authorise an 7aluer to enter an place and inspect such accounts and
documents as ma 0e necessar to ena0le him to ma!e a 7aluation of an asset for the purposes of section
<)/
':)/ A''i't!#e to i#o$e t!x !0thoritie'/- All officers of ,ustoms# ,entral Excise# Pro7incial Excise
and $axation# Police and the ,i7il Armed %orces are here0 empowered and re5uired to assist income tax
authorities in the discharge of their functions under this "rdinance/
':=/ Po/er to t!-e e5i"e#e o o!th, et#/- +'- $he 8Deput ,ommissioner9# the 2nspecting 8Additional
,ommissioner9# the Appellate 8Additional ,ommissioner9# the ,ommissioner and an other officer under
the administrati7e control of the ,entral Aoard of Re7enue authorised 0 it in this 0ehalf# and the
Appellate $ri0unal shall# for the purposes of this "rdinance# ha7e the same powers as are 7ested in a
,ourt under the ,ode of ,i7il Procedure# '(@= +B of '(@=-# when tring a suit in respect of the following
matters# namel1-
+a- enforcing the attendance of an person and examining him on oath or affirmation;
+0- compelling the production of an accounts or documents;
+c- recei7ing e7idence on affida7it; and
+d- issuing commissions for the examination of witnesses/
127
+3- Where a person to whom a summons is issued under su0-section +'- either to attend to gi7e e7idence
or to produce accounts or documents at the place and time specified in such summons fails to do so
without an reasona0le cause# the authorit issuing such summons ma# without preCudice to the
pro7isions of an other law for the time 0eing in force# imposed upon him such fine not exceeding one
thousand rupees as it thin!s fit# and the fine so imposed ma 0e reco7ered in the manner pro7ided in
,hapter 2D/
+4- $he pro7isions of su0-section +4- of section ''' shall mutatis mutandis appl in the case of an order
made under su0-section +3- 0 an authorit +other than the 8Deput ,ommissioner9 of 2ncome $ax- as
the appl to an order made under su0-section +'-of the said section '''/
':(/ Po/er to i$+o0" !" ret!i .oo-' o& !##o0t', et#/- An authorit referred to in su0-section
+'- of section ':= ma impound and retain in its custod for such period as it thin!s fit an 0oo!s of
accounts or retain in its custod for such period as it thin!s fit an 0oo!s of accounts or other documents
produced 0efore it in an proceeding under this "rdinance/
';@/ Di'#lo'0re o& i&or$!tio ., ! +0.li# 'er5!t/- +'- All particulars contained in-
+a- an statement made# return furnished or accounts or documents produced under the
pro7isions of this "rdinance; or
+0- an e7idence gi7en# or affida7it or deposition made# in the course of an proceedings under
this "rdinance other than proceedings under ,hapter D22; or
+c- an record of an assessment proceedings or an proceedings relating to the reco7er of a
demand# shall 0e treated as confidential# and no pu0lic ser7ant shall# sa7e as pro7ided in
this "rdinance# shall disclose an such particulars/
+3- Notwithstanding anthing contained in the E7idence Act# '=)3 +2 of '=)3-# or an other law for the
time 0eing in force# no court or other authorit shall# sa7e as pro7ided in this "rdinance# 0e entitled to
re5uire an pu0lic ser7ant to produce 0efore it an return# accounts or documents contained in# or forming
a part of# the records relating to an proceedings under this "rdinance# or an records of the 2ncome $ax
Department generall# or an part thereof# or to gi7e e7idence 0efore it in respect thereof/
+4- Nothing contained in su0-section +'- shall appl to the disclosure-
+a- of an such particulars to an person acting in the execution of this "rdinance# where it is
necessar to disclose the same to him for the purposes of this "rdinance; or
8+aa- of an such particulars to an person authorised 0 the ,entral Aoard of Re7enue in this
0ehalf# where it is necessar to disclose the same to him for the purposes of processing of
data and preparation of computer print-outs relating to returns of income or calculation of
tax; or9
+0- of an such particulars# where the disclosure is occasioned 0 the lawful emploment under
this "rdinance of an process for the ser7ice of an notice or the reco7er of an demand;
or
128
+c- of an such particulars to the Auditor Eeneral of Pa!istan for the purpose of ena0ling him
to discharge his functions under the ,onstitution; or
+d- of an such particulars to an officer appointed 0 the Auditor Eeneral of Pa!istan or the
,entral Aoard of Re7enue to audit income tax receipts or refunds; or
+e- of such facts to an officer of a Pro7incial Eo7ernment or the %ederal Eo7ernment
authorised 0 such Eo7ernment in this 0ehalf as ma 0e necessar for the purpose of
ena0ling that Eo7ernment to le7 or realise an tax imposed 0 it; or
+f- of such facts to an authorit exercising powers under the ,entral Excises and Salt Act#
'(:: 8 9 +2 of '(::-# the Sales $ax Act# '(;' +222 of '(;'-# the Eift $ax Act# '(<4# +D2B of
'(<4-# the Wealth $ax Act# '(<4 +DB of '(<4-# or the ,ustoms Act# '(<( +2B of '(<(-# as
ma 0e necessar for the purpose of ena0ling it dul to exercise such powers; or
+g- of an such particulars occasioned 0 the lawful exercise 0 a pu0lic ser7ant of his powers
under the Stamp Act# '=(( +22 of '=((-#to impound an insufficientl stamped document; or
+h- of such particulars to the State Aan! of Pa!istan as are re5uired 0 the said Aan! to ena0le
it to compile financial statistics of international in7estment and 0alance of paments; or
+i- of an such particulars as ma 0e re5uired 0 an order made under su0-section +3- of
section '( of the %oreign Exchange Regulation Act# '(:) +B22 of '(:)-# or for the purposes
of an prosecution for an offence under section 34 of that Act; or
+C- of an such particulars as ma 0e re5uired 0 the 8,orporate *aw Authorit9 or the
.onopolies ,ontrol Authorit for the purposes of the Securities and Exchange "rdinance#
'(<( +DB22 of '(<(-# or the .onopolies and Restricti7e $rade Practices +,ontrol and
Pre7ention- "rdinance# '()@ +B of '()@-# as the case ma 0e; or
+!- of an such particulars rele7ant to an in5uir into a charge of misconduct in connection
with income tax proceedings against a legal practitioner or an accountant to the authorit
referred to in su0-section +:- of section ';)# when exercising the functions referred to in
that section; or
+l- of an such particulars to a ,i7il ,ourt in an suit or proceeding to which the Eo7ernment
or an income tax authorit is a part# which relates to an matter arising out of an
proceeding under this "rdinance; or
+m- of an such particulars for the purposes of a prosecution for an offence under the Pa!istan
Penal ,ode +act D*B of '=<@- in respect of an such statement# returns accounts#
documents# e7idence# affida7it or deposition# or for the purposes of a prosecution for an
offence under this "rdinance; or
+n- of an such particulars# rele7ant to an in5uir into the conduct of an official of the 2ncome
$ax Department to an 8person or officer9 appointed to hold such in5uir# or to a Pu0lic
Ser7ice ,ommission# esta0lished under the ,onstitution# when exercising its functions in
relation to an matter arising out of such in5uir; or
129
+o- of such information as ma 0e re5uired 0 an officer or department of the %ederal
Eo7ernment or of a Pro7incial Eo7ernment for the purpose of in7estigation into the
conduct and affairs of an pu0lic ser7ant# or to a court in connection with an prosecution
of the pu0lic ser7ant arising out of an such in7estigation; or
+p- of such facts too an authorised officer of the Eo7ernment of an countr outside Pa!istan
with which the %ederal Eo7ernment has entered into an agreement under section '<4 for
the a7oidance of dou0le taxation and the pre7ention of fiscal e7asion as ma 0e re5uired to
0e disclosed in pursuance of that agreement8; or9
8+5- of such facts to the %ederal $ax "m0udsman appointed under an law for the time
0eing in force/9
+:- Nothing in this section shall appl to the production 0 a pu0lic ser7ant 0efore a court of an
document# declaration or affida7it filed# or the record of an statement or deposition made in a proceeding
under section <= or section ); or the gi7ing of e7idence 0 a pu0lic ser7ant in respect thereof/
8+;- Nothing contained in su0-section +'- shall pre7ent the ,entral Aoard of Re7enue from pu0lishing#
with the prior appro7al of the %ederal Eo7ernment# an such particulars as are referred to in that su0-
section/
8+;A- Nothing contained in su0-section +'- shall pre7ent the %ederal Eo7ernment from pu0lishing
particulars and the amount of tax paid 0 a holder of a pu0lic office as defined in the Ehtesa0 Act# '(()
+2D of '(()-/9
+<- An person to whom an information is communicated under this section# and an person or emploee
under his control# shall# in respect of that information# 0e su0Cect to the same rights# pri7ileges# o0ligations
and lia0ilities as if he were a pu0lic ser7ant and all the pro7isions of this "rdinance shall# so far as ma 0e#
appl accordingl/
+)- No prosecution shall 0e instituted under this section expect with the pre7ious sanction of the ,entral
Aoard of Re7enue/
';'/ Li$it!tio o& exe$+tio/- Where an income is exempt from tax# the exemption shall# in the
a0sence of a specific pro7ision to the contrar contained in this "rdinance# 0e limited to the original
recipient of that income and shall not extend to an person recei7ing an pament wholl or in part out of
that income/
';3/ T!x or re&0" to .e #!l#0l!te" to the e!re't r0+ee/- 2n the determination of the amount of tax or a
refund paa0le under this "rdinance# fractions of a rupee less than fift paisa shall 0e disregarded and
fractions of a rupee e5ual to or exceeding fift paisa shall 0e regarded as one rupee/
';4/ Re#ei+t' to .e 2i5e &or $oe,' +!i" or re#o5ere" 0"er thi' Or"i!#e/- A receipt shall 0e
gi7en for an mone paid or reco7ered under this "rdinance/
';:/ Ser5i#e o& oti#e/- +'- A notice# order or re5uisition +hereinafter referred to as FnoticeG- under this
"rdinance ma 0e ser7ed on the person therein named either 0 post or in the manner pro7ided for ser7ice
of a summons issued 0 a ,ourt under the ,ode of ,i7il Procedure# '(@= +B of '(@=-/
130
+3- An such notice ma 0e addressed#-
+a- in the case of a firm or a Hindu undi7ided famil# to an mem0er of the firm or to the
manager or an adult male mem0er of the famil;
+0- in the case of a local authorit# a compan or an association of persons# to the principal
officer thereof; and
+c- in the case of an other person +not 0eing an indi7idual-# to the person who manages or
controls its affairs/
+4- Where a firm or other association of persons is dissol7ed# an such notice ma 0e ser7ed on an
person who was a mem0er of the firm or the association# as the case ma 0e# immediatel 0efore such
dissolution/
+:- 2n an case to which section )3 applies such notice ma 0e ser7ed on the person whose income is to 0e
assessed# or in the case of a firm or an association of persons# on an person who was a mem0er of such
firm or association as the case ma 0e at the time of the discontinuance of 0usiness or profession# or 9in
the case of a compan# on the principal officer thereof/
+;- Where an order is made under su0-section +'- of section ); holding that a partition of an Hindu
undi7ided famil has ta!en place# an such notice ma 0e ser7ed on the person who was the last manager
of the famil or# if such person is dead# on all adult male persons who were mem0ers of the famil
immediatel 0efore the partition/
+<- $he 7alidit of an notice issued under this "rdinance or the 7alidit of ser7ice of an such notice
shall not 0e called in 5uestion after the return in response to such notice has 0een filed or compliance
thereto has 0een made/
';;/ Cert!i $i't!-e ot to 5iti!te !''e''$et, et#.- No assessment order# notice# warrant or other
document made# issued or executed or purporting to 0e made# issued or executed under this "rdinance
shall 0e 7oid or otherwise inoperati7e merel for want of form# 8or for ha7ing 0een generated through a
computer#9 or for a mista!e# defect or omission therein# if such want of form# or for ha7ing 0een generated
through a computer#9 or mista!e defect or omission# is not of a su0stantial nature preCudiciall affecting an
assessee/
';</ Re#ti&i#!tio o& $i't!-e'.-+'- An income tax authorit or the Appellate $ri0unal ma amend an
order passed 0 it to rectif an mista!e apparent from the record on its own motion or on such mista!e
0eing 0rought to its notice 0 an income tax authorit or 0 the assessee/
+3- No order under su0-section +'-# which has the effect of enhancing an assessment or reducing a refund
or otherwise increasing the lia0ilit of the assessee# shall 0e made unless the parties affected there0 ha7e
0een gi7en a reasona0le opportunit of 0eing heard/
+4- Where an such mista!e 0rought to the notice of an income tax authorit 0 the assessee and no order
under su0-section +'- is made 0 such authorit 0efore the expiration of the financial ear next following
the date in which it was so 0rought to its notice# the mista!e shall 0e deemed to ha7e 0een rectified and all
the pro7isions of this "rdinance shall ha7e the effect accordingl/
131
+:- No order under su0-section +'- shall 0e made after the expiration of four ears from the date of the
order sought to 0e amended/
';)/ A++e!r!#e ., !0thori'e" re+re'et!ti5e/- +'- An assessee who is entitled or re5uired to attend
0efore an income tax authorit or the Appellate $ri0unal in connection with an proceeding under this
"rdinance# ma# except when re5uired under section ':= to attend personall# attend 0 an authorised
representati7e/
+3- %or the purpose of this section#-
+a- 6authorised representati7e6 means a person authorised 0 the assessee in writing to appear on
his 0ehalf# 0eing-
+i- a relati7e of the assessee; or
+ii- a person in the emploment of the assessee on a whole time 0asis; or
+iii- an officer of a Scheduled Aan! with which the assessee maintains a current
account or has other regular dealings; or
+i7- an legal practitioner who is entitled to practice in an ,i7il ,ourt in Pa!istan; or
+7- an accountant; or
+7i- an income tax practitioner;
+0- 6accountant? means-
+i- a chartered accountant within the meaning of the ,hartered Accountants "rdinance#
'(<' +D of '(<'-; or
+ii- a cost and management accountant within the meaning of the ,ost and .anagement
Accountants Act# '(<< +D2B of '(<<-; or
+iii- a mem0er of an association of accountants recognised in this 0ehalf 0 the ,entral
Aoard of Re7enue; and
+c- 6income tax practitioner6 means a person who is registered as such 0 the ,entral Aoard of
Re7enue# 0eing a person who possesses such 8 9 5ualification as ma 0e prescri0ed in this
0ehalf or who has retired after putting in satisfactor ser7ice in the 2ncome $ax Department
for a period of not less than ten ears 8in a post or posts not inferior to that of an 2ncome
$ax "fficer9# and includes an person who was# and had continued to 0e# registered as an
income tax practitioner immediatel 0efore the commencement of this "rdinance/
+4- Notwithstanding anthing contained in this section#-
+a- no person who has 0een dismissed or remo7ed from ser7ice after the first da of April#
'(4=# shall 0e 5ualified to represent an assessee under su0-section +'-;
132
+0- no person who has 0ecome an insol7ent shall 0e 5ualified to represent an assessee under
su0-section +'- for so long as the insol7enc continues;
+c- no person other then a person to whom clause +a- applies# who is dis5ualified to represent
an assessee 0 7irtue of the pro7isions of su0-section +4- of section <' of the repealed Act
shall 0e 5ualified to represent an assessee under su0-section +'-;
+d- no person ha7ing resigned from ser7ice after ha7ing 0een emploed in the 2ncome $ax
Department for not less than two ears shall 0e entitled to represent and assessee under
su0-section +'- for a period of two ears from the date of his resignation;
+e- no person ha7ing retired from ser7ice in the 2ncome $ax Department shall 0e entitled to
represent an assessee under su0-section +'- for a period of one ear from the date of his
retirement in an case in which he had made or appro7ed# as the case ma 0e# an order of
assessment# refund or appeal within a period of one ear 0efore the said date; and
+f- no person who has 0een con7icted of an offence connected with an income tax
proceedings under this "rdinance# or the repealed Act# shall 0e 5ualified to represent an
assessee under su0-section +'- for such time as the ,ommissioner ma# 0 order in writing#
determine/
+:- 2f an person# 0eing a legal practitioner or an accountant# is found guilt of misconduct in his
professional capacit 0 an authorit entitled to ta!e disciplinar action against him# an order passed 0
that authorit shall ha7e effect in relation to his right to represent an assessee under su0-section +'- as it
has in relation to his right to practice as legal practitioner or accountant# as the case ma 0e/
+;- 2f an person# not 0eing a person to whom su0-section +:- applies# is found guilt of misconduct in
connection with an income tax proceedings 0 an ,ommissioner# the ,ommissioner ma# 0 an order in
writing direct that the said person shall thenceforward 0e dis5ualified to represent an assessee under su0-
section +'- 0efore an income tax authorit and the Appellate $ri0unal/
+<- No order under clause +f- of su0-section +4- or su0-section +;- shall 0e made in respect of an person
unless he has 0een gi7en a reasona0le opportunit of 0eing heard/
+)- An person against whom an order under clause +f- of su0-section +4- or su0-section +;- has 0een
made ma# within thirt das of such order# appeal to the ,entral Aoard of Re7enue to ha7e the order
cancelled/
+=- $he ,entral Aoard of Re7enue ma admit an appeal after the expiration of the period specified in su0-
section +)-# if it is satisfied that the appellant was pre7ented 0 sufficient cause from presenting it within
that period/
+(- No order made under clause +f- of su0-section +4- or su0-section +;- shall ta!e effect until the
expiration of thirt das from the ma!ing thereof# or# where on appeal has 0een preferred under su0-
section +)-# until the disposal of the appeal# whiche7er is the later/
+'@- $he ,entral Aoard of Re7enue ma ma!e rules for the registration of income tax practitioners and
matters connected therewith or incidental thereto# including matters relating to their code of conduct/
133
';=/ Pro#ee"i2' 0"er the Or"i!#e to .e =0"i#i!l +ro#ee"i2'/- An proceedings under this
"rdinance 0efore an Deput ,ommissioner# ,ommissioner or the Appellate $ri0unal shall 0e deemed to
0e Cudicial proceedings within the meaning of sections '(4 and 33= and for the purposes of section '(< of
the Pa!istan Penal ,ode +Act D*B of '=<@-/
';(/ Pro#ee"i2' !2!i't #o$+!ie' 0"er liC0i"!tio/- Notwithstanding anthing contained in
section ')' of the ,ompanies Act# '('4 +B222 of '('4-# lea7e of the ,ourt shall not 0e re5uired for
proceeding with or commencing an proceeding under this "rdinance against a compan in respect of
which a winding up order has 0een made or pro7isional li5uidator appointed/
'<@/ Co$+0t!tio o& li$it!tio +erio".- 2n computing the period of limitation# there shall 0e
excluded#-
+a- in the case of an appeal or an application under this "rdinance# the da on which the order
complained of was ser7ed and# if the assessee was not furnished with a cop of the order
when the notice of the order was ser7ed upon him# the time re5uisite for o0taining a cop
of such order; and
+0- in the case of an assessment or other proceedings under this "rdinance# the period# if an#
for which such proceedings were staed 0 an court# tri0unal or an other authorit/
'<'/ I"e$it,/- E7er person deducting# retaining or paing an tax in pursuance of this "rdinance in
respect of income 0elonging to another person is here0 indemnified for the deduction# retention or
pament thereof/
'<3/ @!r o& '0it' i Ci5il #o0rt'/- No suit shall 0e 0rought in an ,i7il ,ourt against an order made
under this "rdinance# and no prosecution# suit or other proceeding shall lie against an person for
anthing in good faith done or intended to 0e done under this "rdinance/
'<4/ A5oi"!#e o& "o0.le t!x!tio !" +re5etio o& &i'#!l e5!'io/- +'- $he %ederal Eo7ernment
ma enter into an agreement with the Eo7ernment of an countr for the a7oidance of dou0le taxation and
the pre7ention of fiscal e7asion with respect to taxes on income le7ia0le under this "rdinance and under
the corresponding law in force in that countr# and ma# 0 notification in the official EaHette# ma!e such
pro7isions as ma 0e necessar for implementing the agreement/
+3- Where an agreement is made in accordance with su0-section +'-# the agreement and the pro7isions
made 0 notification for implementing the said agreement shall# notwithstanding anthing contained in
an law for the time 0eing in force# ha7e effect in so far as the pro7ide for-
+a- relief from the tax paa0le under this "rdinance; or
+0- determining the income accruing or arising# or deemed to accrue or arise# to non-residents
from sources within Pa!istan; or

+c- where all the operations of 0usiness or profession are not carried on within Pa!istan#
determining the income attri0uta0le to operations carried on within and outside Pa!istan# or
the income chargea0le to tax in Pa!istan in the hands of such persons# including their
agents# 0ranches or esta0lishments in Pa!istan; or
134
+d- determining the income to 0e attri0uted to an person resident in Pa!istan ha7ing an
special relationship with a non-resident; or
+e- exchange of information for the pre7ention of fiscal e7asion or a7oidance of taxes on income
chargea0le under this "rdinance and under the corresponding law in force in that other
countr/
+4- $he pro7isions of the Se7enth Schedule shall ha7e effect where an agreement pro7ides that the tax
paa0le under the laws of the countr concerned shall 0e allowed as a credit against the tax paa0le in
Pa!istan/
+:- Notwithstanding anthing contained in su0-sections +'-# +3- and +4- an such agreement ma include
pro7isions for relief from tax for an period 0efore the commencement of this "rdinance or 0efore the
ma!ing of the agreement/
'<:/ Ail!ter!l relie&/- 2f an person who is resident in Pa!istan in an ear pro7es to the satisfaction of
the Deput ,ommissioner that# in respect of an income which has accrued or arisen to him during that
ear outside Pa!istan# he has paid income tax# 0 deduction or otherwise# in an countr +including a
countr with which there is an agreement under section '<4 for the a7oidance of dou0le taxation# the
Deput ,ommissioner ma# su0Cect to such rules as ma 0e made in this 0ehalf# deduct from the tax
paa0le 0 him under this "rdinance a sum e5ual to the tax calculated on such dou0l-taxed income at the
a7erage rate of tax 8of Pa!istan or the a7erage rate of tax9 of the said countr# whiche7er is the lower/

8'<:A/ Po/er to #olle#t i&or$!tio re2!r"i2 exe$+t i#o$e/- $he ,entral Aoard of Re7enue ma#
0 notification in the official EaHette# authorise an department or agenc of the %ederal Eo7ernment to
collect and compile an data in respect of incomes from industrial and commercial underta!ings which are
exempt under the Second Schedule/9
'<;/ Power to ma!e rules/- +'- $he ,entral Aoard of Re7enue ma# 0 notification in the official EaHette#
ma!e rules for carring out the purposes of this "rdinance/
+3- 2n particular# and with out preCudice to the generalit of su0-section +'-# such rules ma-
+a- prescri0e the manner in# and the procedure 0# which the income# profits and gains lia0le to tax and the
tax paa0le under this "rdinance shall 0e determined in the case of-
+i- income deri7ed in part from agriculture and in part from 0usiness; or
+ii- persons to whom section ;( applies; or
+iii- non-residents;
+0- pro7ide for the determination of the 7alue of an allowances# 0enefits or per5uisites;
+c- pro7ide for the ascertainment or determination of an income or class of income to 0e included in the
total income of an assessee# and an deduction from such income;
+d- prescri0e fees and other charges to 0e paid in respect of an matter referred to in this "rdinance;8 9
135
+e- pro7ide for anthing which is to 0e or ma 0e prescri0ed under this "rdinance8; or9
8+f- prescri0e forms for return of total income# or statements# which ma include details of personal
expenses8; or9
8+g- prescri0e the format and procedure for filling of returns of income# documents or statements on
computer media or through electronic medium or for the issuance of orders or notices or le7 of additional
tax or penalt through computerGG
+4- 2n cases coming under clause +a- of su0-section +3-# the rules ma prescri0e methods 0 which an
estimate of such income# profits and gains ma 0e made and prescri0e the proportion of the income which
shall 0e deemed to 0e income lia0le to tax under this "rdinance# and an assessment 0ased on such estimate
or proportion# as the case ma 0e# shall 0e deemed to 0e dul made in accordance with the pro7isions of
this "rdinance/
+:- $he power to ma!e rules conferred 0 this section shall# except on the first occasion of the exercise
thereof# 0e su0Cect to the condition of pre7ious pu0lication/
8'<;A/ A0thorit, o& !++ro5!l/- $he ,entral Aoard of Re7enue ma# 0 general or special order in
writing# authorise the Regional ,ommissioner or the ,ommissioner to grant appro7al in an case where
such appro7al is re5uired from the ,entral Aoard of Re7enue under an pro7ision of this "rdinance/9
'<</ Repeal and sa7ings/- +'- $he income-tax Act# '(33 +D2 of '(33- is here0 repealed/
+3- Notwithstanding the repeal of the 2ncome-tax Act# '(33 +D2 of '(33- and without preCudice to the
pro7isions of section < or section 3: of the Eeneral ,lauses Act# '=() +D of '=()-#-
+a- where a return of income has 0een filed 0efore the commencement of this "rdinance 0 an person for
an assessment ear# proceedings for the assessment of that person for that ear ma 0e ta!en and
continued as if this "rdinance had not come into force;
+0- where a return of income is filed after the commencement of this "rdinance otherwise than in
pursuance of an notice under section 4: of the repealed Act# 0 an person for an assessment ear
ending on or 0efore the thirtieth da of &une# '()(# the assessment of the person for that ear shall 0e
made in accordance with the procedure specified in this "rdinance;
+c- where in respect of an assessment ear#-
+i- a notice under section 4: of the repealed Act had 0een issued 0efore the commencement of this
"rdinance# the proceedings in pursuance of such notice ma 0e continued and disposed of as if this
"rdinance had not come into force;
+ii- an income chargea0le to tax had escaped assessment# or had 0een under assessed or assessed at too
low a rate# or had 0een the su0Cect of excessi7e relief or refund or the total income or the total world
income and the tax paa0le had 0een determined under su0-section +'- of section 34 of the repealed Act
and no proceedings under section 4: of the said Act in respect of an such income are pending at the
commencement of this "rdinance a notice under section <; ma 0e issued with respect to that assessment
ear and all the pro7isions of this "rdinance shall appl accordingl;
136
+d- in ma!ing an assessment for an ear ending on or 0efore the thirtieth da of &une# '()(# the
pro7isions of the repealed Act relating to the computation of total income and the tax paa0le shall appl
as if this "rdinance had not come into force;
+e- in ma!ing an assessment for the ear 0eginning on the first da of &ul# '()(# the income ear shall
0e deemed to include the period# if an# comprised in the pre7ious ear# as defined in clause +''- of
section 3 of the repealed Act# for which the assessment would ha7e 0een made if this "rdinance had not
come into force and where such income ear exceeds a period of twel7e months# the total income and the
tax paa0le shall 0e prorated on the 0asis of the a7erage income of a period of twel7e months;
+f- in ma!ing an assessment for an ear 0eginning on or 0efore the first da of &ul# '()(# the
pro7isions of section '=A and section 3<A of the repealed Act shall appl as if this "rdinance had not
come into force;
+g- an proceedings for the imposition of penalt or prosecution in respect of an assessment completed
0efore the first da of &ul# '()(# ma 0e initiated and an such penalt ma 0e imposed or prosecution
proceedings continued as if this "rdinance had not come into force;
+h- an proceeding for the imposition of a penalt or prosecution in respect of an assessment for an ear
ending on or 0efore the thirtieth da of &une# '()(# which is completed on or after the first da of &ul#
'()(# ma 0e initiated and an such penalt ma 0e imposed or prosecution proceeding continued as if
this "rdinance had not come into force;
+i- an proceeding pending on the commencement of this "rdinance 0efore an income tax authorit# the
Appellate $ri0unal or an court or tri0unal 0 wa of appeal# reference# re7ision or prosecution# shall 0e
continued and disposed of as if this "rdinance had not come into force;
+C- where the period prescri0ed for an application# appeal# reference or re7ision under the repealed Act
had expired on or 0efore the commencement of this "rdinance# nothing contained in this "rdinance shall
0e construed as ena0ling an such application# appeal# reference or re7ision to 0e made under this
"rdinance 0 reason onl of the fact that a longer period therefore is prescri0ed or pro7ision is made for
extension of time in suita0le cases 0 the appropriate authorit;
+!- an sum paa0le 0 wa of income tax# super tax# interest# additional tax# surcharge# penalt or
otherwise under the repealed Act ma 0e reco7ered under this "rdinance 0ut without preCudice to an
action alread ta!en for the reco7er of such sum under the repealed Act;
+l- where# in respect of an assessment completed 0efore the commencement of this "rdinance# an
default is made after such commencement in the pament of an sum due under such completed
assessment or an refund falls due after such commencement# the pro7isions of section =( or section '@3
of this "rdinance# as the case ma 0e# shall appl;
+m- an notification issued under su0-section +'- of section <@ of the repealed Act and in force
immediatel 0efore the commencement of this "rdinance# shall# to the extent to which pro7ision has not
0een made under this "rdinance# continue in force until rescinded 0 the %ederal Eo7ernment;
+n- an election or declaration made or option exercised 0 an assessee under an pro7ision of the
repealed Act and in force immediatel 0efore the commencement of this "rdinance shall 0e deemed to
137
ha7e 0een an election or declaration made or an option exercised under the corresponding pro7ision of this
"rdinance;
+o- anthing done or an action ta!en under the repealed Act in so far as it is not inconsistent with the
pro7isions of this "rdinance shall# without preCudice to anthing alread done or an action alread ta!en#
0e deemed to ha7e 0een done or ta!en under this "rdinance;
+p- an agreement entered into# appointment made# appro7al gi7en# recognition granted# direction#
instruction# notification# notice# order or rule issued or made under an pro7ision of the repealed Act and
in force or 7alid at the commencement of this "rdinance shall# so far as it is not inconsistent with the
corresponding pro7ision of this "rdinance or an agreement# appointment# appro7al# recognition#
direction# instruction# notification# notice# order or rule entered into# made# gi7en# granted# issued or made
under this "rdinance# 0e deemed to ha7e 0een entered into# made# gi7en# granted# or issued or made# as
the case ma 0e# under the corresponding pro7ision aforesaid and shall# unless re7o!ed# cancelled or
replaced 0# or under# this "rdinance# continue in force accordingl; and
+5- an appointment or an act of authorit or other thing made or done 0 an authorit or person and
su0sisting or in force at the commencement of this "rdinance which could ha7e 0een made or done under
an su0stantiall corresponding pro7ision of this "rdinance 0 an authorit or person other than the one
specified in the repealed Act# or in an manner other than that so specified# shall# continue in force and
ha7e effect as if it had 0een made or done under the corresponding pro7ision of this "rdinance 0 the
authorit or person or in the manner specified in the corresponding pro7ision as if such pro7ision had 0een
in force when it was made or done/
'<)/ Re$o5!l o& "i&&i#0ltie'/- +'- 2f an difficult arises in gi7ing effect to an of the pro7isions of this
"rdinance# the %ederal Eo7ernment ma# 0 notification in the official EaHette# ma!e such pro7ision as it
thin!s fit for remo7ing that difficult/
+3- No order under this section shall 0e made after the thirtieth da of &une# 8'(=4/9
138
THE FIRST SCHEDALE
PART 1
RATE OF INCOME TAX
8A/ 2n the case of e7er indi7idual# unregistered firm# association of persons# Hindu undi7ided famil and
artificial Curidical person referred to in clause +43- of section 3# not 0eing a case to which 8paragraph AA
or9 paragraph A of this part applies the income tax shall 0e charged on the total income# excluding income
to which sections =@A# =@, and =@,, appl# at the following rates1-
'/ Where the total income does ;V of total income#
not exceed Rs/'@@#@@@/
3/ Where the total income exceeds Rs/;#@@@ plus '@V of the
Rs/'@@#@@@ 0ut does not exceed amount exceeding Rs/'@@#@@@/
Rs/3@@#@@@/
4/ Where the total income exceeds Rs/';#@@@ plus ';V of the
Rs/3@@#@@@ 0ut does not exceed amount exceeding Rs/3@@#@@@/
Rs/4@@#@@@/
:/ Where the total income exceeds Rs/4@#@@@ plus 3@V of the
Rs/4@@#@@@ 0ut does not exceed amount exceeding Rs/4@@#@@@/
Rs/;@@#@@@
:/ Where the total income exceeds Rs/4@#@@@ plus 3@V of the
Rs/4@@#@@@ 0ut does not exceed amount exceeding Rs/4@@#@@@/
Rs/;@@#@@@
;/ Where the total income exceeds Rs/)@#@@@ plus 3;V of the
Rs/;@@#@@@ 0ut does not exceed amount exceeding Rs/;@@#@@@/
Rs/)@@#@@@

</ Where the total income exceeds Rs/'3@#@@@ plus 4@V of the
Rs/)@@#@@@ 0ut does not exceed amount exceeding Rs/)@@#@@@/
Rs/'#@@@#@@@
)/ Where the total income exceeds Rs/3'@#@@@ plus 4;V of the
Rs/'#@@@#@@@ amount exceeding Rs/4@@#@@@/
Pro7ided that-
+a- no income tax shall 0e paa0le 0 an assessee where his total income does not exceed-
+i- Rs/;@#@@@# in case the total income consists of# or includes# an income chargea0le
under the head 6Salar6# and such income constitutes more than ;@V of his total
income;
139
'
8 9
+iii- Rs/:@#@@@# in other cases/
+0- the income tax paa0le shall 0e reduced 0-
+i- Rs/3#;@@# in case the total income consists of# or includes# an income chargea0le
under the head 6Salar6# and such income constitutes more than fift per cent of his
total income;
3
8 9
+iii- Rs/3#@@@# in other cases; and
+i7- Special tax re0ate of an amount e5ual to 8;@V9 of the tax paa0le 0 an assessee of
<; ears of age or a0o7e as on the first da of the rele7ant income ear and earning
income upto Rs/3@@#@@@ in addition to an other re0ate admissi0le under the law;
8 9
+d- Notwithstanding anthing contained in this "rdinance# no re0ate for an allowance under
sections 4(# :@# :'# 8 9 :4# ::# ::A or :< shall 0e admissi0le;
+e- Notwithstanding anthing contained in this "rdinance# the re0ate for an allowance under
section :) shall 0e computed at the a7erage rate of tax and allowed accordingl/
+f- where the total income includes an income from a share of the income# profits and gains
of a firm to which paragraph , of Part 22 applies# such portion of the super tax paa0le
under the said paragraph as 0ears to the total amount of such super tax the same proportion
as his share of income# profits and gains of the firm 0ears to the total income of the firm
shall 0e added to the income tax paa0le 0 such partner under this paragraph# and if the
sum so arri7ed at exceeds 3@V of the income of such partner +including his share of
income# profits and gains of the firm 0efore the deduction of super tax-# the amount of
income tax paa0le 0 him under this paragraph shall 0e reduced 0 the amount of such
excess; and
+g- in the case of an assessee whose income consisting of# or including an income chargea0le
under the head 6salar6# +inclusi7e of allowances and per5uisites- exceeds Rs/ 4@@#@@@
income tax shall 0e charged in respect of income representing allowances and per5uisites#
at the following rates1
Where the amount representing the 7alue of allowances and per5uisites1
8'/ does not exceed Rs/'@@#@@@/ 4V of such amount
3/ exceeds Rs/'@@#@@@ 0ut does Rs/4#@@@ plus ;V of the
not exceed Rs/3@@#@@@/ amount exceeding Rs/'@@#@@@
'
Su0-cl/ +ii- omitted 0 %/ "/ 3@@@/
3
Su0-cl/ +ii- omitted 0 %/ A/ 3@@'/
140

4/ exceeds Rs/3@@#@@@ 0ut does Rs/=#@@@ plus '@V of the amount
not exceed Rs/4@@#@@@ exceeding Rs/3@@#@@@
:/ exceeds Rs/4@@#@@@ Rs/'=#@@@ plus ';V of the amount
exceeding Rs/ 4@@#@@@

Pro7ided that for the assessment ear '(()-(=
+a- the tax lia0ilit of an assessee in whose case 7aluation of per5uisites# allowances
and 0enefits for the purposes of computing income under the head 6salar6 is made
under su0-rule +'A- of rule 4 of the 2ncome $ax Rules# '(=3# shall 0e;
+i- the tax computed on total income on the 0asis of 7aluation of per5uisites
under su0-rule +'- of rule 4 of the said Rules;
+ii- three per cent of the amount representing the difference 0etween the 7alue
of per5uisites# 0enefits and allowances computed under su0-rule +'A- and
the 7alue computed under su0-rule +'- of the rule 4 said Rules; and
+0- for the purposes of computing the income chargea0le under the head 6Salar6# the
7alue of per5uisites# allowances and 0enefits in the case of emploees of Pa!istan
2nternational Airlines and Cournalists co7ered under the Wage Aoard Awards shall
0e computed under the pro7isions of su0-rule +'- of the rule 4 of the said Rules819
'
8Pro7ided further that nothing contained in this clause shall appl in the case of an assessee for
an assessment ear commencing on or after the first da of &ul# 3@@@1

8+h- Notwithstanding an in clause +g-# for the purposes of assessment for the assessment ear
'(((-3@@@# in the case of an assessee whose income consisting of# or including an income
chargea0le under the head >salar? +inclusi7e of allowances and per5uisites - exceeds Rs/
4@@#@@@# income tax shall 0e charged in respect of income representing allowances and
per5uisites# at the following rates1
Where the amount representing the 7alue of allowances and per5uisites#-
+a- does not exceed Rs/ '@@#@@@ ;V of such amount;

+0- exceeds Rs/ '@@#@@@ 0ut does Rs/;#@@@ plus '@V
not exceed Rs/3@@#@@@ of the amount exceeding Rs/'@@#@@@
+c- exceeds Rs/3@@#@@@ 0ut does Rs/ ';#@@@ plus ';V
does not exceed Rs/ 4@@#@@@ of the amount exceeding Rs/3@@#@@@
+d- exceeds Rs/ 4@@# @@@ Rs/4@#@@@ plus 3@V
of the amount ex exceeding
Rs/4@@#@@@/
'
$he 3
nd
J 4
rd
pro7isos ins/ 0 %/A/'(((/
141

+i- %or the purpose of deduction of tax at source under su0-section +'- of section ;@# the tax in
respect of the income for the financial ear '((=-'((( co7ered 0 clause +h- shall 0e
computed at the rates specified in that clause/9
'
8+C- %or the purposes of assessment# where the total income of an assessee comprises or
includes an income chargea0le under the head >Salar? and such income is more than
fift per cent of his total income# the rates specified in this paragraph shall 0e effecti7e
from the assessment ear commencing on or after the first da of &ul# 3@@@/
Pro7ided further that in the said cases# the entr at serial num0er ) in this paragraph#
shall ha7e the effect as if for the figure >4;?# the figure >4@? was su0stituted/
Pro7ided further that for the purpose of deduction of tax from salar under su0-
section +'- of section ;@# the rates specified in this para-graph shall# su0Cect to the first
pro7iso# appl in respect of income ear '(((-3@@@ and thereafter/
Explanation/- %or the remo7al of dou0t# it is here0 declared that for the purposes of
assessment for the assessment ear '(((-3@@@# the rates of tax applica0le to aforesaid cases
shall 0e the same as gi7en in this paragraph as it stood 0efore its amendment# through
%inance Act# '(((# and in clause +h- in respect of the income representing allowances and
per5uisites/
3
8 9
4
8A'/ Notwithstanding anthing contained in paragraph A# in the case of e7er indi7idual# unregistered
firm# association of persons# Hindu undi7ided famil and artificial Curidical person referred to in
clause +43- of section 3# not 0eing a case to which paragraph A of this part applies# the income tax
shall 0e charged on the total income# excluding income to which section =@A# =@AA# =@,# =@,, or
=@,D appl# for an assessment ear commencing on or after the first da of &ul# 3@@3# at the
following rates1
+'- where the total income Nil
does not exceed
Rs/<@#@@@
+3- where the total income )/;V of the
exceeds Rs/<@#@@@ 0ut does amount exceeding
not exceed Rs/';@#@@@ Rs/<@#@@@;
+4- where the total income Rs/<#);@ plus '3/;V
exceeds Rs/';@#@@@ 0ut does of the amount
not exceed Rs/4@@#@@@ exceeding Rs/';@#@@@;
+:- where the total income Rs/3;#;@@ plus 3@V exceeds
Rs/4@@#@@@ 0ut does of the amount
'
,l/ +C- ins/ 0 %/A/'(((/
3
Para AA omitted 0 %/ "/ 3@@@/
4
Paragraph A' ins/ 0 %/ "/ 3@@'/
142
not exceed Rs/:@@#@@@ exceeding Rs/4@@#@@@;
+;- where the total income Rs/:;#;@@ plus 3;V
exceeds Rs/:@@#@@@ of the amount
0ut does not exceed exceeding Rs/:@@#@@@/
Rs/)@@#@@@/
+<- where the total income Rs/'3@#;@@ plus 4;V
exceeds Rs/)@@#@@@ of the amount
exceeding Rs/)@@#@@@
Pro7ided that --
+a- where an assesseeNs income includes an income from agriculture which is
lia0le to tax under the laws of an pro7ince of Pa!istan and such income exceeds Rs/=@#@@@#
the tax rates applica0le in case of such taxpaers would 0e as under1-
+'- where the total income does
not exceed Rs/';@#@@@
)/; V
+3- where the total income
exceeds Rs/';@#@@@ 0ut
does not exceed Rs/4@@#@@@
Rs/''#3;@ plus '3/;V of
the amount exceeding
Rs/';@#@@@;
+4- where the total income
exceeds Rs/ 4@@#@@@ 0ut
does not exceed Rs/ :@@#@@@
Rs/4@#@@@ plus 3@V of the
amount exceeding
Rs/4@@#@@@;
+:- where the total income
exceeds Rs/ :@@#@@@ 0ut
does not exceed Rs/ )@@#@@@
Rs/;@#@@@ plus 3;V of the
amount exceeding
Rs/:@@#@@@;
+;- where the total income
exceeds Rs/ )@@#@@@
Rs/'3;#@@@ plus 4;V of
the amount exceeding Rs/
)@@#@@@/
+0- $he tax paa0le shall 0e reduced 0 an amount e5ual to fift per cent of the tax paa0le 0 an
assessee of sixt-fi7e ears of age or a0o7e as on first da of the rele7ant income ear and
earning income upto two hundred thousand rupees in addition to an other re0ate admissi0le
under the law/
+c- notwithstanding anthing contained in this "rdinance# no re0ate for an allowance under
sections 4(# :@# :'# :4# ::# ::A or :< shall 0e admissi0le/
143
+d- notwithstanding anthing contained in this "rdinance# re0ate for an allowance under sections
:'AA# ::AA and ::AAA shall 0e computed at the a7erage rate of tax and allowed
accordingl/
+e- where the total income includes an income from a share of the income profits and gains of a
firm to which paragraph , of Part 22 applies# such portion of the super tax paa0le under the
said paragraph as 0ears to the total amount of such super tax the same proportion as his share
of income# profits and gains of the firm 0ears to the total income of the firm shall 0e added to
the income tax paa0le 0 such partner under this paragraph# and# if the sum so arri7ed at
exceeds 3@V of the total income of such partner +including his share of income# profits and
gains of the firm 0efore the deduction of super tax-# the amount of income tax paa0le 0 him
under this paragraph shall 0e reduced 0 the amount of such excess;
+f- for the purposes of assessment# the rates specified in a0o7e paragraph will 0e applica0le to the
assessment ear commencing on# or after# the'st da of &ul 3@@3;
+g- notwithstanding the pro7isions of clause +f- of pro7iso to paragraph A' where the total income
of an assessee comprises or includes an income chargea0le under the head 6salar6 and such
income is more than fift per cent of his total income# the rates specified in this paragraph for
the purposes of deduction of tax under su0-section +'- of section ;@ shall 0e effecti7e from the
first da of &ul# 3@@';9
A/ 2n the case of e7er local authorit 4@ per cent of the total income/

,/ 2n the case of e7er compan
including a foreign association de-
clared to 0e a compan 0 the
,entral Aoard of Re7enue under
clause +'<- of section 3 on the total
income excluding such part of the
total income as consists of an
di7idends or 0onus or 0onus shares
to which su0-paragraph +3- or su0-
paragraph +4- of paragraph A of Part
22 applies and income to which
,hapter B applies/
4@ per cent of such income
8,,/ 2n the case of e7er indi7idual# unregistered firm# association of persons# Hindu undi7ided famil
and e7er artificial Curidical person referred to in clause +43- of section 3# not 0eing a case to which
paragraph A of this Part applies/
+a- on the di7idend income; $en per cent of such income/
+0- on the income 0 wa of priHe $en per cent of such income/
on a priHe 0ond or income
representing winnings from a
raffle# lotter or cross-word
puHHle;
144
+c- on the income representing $en per cent of such income/
profit or interest on an
account or deposit maintained
with an 0an!ing compan# or
an 8financial institutions9; and
'
8Pro7ided that this su0-paragraph shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3/9

+d- on the income representing $en per cent of such income/9
profit or interest on 0onds#
certificates# de0entures# and
instruments of e7er !ind
issued 0 an 0an!ing compan#
or an compan referred to in
su0-clause +a- and +0- of
clause +'<- of section 3# or
an local authorit# or an
finance societ;
8+e- on the amount recei7ed on
encashment of1
+i- 0earer certificates +other 3V of the amount/
than %oreign Exchange Aearer
,ertificates- issued on
0ehalf of the Eo7ernment#
0an!ing compan# financial
institution or an compan
referred to in su0-clause
+a- or su0-clause +0- of
clause +'<- of section 3#
an local authorit or an
finance societ/
+ii- %oreign Exchange Aearer 'V of the amount/9
,ertificates/

3
8Pro7ided that this su0-paragraph shall not appl in respect of an assessment
ear commencing on# or after# the first da of &ul# 3@@3/9
8,,,S+i-T/ 2n the case of e7er resident person
4
8holding a National $ax Num0er and9 to whom section
=@, applies#-
'
Pro7iso ins/ 0 %/ "/ 3@@'/
3
Pro7iso ins/ ibid/
4
Words ins/ 0 %/ "/ 3@@'/
145
'
8+a- %rom the assessment ear commencing on or after the first da of &ul# '(((# on the
income representing paments on account of execution of contracts other than the income
to which clause +0- or +c- 8or +cc-9 applies-
+i- Where the 7alue of contract fi7e per cent of such income;
does not exceed thirt million
rupees ///
+ii- Where the 7alue of contract six percent of such income/9
exceeds thirt million rupees ///
+0- on the income representing "ne and one half per
paments on account of suppl cent of such income/
of rice# cotton# cotton seed
and edi0le oils;
+c- on the income representing 8$hree9 and one half per cent
paments on account of of such income
supplies other than those
referred to in su0-paragraph +0-;
+cc- on the income representing $en per cent of such income;
paments on account of
0ro!erage or commission
Pro7ided that this clause shall ta!e effect from the assessment ear commencing on
the first da of &ul# 3@@@819
3
8Pro7ided further that this clause shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3;9
+d- on the income representing 8%i7e9 per cent of the 7alue of
7alue of goods imported such goods determined for the purposes of
deduction of ad7ance tax under su0-section
+;- of section ;@819
4
8Pro7ided that for the assessment ear commencing on or after the first da of &ul#
3@@'# the rate of tax shall 0e six per cent of the 7alue of goods imported;9
:
8+dd- on the income representing Ninet per cent of such
the difference referred to in su0- income
section +;AAA- of section ;@

'
,l/ +a- su0s/ 0 %/A/'((=/
3
Second pro7iso added 0 %/ "/ 3@@'/
4
Pro7iso ins/ 0 % / "/ 3@@@/
:
,l/ +dd- ins/ 0 %/A/'(((/
146
'
8Pro7ided that this clause shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3/9
8+e- on the income representing %i7e percent of the sale price/
lease mone on account of
octroi duties# tolls# fees or
other le7ies819
3
8Pro7ided that this clause shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3/9
8+f- on the income representing $en per cent/
commission or discount re-
ferred to in su0-section +)H-
of section ;@
4
8+ia- in the case of e7er resident person not holding a National $ax Num0er and to whom section
=@, applies# from the assessment ear commencing on# or after# the first da of &ul# 3@@'# on
the income representing paments on account of execution of contracts other than the income
to which clause +0- or +c- or +cc- of su0-paragraph +i- appl--
+i- where the 7alue of se7en per cent of such
contract does not income/
exceed thirt million rupees/
+ii- where the 7alue of eight per cent of
contract exceeds thirt such income/
million rupees/
+iii- on the income fi7e per cent of
representing pament such income/9
on account of supplies
8+ii- 2n the case of e7er non-resident person# to whom section =@, applies# on the income representing
paments on account of1

:
8+a- %rom the assessment ear commencing on or after the first da of &ul# '(((# on the
income representing paments on account of execution of contracts other than those
mentioned in su0-clause +0-# +c-# and +d-;
+i- Where the 7alue of contract fi7e per cent of such income;
does not exceed thirt million
rupees ///
+ii- Where the 7alue of contract six percent of such income/9
'
Pro7iso ins/ 0 %/ "/ 3@@'
3
Pro7iso ins/ 0 %/ "/ 3@@'/
4
Su0-paragraph +ia- ins/ 0 %/ "/ 3@@'/
:
,l/ +a- su0s 0 %/A/'((=/
147
exceeds thirt million rupees ///

+0- execution of turn-!e contracts 8eight9 percent of the amount
of pament/
+c- execution of contracts or su0- four per cent of the amount
contracts for designing# suppl of pament/
of plant and e5uipment and con-
struction of power proCects
8+other than hdel power pro-
Cects- and transmission line
proCects9;
8+d- execution of contracts# or su0- fi7e per cent of the amount
contractors for designing suppl of pament/9
of plant and e5uipment and con-
struction of hdel power proCects

8+dd- on the income representing the Ninet per cent of such
difference referred to in su0- income/
section +;AAA- of section ;@/
8,,,,/
'
8+a-9 2n the case of e7er person to whom section =@,,
3
8or =@,D9 applies 8including supplies of
goods to an exporter under a 0ac! to 0ac! inland letter of credit9# and the income pertains to exports
co7ered under1
+a- Part 2 of the Eighth Schedule; @/;@V of such income/
+0- Part 22 of the Eighth Schedule; @/);V of such income/

+c- Part 222 of the Eighth Schedule; 'V of such income/

4
8+0- for the assessment ear commencing on or after the first da of &ul# 3@@'# the rates shall 0e as
under1-
+i- Part-2 of Eighth Schedule @/);V of such income
+ii- Part-22 of Eighth Schedule '/@V of such income
+iii- Part-222 of Eighth Schedule '/3;V of such income/9
'
Paragraph ,,,, renum0ered as Su0-paragraph +a- 0 %/ "/ 3@@@/
3
Words etc/ added 0 %/ "/ 3@@'/
4
Su0-paragrapgh +0- ins/ ibid/
148
'
8,,,,A/ 2n the case of e7er person to whom section =@,D applies and the income pertains to exports
co7ered under1
+i- Part-2 of Eighth Schedule @/);V of such income
+ii- Part-22 of Eighth Schedule 'V of such income
+iii- Part-222 of Eighth Schedule '/3;V of such income/9
,,,,,/ "n income from indenting commission $en per cent
referred to in su0-section +;A- of
section ;@/
8D/ Rates of income tax for deduction under su0-section +3- of section ;@/-
+i- Residents
"n the whole of income chargea0le 4@V of such income
under the head K2nterest on
securitiesG +not 0eing interest
paa0le on de0entures issued 0 or
on 0ehalf of a local authorit or
a compan-/
+ii- Non-Residents
"n the whole of income chargea0le under the head F2nterest
on securitiesG paid to a non-resident -
+a- where such person is a compan thirt per cent; and
is a compan

+0- where such person is not a compan the rate applica0le to a resident
person not 0eing a compan/9
8DD/ Rate of income tax for the pur- $en per cent of such
poses of deduction under su0- income/9
section +3A- of section ;@/
8DDA/ Rate of income tax for the pur-
3
8@/4@9 per cent the sum9
poses of collection of tax under
su0-section +3A- of section ;@/
8DDD/ Rate of income tax for purposes of deduction under su0-section +4- of section ;@-

+i- in cases of pament on account of roalt W %ifteen percent of such
pament
'
Paragraph ,,,,A ins/ ibid/
3
Su0s/ for >@/3@? 0 %/A/'(((/
149
+ii- in an other case $hirt per cent sum
chargea0le or at the
rate applica0le to a
resident whiche7er is
greater
8DDDD/ Rate of income tax for '; per cent of the
purposes of deduction under su0- sum9
section +4A- of section ;@/
E/ Rate for collection of income tax under su0-section +:- of section ;@#-
+i- Where the pament is made to a resident assessee 8holding a National $ax Num0er9# on
account of-
+a- execution of contracts# other than those mentioned in su0-clauses +0-# +c- and +d- W
+i- where the 7alue of the contract fi7e per cent of such income/
Does not exceed thirt million
rupees#
+ii- Where the 7alue of contract ex- six per cent of such income/
ceeds thirt million rupees#
+0- suppl of rice# cotton# one and one-half per
cotton seed or edi0le oils; cent of the amount of
pament/

+c- suppl of goods other than 8three9 and one half
those referred to in su0- per cent of the amount
paragraph +0-; and of pament/

+d- ser7ices rendered/ fi7e per cent of the
amount of pament/
'
8+ia- Where the pament is made to a resident assessee not holding a National $ax Num0er# on
account of execution of contract other than the paments to which su0 clause +0-# +c- or +d-
of su0-paragraph +i- appl--
+i- where the 7alue of se7en per cent
contract does not exceed of such income
thirt million rupees/ /
+ii- where the 7alue of eight per cent
contract exceeds thirt of such income
million rupees/
'
Su0-paragraph +ia- ins/ 0 %/ "/ 3@@'/
150
+iii- on the income fi7e per cent of
representing paments such income/9
on account of supplies/
+ii- Where the pament is made to a non-resident# on account of-
+a- execution of contracts# other than those mentioned in su0-clauses +0-# +c- and +d- W
+i- where the 7alue of the contract fi7e per cent of such income/
does not exceed thirt million
rupees#
+ii- Where the 7alue of contract ex- six per cent of such income/
cedes thirt million rupees#
+0- execution of turn-!e con- 8eight9 per cent of
tracts/ the amount of pament/
+c- execution of contracts or four per cent of the
su0-contracts for designing# amount of pament/
suppl of plant and e5uipment
and construction of power
proCects + other than hdel
proCects- and transmission
line proCects/

8+d- execution of contracts# or su0- fi7e per cent of the
contractors for designing# suppl amount of pament/9
of plant and e5uipment and con-
truction of hdel power proCects
EE/ Rate for collection of income tax $en per cent of the
tax under su0-section +:A- of amount of pament/
section ;@/
%/ Rate for collection of income tax
'
8Six9 per cent/
tax under su0-section +;- of
section ;@/
3
8%%/ Rate of collection of income tax under su0-sections +;A-# +;AA- and +;AAA- of section ;@ appl#
excluding income to which paragraph %%A applies1
Where the income pertains to suppl of goods to an exporter under a 0ac!
to 0ac! inland letter of credit and from exports co7ered under1
'
Su0s/ for >fi7e 0 %/ "/ 3@@@/ Earlier su0s/ for >four? 0 2/ $/ +Second Amendt/- "rd/ # '(() and for >two? 0 %/ A/ '((;/
3
Paragraph %% su0s/ 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A/ '((3 and su0s/ 0 %/ A/ '(()/
151
Rates
+i- Part-2 of Eighth Schedule @/);V of such income
+ii- Part-22 of Eighth Schedule 'V of such income
+iii- Part-222 of Eighth Schedule '/3;V of such income/9
%%A/ 2ncome from indenting commission $en per cent/
referred to in su0-section +;A- of
section ;@/
'
8 9
E/ Rates for collection of income tax under su0-section +<- of
section ;@#-
8+'- goods transport 7ehicles with registered laden weight of-
+a- less than 3@4@ !ilograms/ "ne thousand two hundred rupees per annum

+0- 3@4@ !ilograms or more Se7en thousand two hundred
less than ='3@ !ilograms/ rupees per annum
+c- ='3@ !ilograms or more 0ut $wel7e thousand rupees per
less than ';@@@ !ilograms; annum
+d- ';@@@ !ilograms 0ut less Eighteen thousand rupees per
than 4@#@@@ !ilograms annum;
+e- 4@#@@@ !ilograms or more $went-four thousand rupees
0ut less than :;#@@@ !ilograms per annum;

+f- :;#@@@ !ilograms or more $hirt thousand rupees per
0ut less than <@#@@@ !ilograms annum;

+g- <@#@@@ !ilograms or more $hirt-six thousand rupees
per annum/

Pro7ided that no collection shall 0e made in respect of goods transport 7ehicles falling under su0-
clause +0- after ten ears from the date of first registration of such 7ehicle with a motor 7ehicle
registration authorit in Pa!istan/
+3- passenger transport 7ehicles pling for hire with registered seating capacit of-
+a- four or more persons 0ut $went fi7e rupees per seat per annum/
less than ten persons/
+0- ten or more persons 0ut Sixt rupees per seat per annum/
'
Paragraphs %%A J %%% omitted 0 %/ "/ 3@@'/
152
less than twent persons;
and
+c- twent persons or more/ "ne hundred rupees per seat per annum9

+4- "ther pri7ate motor cars with engine capacit exceeding#-
+a- '@@@ ,, upto '3@@ ,, %i7e hundred rupees per annum
+0- '3@@ ,, upto '3(( ,, Se7en hundred and fift rupees per annum

+c- '4@@ ,, to ';(( ,, %ifteen hundred rupees per annum;
+d- '<@@ ,, to '((( ,, $wo thousand rupees per annum;
+e- 3@@@ ,, and a0o7e $hree thousand rupees per annum/
Pro7ided that collection of tax in respect of a pri7ate motor car first registered for more than fi7e
ears 0ut less than ten ears ending on or 0efore the first da of &ul# '((3# shall 0e made at one-half of
the rates specified in this su0-paragraph1
Pro7ided further that no collection of tax shall 0e made if a pri7ate motor car was first registered
for more than ten ears ending on or 0efore the first da of &ul# '((3/
8EE/ Rate of deduction of income $en per cent of such amount/9
tax under su0-section +<A-
of section ;@/

'
8 9
8H/ Rates of collection of income tax under su0-section +)A- of section ;@#-
+i- Sale of propert consisting %i7e percent of the sale price/
of lease of right to collect
octroi duties# tolls fee or
other le7ies# 0 whate7er
name called/
+ii- 2n others cases $hree percent of the sale price/

8HH/ Rate for collection of income 8Se7en and one half9per cent of such
tax under su0-section +)A- of amount9
section ;@/

'
Paragraph EEE omitted 0 %/"/ 3@@'/ Earlier ins/ 0 %/ A/ '((;/
153
'
8 9
8HHHH/ Rate of deduction or collec- 8$en9 per cent of such amount/9
tion of income tax under su0-section
+),- of section ;@/
8&/ Rate of deduction of income of tax $en per cent of such amount/9
under su0-section +)D- of section ;@/
;@/
3
8Q/ Rate of collection of income tax under su0-section +)E- of section ;@#-

4
8+a- in the case commercial consumer if the electricit 0ill W
+i- does not exceed Rs/:@@ Rs/<@
+ii- exceeds Rs/:@@ 0ut does not
exceed Rs/<@@
Rs/=@
+iii- exceeds Rs/<@@ 0ut does not
exceed Rs/=@@
Rs/ '@@
+i7- exceeds Rs/=@@ 0ut does not
exceed Rs/'@@@
Rs/ '<@
+7- exceeds Rs/'@@@ 0ut does not
exceed Rs/';@@
Rs/ 4@@
+7i- exceeds Rs/';@@ 0ut does not
exceed Rs/4@@@
Rs/ :;@
+7ii- exceeds Rs/4@@@ 0ut does not
exceed Rs/:;@@
Rs/ <@@
+7iii- exceeds Rs/:;@@ 0ut does not
exceed Rs/<@@@
Rs/ );@
+ix- exceeds Rs/<@@@/ Rs/ '@@@;
+0- in the case of an industrial consumer if the electricit 0ill-

:
8i- does not exceed Rs/;@@; Rs/4@
ii- exceeds Rs/;@@ 0ut does not exceed Rs/);@; Rs/:@T
iii- exceeds Rs/);@ 0ut does not exceed Rs/'@@@; Rs/;@
i7- exceeds Rs/'@@@ 0ut does not exceed Rs/';@@; Rs/=@
7- exceeds Rs/;@@ 0ut does not exceed Rs/3@@@; Rs/'3@
7i- exceeds Rs/3@@@ 0ut does not exceed Rs/4@@@; Rs/'=@
7ii- exceeds Rs/4@@@ 0ut does not exceed Rs/:@@@; Rs/3:@
'
Paragraph HHH omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A/ '((4/
3
Paragraph Q ins/ 0 %/A/'((3
4
Su0-para +a- su0s/ 0 %/A/'((</
:
Su0s/ 0 %/A/'((4/
154
7iii- exceeds Rs/:@@@ 0ut does not exceed Rs/;@@@; Rs/4@@
ix- exceeds Rs/;@@@/ Rs/4<@9
8* Rates of collection of income tax under su0-section +)%- of section ;@--
+a- 2n the case of telephone su0scri0er where the monthl 0ill ---
+i- exceeds Rs/ '#@@@ 0ut does not exceed Rs/3#@@@/ %ift rupees/
+ii- exceeds Rs/ 3#@@@ 0ut does not Rs/4#@@@ "ne hundred rupees
+iii- exceeds Rs/ 4/@@@ 0ut dose not exceed Rs/;#@@@ $wo hundred rupees
+i7- exceeds Rs/ ;#@@@ $hree hundred rupees
+0- 2n the case of mo0ile telephone su0scri0ers if the monthl 0ill or the issue of sale price of prepaid
telephone card ---
+i- does not exceed Rs/3@@@/ "ne hundred twent fi7e rupees
+ii- exceeds Rs/3@@@ 0ut does $wo hundred fift rupees;
not exceed Rs/ ;#@@@/
+iii- exceeds Rs/;/@@@ %our hundred rupees/9
'
8 9
N/ $he rate of collection of income tax $en per cent of the amount of
under su0-section +)H- of section ;@ commission or discount/9
PART II
RA$ES "% SMPER $AD
8 9
A/ 2n the case of e7er local '3/; per cent of the income/
authorit# on the whole of the
total income/
8,/ 2n the case of e7er registered firm# -

+'- Where the total income does not Nil/
exceed Rs/4@#@@@/
+3- Where the total income exceeds ; per cent of the amount
Rs/4@#@@@ 0ut does not exceed exceeding Rs/4@#@@@/
Rs/=@#@@@/
'
Paragraph . omitted 0 %/ "/ 3@@'/
155
+4- Where the total income exceeds Rs/3#;@@ plus '@ per cent of the
Rs/=@#@@@ 0ut does not exceed amount exceeding Rs/=@#@@@/
Rs/'4@#@@@/
+:- Where the total income exceeds Rs/)#;@@ plus '; per cent of the
Rs/'4@#@@@ 0ut does not exceed amount exceeding Rs/'4@#@@@
Rs/'=@#@@@//
+;- Where the total income exceeds Rs/';#@@@ plus 3; per cent of the
Rs/'=@#@@@/ amount exceeding Rs/'=@#@@@/


6Explanation/- %or the remo7al of dou0t# it is here0 declared that the term 6total income6 referred to in
this paragraph does not include income to which section =@, 8or section =@,,9 applies/9
8 9
8E/ Rate of super tax for purposes of deduction under su0-section +4- of section ;@#-
+ii- in cases other than companies $he rate applica0le to a resident person# not
0eing a compan on the sum charge a0le/

7PART III
RA$ES "% SMR,HAREE
'
8 9
A/ 2n respect of the income ear rele7ant to the assessment ear commencing on or after the first da of
&ul# '((@#-
3
8 9
+c- where the total income of an person +not 0eing a person whose total income consists of# or
includes# an income chargea0le under the head KSalarG and such income constitutes more
than fift per cent of the total income- does not exceed one hundred thousand rupees and
the return of total income 5ualifies for acceptance under a scheme of self assessment made
under su0-section +'- of section ;( for that ear# the amount of surcharge paa0le shall 0e
three hundred rupees819
4
8Pro7ided that no surcharge under this su0-paragraph shall 0e paa0le for the
assessment ear commencing on# or after# the first da of &ul# 3@@3/9
'
Paragraph A omitted 0 %/S/+Amend- Act# '(()
3
Su0-paragraphs +a- J +0- omitted i0id/
4
Pro7iso ins/ 0 %/"/ 3@@'/
156
3
8+d- an indi7idual# unregistered firm# association of persons and Hindu undi7ided famil shall
pa surcharge # in addition to the amount specified in su0-paragraph +c- e5ual to ten per
cent of the amount of income tax paa0le# not 0eing the amount of presumpti7e income tax
paa0le under section =@A# =@, or =@,,S1 T9
4
8Pro7ided that no surcharge shall 0e paa0le 0 an assessee for an assessment
ear 0eginning on or after the first da of &ul# '(((# where his total income consists of# or
includes# an income chargea0le under the head 6salar6 and such income constitutes more
than fift per cent of his total income/9
:
8Pro7ided further that no surcharge under this su0-paragraph shall 0e paa0le for the
assessment ear commencing on# or after# the first da of &ul# 3@@3/9
;
8,/ 2n respect of the income ear rele7ant to the assessment ear commencing on or after the first da of
&ul# 3@@@# a compan# not 0eing a 0an!ing compan# shall pa surcharge e5ual to fi7e per cent of the
amount of income tax paa0le excluding the amount of presumpti7e income tax paa0le under section
<
S=@AA# =@, =@,, or =@,DT/9
8Pro7ided that no surcharge under this su0-paragraph shall 0e paa0le for the assessment ear
commencing on or after the first da of &ul# 3@@3/9
)
PART IB
A/ Notwithstanding anthing contained in this Schedule 8 9-
+'- where the assessee is a co-operati7e societ# the tax shall 0e paa0le at the rates specified in paragraph
A of Part 2# or 8paragraph A of Part B of this Schedule rele7ant to the rates of pu0lic companies9#
whiche7er treatment is more 0eneficial to the assessee;
8+3- $ax re0ate at the rate of fi7e per cent shall 0e allowed in the case of a person other than a compan
who-
+i- deri7es income chargea0le under the head 62ncome from 0usiness or profession6; and
+ii- issues to the customers# for each transaction of sale or receipt# a cash memo with his name#
or the name of his 0usiness and address# National $ax Num0er and serial num0er of the
memo printed thereon/9
8+3A- where an assessee#-
+a- 0eing a compan registered under the ,ompanies Act#'('4 +B22 of '('4-# and ha7ing its
registered office in Pa!istan# repatriates to Pa!istan an income chargea0le to tax under the
3
Su0-paragraph +d- ins/ 0 %/A/'((=/
4
Pro7iso ins/ 0 %/A/'(((/
:
Pro7iso ins/ 0 %/ "/ 3@@'/
;
Paragraph , ins/ 0 %/ "/ 3@@@/
<
Su0s/ for certain words etc/ 0 %/ "/ 3@@'/
)
Pro7iso ins/ 0 %/ "/ 3@@'/
157
head K2ncome from 0usiness or professionG in an income ear which has 0een deri7ed 0 it
from a construction wor! executed 0 it outside Pa!istan# no super tax shall 0e paa0le 0
it on such income;
+0- not 0eing a compan# who is resident in Pa!istan# repatriates in an income ear an income
earned a0road 0 wa of fees for an technical or consultanc ser7ice rendered outside
Pa!istan# he shall 0e entitled to a re0ate e5ual to thirt per cent of income-tax or super-tax
paa0le on the income so repatriated1
Pro7ided that-
+i- such income is recei7ed in Pa!istan in accordance with the law for the time 0eing in
force for regulating paments and dealings in foreign exchange; and
+ii- where the assessee is a registered firm# super-tax paa0le 0 it shall 0e reduced 0
an amount calculated on the 0asis of the income tax paa0le on its total income if it
were the total income of an un-registered firm as does not exceed the said super
tax;9
8+3A- no super tax shall 0e paa0le 0 a registered firm in respect of the income# profits and gains deri7ed
0 it from the exercise of a profession if such income# profits and gains depend wholl or mainl on the
professional 5ualifications of its partners who are pre7ented 0 an law for the time 0eing in force or 0
con7ention or rules or regulations of the professional association# societ or similar 0od of which the
are mem0ers to constitute themsel7es into a corporate 0od with a limited lia0ilit which can 0e registered
as a compan under the ,ompanies Act# '('4 +B22 of '('4-# unless such profession consists wholl or
mainl in the ma!ing of contracts on 0ehalf of other persons or the gi7ing to other persons of ad7ice of a
commercial nature in connection with the ma!ing of contracts;9
8+3,- Where the total income of an assessee includes an profits and gains deri7ed from import of goods
or wholesale 0usiness the tax paa0le 0 him 8in respect of such import or wholesale9 shall 0e reduced 0
an amount e5ual to fi7e per cent of the said tax# if he furnishes complete details of sales indicating the
amount of sales and the names8# National $ax Num0er9 and full addresses of the purchasers/
+3D- Where an assessee# 0eing an indi7idual and resident in Pa!istan# incurs an personal expenditure on
legal 8 9 ser7ices and furnishes alongwith his return of total income the receipts 0earing names8#National
$ax Num0er9 and complete addresses of the 8 9 legal practitioners# a re0ate in tax computed at the a7erage
rate of tax shall 0e allowed to him on the total amount of such receipts/
8+3E- Where an assessee# incurs an expenditure on education of his dependent children# the tax paa0le
0 him shall 0e reduced 0 fi7e per cent of such expenditure# su0Cect to the conditions that1-
+i- the educational expense does not exceed Rs/4@#@@@ per annum per child; and
+ii- the receipt of such expense 0ears National $ax Num0er of the educational institution/9
+4- where a person# not 0eing a compan# is not resident in Pa!istan# the tax# including super tax paa0le
0 him or on his 0ehalf on his total income shall 0e an amount e5ual to-
158
+a- the income-tax which would 0e paa0le on his total income at the rate of 8twent9 per cent
or the income tax which would 0e paa0le on his total income if it were the total income of
the person resident in Pa!istan# whiche7er is the greater; plus
+0- the super-tax which would 0e paa0le on his total income if it were the total income of the
person resident in Pa!istan1
Pro7ided that an such person ma# on the first occasion su0se5uent to the thirt-first da of
.arch# '(;<# on which he is# under this "rdinance or the repealed Act# assessa0le for an ear 0 notice
in writing gi7en to the 8Deput ,ommissioner9 0efore the thirtieth da of Septem0er in the ear of
assessment declare +such declaration 0eing final and 0eing applica0le to all assessments thereafter- that
the tax# paa0le 0 him or on his 0ehalf on his total income shall 0e determined with reference to his total
world income# and thereupon such tax shall 0e an amount 0earing to the total amount of tax# which would
ha7e 0een paa0le on his total world income had it 0een his total income# the same proportion as his total
income 0ears to his total world income1
Pro7ided further that where an such person satisfied the 8Deput ,ommissioner9 that he was
pre7ented 0 sufficient cause from ma!ing such declaration on the first occasion on which he 0ecame
assessa0le and his failure to ma!e such declaration has not resulted in reducing his lia0ilit to tax for an
ear# the 8Deput ,ommissioner9# ma# with the pre7ious appro7al of the 2nspecting 8Additional
,ommissioner9# allow such person to ma!e the declaration at an time on or after the expir of the period
specified# and such declaration shall ha7e effect in relation to the assessment for the ear in which the
declaration is made +if such assessment has not 0een completed 0efore such declaration- and all
assessments thereafter/
8Explanation/- %or the remo7al of dou0t# it is here0 declared that the term 6total income6 referred
to in this su0-paragraph does not include income to which sections =@A# =@, and =@,, appl; and9
+:- where the total income of an assessee includes an income chargea0le under the head K,apital gainsG
+hereinafter referred to as the said income-# the tax including super tax paa0le 0 him on his total income
shall 0e-
+a- where the said income has arisen as a result of disposal 0 the assessee of his capital assets
after not more than twel7e months from the date of their ac5uisition 0 him-
income tax and super tax paa0le on the total income +including the said income-;
+0- where the said income consists of capital gains which ha7e arisen on account of the
disposal 0 the assessee of his capital assets after twel7e months from the date of their
ac5uisition 0 him-
+i- in the case of a compan or a firm registered under section <= +including a firm
treated as a registered firm under su0-clause +ii- of clause +0- of su0-section +'- of
section <(-
+'- income tax and super tax paa0le on the total income# as reduced 0 the said
income had such reduced income 0een the total income# plus
159
+3- income tax at the rate of twent fi7e per cent on the whole amount of the
said income;
+ii- in the case of other assessee income tax paa0le on-
+'- the total income# as reduced 0 the said income had such reduced income
0een the total income# plus
+3- the amount of the said income as reduced 0-
+i- an amount e5ual to sixt per cent of the amount of the said income#
or
+ii- fi7e thousand rupees# whiche7er is the greater1
Pro7ided that as respects the assessments for the ears ending on the thirtieth da of &une# '(=';
income tax and super tax shall# su0Cect to the other pro7isions of this "rdinance# 0e paa0le on the total
income as reduced 0 the said income/
A/ As used in this Schedule#-
+'- 6industrial underta!ing6 means an underta!ing which is set up or commenced in Pa!istan
on or after the ':th da of August# '(:)# and which emplos +i- ten or more persons in
Pa!istan and in7ol7es the use of electrical energ or an other form of energ which is
mechanicall transmitted and is not generated 0 human or animal agenc; or +ii- twent or
more persons in Pa!istan and does not in7ol7e the use of electrical energ or an other
form of energ which is mechanicall transmitted and is not generated 0 human or animal
agenc and which is-
+i- engaged in-
+a- the manufacture of goods or materials or the su0Cection on of goods or
materials to an process# which su0stantiall changes their original
condition;
+0- ship-0uilding;
+c- generation# transformation# con7ersion# transmission or distri0ution of
electrical energ# or the suppl of hdraulic power; or
+d- the wor!ing of an mine# oil-well or other source of mineral deposits not
0eing an underta!ing to which the %ifth Schedule applies; or
+ii- an other industrial underta!ing which ma 0e appro7ed 0 the ,entral Aoard of
Re7enue for the purposes of this clause;
8+3- 6pu0lic compan6 means-
+a- a compan in which not less than fift per cent of the shares are held 0 the Eo7ernment;
160
+0- a compan whose shares were the su0Cect of dealings in a registered stoc! exchange in
Pa!istan at an time during the income ear and remained listed on the stoc! exchange till
the close of that ear; or

+c- a trust formed 0 or under an law for the time 0eing in force;9
+4- 6registered firm6 means a firm registered under section <= or a firm treated as a registered firm under
su0-clause +ii- of clause +0- of su0-section +'- of section <(;
8 9
+;- 6total world income6 includes all income# profits and gains where7er accruing or arising except an
income which is not includi0le in the total income of an assessee/
8PART B
RATES OF INCOME TAX FOR COMPANIES
A/ Notwithstanding anthing contained in this Schedule# except Part 2B# in the case of a compan# not
0eing a modara0a# the rates of income tax on total income excluding such part of total income to which
paragraph D and E
'
8or %9 or sections
3
8=@AA# =@,# =@,, and =@,D9 appl# shall 0e as under1-
+'- in respect of the assessment ear commencing on the first da of &ul '((3#-
+a- in the case of a 0an!ing compan; << per cent

+0- in the case of a pu0lic compan :: per cent
other than a 0an!ing compan; and
+c- in the case of an other compan; ;; per cent
+3- in respect of the assessment ear commencing on or after the first da of &ul# '((4# as set out in the
ta0le 0elow1-
8$AA*E
-----------------------------------------------------------------------------------------------------
Assessment Aan!ing Pu0lic compan "ther
ear ,ompan other than a ,ompan
0an!ing compan
-------------------------------------------------------------------------------------------------------
'((4-(: <: per cent :3 per cent ;3 per cent
'((:-(; <3 per cent 4( per cent :( per cent
'((;-(< <@ per cent 4< per cent :< per cent
'((<-() <@ per cent 4< per cent :< per cent
'(()-(= ;= per cent 44 per cent :4 per cent
'

3
Pro7iso added 0 %/ "/ 3@@'/
161
'((=-(( ;= per cent 44 per cent :4 per cent
--------------------------------------------------------------------------------------------------------
'
8 9
3
8+4- in respect of the assessment ear commencing on or after first da of &ul# '((( and thereafter#-
+a- in the case of a 0an!ing compan; ;= per cent
+0- in the case of a pu0lic compan 44 per cent
other than a 0an!ing compan; and
+c- in the case of an other compan/ :4 per cent9
4
8+:- in respect of the assessment ear commencing on# or after# the first da of &ul# 3@@3#
+a- in case of a 0an!ing compan ;@V
+0- in case of a pu0lic compan other
than a 0an!ing compan 4;V
+c- in case of an other compan :;V/9
A/ 2n the case of a modara0a in respect of an assessment ear commencing on or after the first da of
&ul# '((4# the rate of income tax shall 0e 3; per cent of total income excluding such part of total income
to which paragraph D and E
:
8or section =@, or =@,,9 applies1
8Pro7ided that# for an assessment ear commencing on or after the first da of &ul# '((4# and ending on
or 0efore the thirtieth da of &une# '((;# this paragraph shall ha7e effect as if for the figure 63;6 the figure
6'3/;6 was su0stituted1
Pro7ided further that in case of the total income of a modara0a 0ecoming chargea0le to tax for the first
time in an assessment ear commencing on or after the first da of &ul# '((:# the rate of income tax in
the case of such modara0a for such assessment ear and the assessment ear next following shall 0e '3/;
per cent of total income/9
,/ No super tax
;
8 9shall 0e paa0le 0 a compan in respect of an assessment ear 0eginning on or after
the first da of &ul# '((3/
D/ $he rates of income tax in respect of the amount representing income from di7idends declared or
distri0uted 0 a Pa!istani compan or a modara0a shall 0e as under1-
+a- ; per cent of such amount
'
Su0-paragraph +3A- omitted 0 %/A/ '(((/
3
Su0-paragraph +4- su0s/ i0id/
4
Su0-paragraph +:- added 0 %/"/ 3@@'/
:
Words etc/ ins/i0id/
;
Words >and surcharge? omitted 0 %/ "/ 3@@' J shall 0e deemed to ha7e 0een so omitted since &ul '# 3@@@/
162
+0- where such di7idends are
recei7ed 0 a 0od corporate
referred to in
su0-clause +c- of clause+'<- of
section 3 or a foreign association
declared to 0e a compan under
su0-clause +e- of clause +'<- of
section 3/
'; per cent of such amount/
+c- in other cases/ 3@ per cent of such amount
8Pro7ided that rates of tax as specified in clause +0- and clause +c- shall 0e reduced to )/;V in case
of di7idends declared or distri0uted on shares of a compan set up for power generation
'
8 9 819
3
8Pro7ided further that notwithstanding anthing contained in this paragraph# the rate of tax in
respect of di7idend income recei7ed
4
8upto thirtieth &une# 3@@'9 0 a compan carring on insurance
0usiness shall 0e the same as specified in paragraph A/9
E/ $he rates of income tax on the amount representing the face 7alue of an 0onus shares or the amount of
an 0onus issued 0 the compan# with a 7iew to increasing its paid-up capital-
+a- Where a compan which issued '@ per cent of such
0onus shares or the 0onus is a amount/
pu0lic compan/
+0- in other cases/ '; per cent of such
amount/9
:
8%/ Rate of income tax on the $en per cent of such income9
amount deemed to 0e income
under su0-section +(A- of
section '3/
<
Words su0s/ 0 %/ "/ 3@@'/ Eaelier ins/ 0 %/ "/ 3@@@/
'
Words >and transmission line proCects? omitted 0 %/ "/ 3@@'/
3
Second pro7/ 2ns/ 0 %/A/'(((/
4
Words added 0 %/ "/ 3@@'/
:
Paragraph % ins/i0id/
163
7THE SECOND SCHEDALE
PART I
7EXEMPTIONS8 FROM TOTAL INCOME
2ncomes# or classes of income# or persons or classes of persons# enumerated 0elow# shall 0e exempt from
tax# su0Cect to the conditions and to the extent specified hereunder1-
Agricultural income
+'- Agricultural 2ncome1
8Pro7ided that# in case an assessee has# in an income ear# an income +other than the agricultural
income- which is chargea0le to tax +hereinafter called 6chargea0le income6-# the agricultural income shall
0e included in the total income# so howe7er that the tax paa0le on the chargea0le income shall 0e an
amount which 0ears the same proportion to the chargea0le income as the tax on total income 0ears to the
total income1
Pro7ided further that nothing contained in the first pro7iso shall appl in the case of an indi7idual# not
0eing a director of a compan# whose chargea0le income does not consist of# or include# income
chargea0le under the head Fincome from 0usiness or professionG/9
Salar income
+3- An income chargea0le under the head 6Salar6 deri7ed 0 an emploee of a foreign Eo7ernment
+including a consular or other officer or a non-diplomatic representati7e- as remuneration for ser7ices to
such Eo7ernment# if-
+a- such emploee is a citiHen of the foreign countr and not a citiHen of Pa!istan; and
+0- the ser7ices performed 0 him are of a character similar to those performed 0 emploees
of the Eo7ernment of Pa!istan in foreign countries; and
+c- the foreign Eo7ernment grants a similar exemption to emploees of the Eo7ernment of
Pa!istan performing similar ser7ices in such foreign countr/
8 9
8 9
$he Expatriate Emploees of the 2nternational 2rrigation .anagement 2nstitute +22.2-# Pa!istan1
8 9
8 9
164
8+)A- An income chargea0le under the head 6Salar6 recei7ed 0# or due to# an person 0eing an
emploee of the 2nternational 2rrigation .anagement 2nstitute +22.2- in Pa!istan# who is neither a citiHen
of Pa!istan nor was resident in Pa!istan in an of the four ears immediatel preceding the ear in which
he arri7ed in Pa!istan/9
8+),- An income chargea0le under the head 6Salar6 recei7ed 0# or due to# an person +who is neither a
citiHen of Pa!istan nor was resident in Pa!istan in an of the four ears immediatel preceding the ear in
which he arri7ed in Pa!istan- for the period ending the thirtieth da of &une# '((( from the date of his
arri7al in Pa!istan# as remuneration for ser7ices rendered 0 him during such period as an expert under a
contract of ser7ice appro7ed 0 the ,ommissioner of 2ncome $ax for the purposes of this clause#
emploed 0 the Agha Qhan Hospital and .edical ,ollege %oundation# Qarachi1
Pro7ided that the total num0er of expatriate emploees enCoing exemption under this clause shall not
exceed se7enteen in num0er/
Explanation/- %or the purpose of this clause# the expression 6expert6 means a professionall 5ualified
person who possesses specialised !nowledge in the fields of medicine# surger# including general
medicine patholog# pharmac# o0stetrics# paediatrics# nursing intensi7e care# central sterile suppl#
consulting clinic# medical record# healthU hospital administration# communit health sciences and all
0ranches of 0asic health sciences# including 0io-chemistr# cellular 0iolog# anatom# phsiolog#
pschiatr# micro0iolog# pharmacolog# anaesthesiolog# radiolog and allied fields of health# hospital
management or administration# or in other 0ranches of higher learning in aforesaid educational fields#
teacher training and educational research and whose emploment in Pa!istan# irrespecti7e of his
designation or capacit in which he is emploed to impart such specialised !nowledge and experience/9
8+)D-
8+)E-
'
8+)%- An income chargea0le under the head salar recei7ed 0 a Pa!istani seafarer wor!ing on a foreign
7essel pro7ided that such income is remitted to Pa!istan# not later than two months of the rele7ant income
ear# through normal 0an!ing channels/?;
8 9
+(- An allowance or per5uisite paid or allowed as such outside Pa!istan 0 the Eo7ernment to a citiHen
of Pa!istan for rendering ser7ice outside Pa!istan/
8 9
8 9
+'3- An income chargea0le under the head 6Salar6 of persons# not 0eing citiHens of Pa!istan or persons
resident in Pa!istan# who are stationed in Pa!istan in accordance with the terms of an Aid Agreement
entered into 0 the Eo7ernment of Pa!istan with the Eo7ernment of the countr to which such persons
0elong or with an international agenc and whose salar is paid 0 such Eo7ernment or agenc out of
funds or grants released as aid to Pa!istan in pursuance of such Agreement/
'
,l/+)%- ins/ 0 %/ "/ 3@@'/
165
8+'3A- An income of a person who# not 0eing a citiHen of Pa!istan
'
8 9# is engaged as a contractor#
consultant or expert on a proCect in Pa!istan financed out of grant funds in accordance with the terms of a
0ilateral or multilateral technical assistance agreement entered into 0 the Eo7ernment of Pa!istan with
an foreign go7ernment# international donor agenc or 0an! or other aid-gi7ing organisation and deri7es
such income out of the funds of the grant in pursuance of such agreement1

3
8 9
+'4- An salar recei7ed 0 a person# not 0eing a citiHen of Pa!istan# 0 7irtue of his emploment with the
Aritish ,ouncil/
8 9
+'<- An pension recei7ed 0 a person# 0eing a citiHen of Pa!istan# 0 7irtue of his former emploment#
with the appro7al of the %ederal Eo7ernment# in the Mnited Nations or its specialised agencies +including
the 2nternational ,ourt of Custice-1
Pro7ided that this clause shall not appl if the emoluments drawn 0 an such person during the course of
such emploment were not exempt from tax paa0le under this "rdinance or the repealed Act/
+')- An pension due to# or recei7ed 0# an assessee 0eing a citiHen of Pa!istan o7er sixt ears of age1
8Pro7ided that# with effect from an assessment ear commencing on or after the first da of &ul# '((3#
this clause shall ha7e effect as if the words 6o7er sixt ears of age6 were omitted# so howe7er that
exemption under this clause shall appl in respect of pension from one emploer onl1
Pro7ided further that exemption under this clause shall not appl in respect of a retired person who wor!s
for the same emploer in an capacit for an remuneration or reward/9
8+')A-An pension due to# or recei7ed 0# an assessee in respect of an ser7ice rendered as a mem0er of
the Armed %orces of Pa!istan or as an emploee of the %ederal Eo7ernment or a Pro7incial Eo7ernment/
8*ea7e encashment on retirement/-
+')AA- An sum representing encashment of lea7e preparator to retirement of a mem0er of the Armed
%orces of Pa!istan or an emploee of the %ederal Eo7ernment or a Pro7incial Eo7ernment/9
+'=- An pension granted to an pu0lic ser7ant to whom clause +:=- does not appl in respect of inCuries
recei7ed in the performance of this duties/
+'(- An pension granted to an pu0lic ser7ant to whom clause +:(- does not appl who has 0een
in7alided from ser7ice on account of an 0odil disa0ilit/
8 9
'
Words >or a person resident in Pa!istan? omitted 0 SR"34+2-U(=# dated '<-'-'((=/
3
Pro7iso omitted i0id/
166
+33- An income recei7ed 0 an assessee from an annuit issued under the Pa!istan Postal Annuit
,ertificate Scheme on or after the 3)th &ul# '())1
Pro7ided that nothing in this clause shall appl to so much of the income recei7ed 0 an assessee from an
annuit or annuities issued after the 'st .a# '(=@# as exceeds se7en thousand and two hundred rupees per
annum8# and in respect of an assessment ear commencing on or after the first da of &ul# '(=<# as
exceeds ten thousand rupees per annum/9
8+33A- An income recei7ed 0 an assessee from an annuit or annuities issued 0 the State *ife
2nsurance ,orporation of Pa!istan 8or a life insurance compan registered under section 4 of the 2nsurance
Act# '(4=91
Pro7ided that this clause shall not appl to so much of the income recei7ed 0 an assessee from an annuit
or annuities which# together with the income from an annuit or annuities referred to in clause +33-#
exceeds ten thousand rupees per annum/
+34- An pament from a pro7ident fund to which the Pro7ident %unds Act# '(3; +D2D of '(3;- applies/
8Aene7olent grant
+34A-An 0ene7olent grant paid from the Aene7olent %und to the emploees or mem0ers of their families
in accordance with the pro7isions of the ,entral Emploees Aene7olent %und and Eroup 2nsurance Act#
'(<(/9
+3:- $he accumulated 0alance due and 0ecoming paa0le to an emploee participating in a recognised
pro7ident fund/
+3;- An pament from an appro7ed superannuation fund made on the death of a 0eneficiar or in lieu of
or in commutation of an annuit or 0 wa of refund of contri0ution on the death of a 0eneficiar/
+3<- An pament in the nature of commutation of pension recei7ed from Eo7ernment or under an
pension scheme appro7ed 0 the ,entral Aoard of Re7enue for the purpose of this clause/
+3)- An income representing an pament recei7ed 0 wa of gratuit or commutation of pension 0 an
emploee on his retirement or# in the e7ent of his death 0 his heirs as does not exceed-
+i- in the case of an emploee of the Eo7ernment or a local authorit or a statutor 0od or
corporation esta0lished 0 an law for the time 0eing in force# the amount recei7a0le in
accordance with the rules and conditions of his ser7ice;
+ii- an amount recei7a0le from an gratuit fund appro7ed 0 the ,ommissioner of 2ncome
$ax in accordance with the rules contained in Part 222 of the Sixth Schedule;
+iii- in the case of an other emploee# the amount not exceeding 8two hundred9 thousand
rupees recei7a0le under an scheme applica0le to all emploees of the emploer and
appro7ed 0 the ,entral Aoard of Re7enue for the purposes of this su0-clause; and
+i7- in the case of an emploee to whom su0-clauses +i-# +ii- and +iii- do not appl# fift per
cent of the amount recei7a0le or 8se7ent-fi7e thousand9 rupees# whiche7er is the less1
167
Pro7ided that nothing in this su0-clause shall appl-
+a- to an pament which is not recei7ed in Pa!istan;
+0- to an pament recei7ed form a compan 0 a director of such compan who is not
regular emploee of such compan;
+c- to an pament recei7ed 0 an emploee who is not a resident f Pa!istan; and
+d- to an gratuit recei7ed 0 an emploee who has alread recei7ed an gratuit from
the same or an other emploer/
+3=- An income of a person representing the sums recei7ed 0 him as a wor!er from out of the Wor!s
Participation %und esta0lished under the ,ompanies Profits +Wor!ers Participation- Act# '(<= +D22 of
'(<=-/
+3(- An income of an officer representing the sum recei7ed 0 him as Entertainment Allowance
admissi0le to him under the .inistr of %inance and Pro7incial ,oordination +%inance Di7ision- "ffice
.emorandum No/%/3+3--2mp-2U))# dated the 3(th April '())/
8+3(A- An income of an officer representing the sum recei7ed 0 him as Entertainment Allowance
admissi0le to him under the .inistr of %inance +%inance Di7ision- "ffice .emorandum No/%/'+'--
2mpU=4# dated the '=th August# '(=4/
+4@- An income of an officer of the Pa!istan Armed %orces representing the sum recei7ed as
Entertainment Allowance admissi0le to him under the .inistr of Defence "ffice .emorandum No/
)'<+D-U+A-U))# dated the 3(th April# '())/
+4'- An income of an officer representing the sum recei7ed 0 him as Entertainment Allowance
admissi0le to him under the ,a0inet Secretariat +Esta0lishment Di7ision- "ffice .emorandum
No/'=U3U)=-,B# dated the '4th &ul# '()=/
+43- An income of an officer representing the sum recei7ed 0 him as Senior Post Allowance admissi0le
to him under the .inistr of %inance# Planning and De7elopment +%inance Di7ision- "ffice .emorandum
No/%'+4<- EaH-2.P-2U)4# dated the '=th August '()4/
+44- An income of an officer representing the sum recei7ed 0 him as Senior Post Allowance admissi0le
to him under the .inistr of %inance and Pro7incial ,oordination +%inance Di7ision- "ffice
.emorandum No/%'+'-2.P-'U))# dated the 3=th April# '())/
8+44A- An income of an officer representing the sum recei7ed 0 him as "rderl Allowance admissi0le
to him under the %inance Di7ision "/./No/%/'+4--2.P-22U=;# dated the 3:th "cto0er# '(=;/9
8+44A- An income of an emploee of a recognised Mni7ersit in Pa!istan representing the sums recei7ed
0 him as Senior Post Allowance# Entertainment Allowance or "rderl Allowance admissi0le under the
terms and conditions of his ser7ice/
8 9
168
+4)- An income representing compensator allowance paa0le to a citiHen of Pa!istan locall recruited in
Pa!istan .ission a0road as does not exceed 8);9 per cent of his gross salar/
+4=- An income of an officer representing the sum recei7ed 0 him as Personal Staff Su0sid admissi0le
to him under the ,a0inet Secretariat +Esta0lishment Di7ision- "ffice .emorandum No/ '=U3U)=-,B#
dated the '4th &ul# '()=/
8,ost of li7ing allowance
+4=A- An income representing cost of li7ing allowance admissi0le to the Eo7ernment emploees at the
rate of )V with effect from the first da of &ul# '((;/9
Special allowance to meet certain expenses1
+4(- An special allowance or 0enefit +not 0eing entertainment or con7eance allowance or other
per5uisite within the meaning of su0-section +3- of section '< speciall granted to meet expenses wholl
and necessaril incurred in the performance of the duties of an office or emploment of profit/
8+4(A- An income of a newspaper emploee representing *ocal $ra7elling Allowance paid in
accordance with the decision of the $hird Wage Aoard for Newspaper Emploees constituted under the
Newspaper Emploees +,onditions of Ser7ice- Act# '()4# pu0lished in Part 22 of the EaHette of Pa!istan#
Extraordinar# dated the 3=th &une# '(=@/
8+4(A- An amount recei7ed as fling allowance 0 pilots # fight engineers and emploed 0 an Pa!istani
airline
'
8or 0 ,i7il A7iation Authorit/9
+:@- An allowance attached to an Honour# Award or .edal awarded 0 the President of Pa!istan and
an monetar award granted 0 the President of Pa!istan/
8+:'- Distur0ance pa of the armed forces personnel for the assessment ear '(()-(=/ 9
+:3- Such portion of the income of a mem0er of Pa!istan Armed %orces as is compulsoril paa0le 0 him
under an orders issued 0 Eo7ernment to mess# entertainment or 0and fund/
8+:3A- An amount notified as fling allowance paa0le to pilots# flight engineers and na7igators of the
Pa!istan Air %orce/9
8+:3A-An amount notified as fling allowance paa0le to pilots# flight engineers and na7igators of the
Pa!istan Arm and the Pa!istan Na7/
+:3,-An amount notified as su0marine allowance paa0le to officers of the Pa!istan Na7/
8+:3D- an amount recei7ed as fling allowance 0 &unior commissioned officers or other ran!s of
Pa!istan Armed %orces;9
'
Words ins/ 0 %/ "/ 3@@'/
169
Free rations:
+:4- $he 7alue of rations issued in !ind# or cash allowance paid in lieu thereof# to mem0ers of Pa!istan
Armed %orces or of $erritorial %orces/
Rent-free quarters:
+::- $he 7alue of rent-free 5uarters occupied 0# or cash allowance paid in lieu thereof# to mem0ers of the
Pa!istan Armed %orces# including $erritorial %orce/
Conservancy allowance:
+:;- $he conser7anc allowance granted in lieu of free conser7anc to personnel 0elow commissioned
ran! of Pa!istan Armed %orces and $erritorial %orce/
Deferred pay:
+:<- Deferred pa admissi0le to Armed %orces personnel under the new Pa ,ode/
alary of !"asadars# etc.:
+:)- An income chargea0le under the head 6Salar6 paid 0 Eo7ernment to Qhasadars# le7ies and
Aadraggas emploed in the tri0al territor on the North West %rontier and of all persons emploed in the
tri0al le7 ser7ices in Aaluchistan/
$ensions for in%uries# etc.
+:=- An pension granted to the personnel of Armed %orces of Pa!istan +including personnel of the
$erritorial %orce and the National Ser7ice of Pa!istan- in respect of inCuries recei7ed in the performance
of their duties as such/
&nvalid pensions:
+:(- An pension granted to the personnel of the Armed %orces of Pa!istan +including personnel of the
$erritorial %orce and the National Ser7ice of Pa!istan- in7alided from ser7ice with such %orces on account
of 0odil disa0ilit attri0uta0le to# or aggra7ated 0# such ser7ice/
$ensions to dependants of "a"eeds:
+;@- An income deri7ed 0 the families and dependents of the 6Shaheeds6 0elonging to Pa!istan Armed
%orces from the special famil pension# dependents pension or childrenGs allowance granted under the
pro7isions of the &oint Ser7ices 2nstruction No/;U<</
+;'- An income deri7ed 0 the families and dependents of the 6Shaheeds6 0elonging to the ,i7il Armed
%orces of Pa!istan to whom the pro7isions of the &oint Ser7ices 2nstruction No/;U<< would ha7e applied
had the 0elonged to the Pa!istan Armed %orces from an li!e pament made to them/
[$ension of dependents of public servants:
170
+;'A- An pension granted under the rele7ant rules to the families and dependents of pu0lic ser7ants or
mem0ers of the Armed %orces of Pa!istan who die during ser7ice/9
$erquisites to $resident# $rovincial 'overnors# etc.:
+;3- $he per5uisite represented 0 the right of the President of Pa!istan# the Pro7incial Eo7ernors and the
,hiefs of Staff# Pa!istan Armed %orces to occup free of rent as a place of residence an premises
pro7ided 0 the Eo7ernment/
+;4- $he per5uisite represented 0 free con7eance pro7ided and the sumptuar +entertainment- allowance
granted 0 Eo7ernment to Pro7incial Eo7ernors# the ,hiefs of Staff# Pa!istan Armed %orces and the
,orps ,ommanders/
+;:- $he following per5uisites and allowances pro7ided or granted 0 Eo7ernment to the .inisters of the
%ederal Eo7ernment# namel1-
+a- rent-free accommodation in so far as the 7alue thereof exceeds ten per cent of the 0asic
salar of the .inisters concerned;
+0- house-rent allowance paid 0 Eo7ernment in lieu of rent-free accommodation in so far as it
exceeds fi7e hundred and fift rupees per mensem;
+c- free con7eance; and
+d- sumptuar allowance/
8Free provision of utilities:
+;:A- An sum paid# for purpose of meeting the charges for gas# water and electricit# to-
+a- the %ederal and Pro7incial .inisters; and
+0- an emploee upto ten percent of the minimum of time scale# and where there is no time
scale# upto ten per cent of the 0asic salar/
+;:A- $he 7alue of gas# water and electricit pro7ided free of charge to-
+a- the %ederal and Pro7incial .inisters; and
+0- an emploee upto ten percent of the minimum of time scale# and where there is no time
scale# upto ten per cent of the 0asic salar/9
+;;- $he per5uisite represented 0 the right of a &udge of the Supreme ,ourt of Pa!istan or of a &udge of a
High ,ourt to occup free of rent as a place of residence an premises pro7ided 0 the %ederal or the
Pro7incial Eo7ernment# as the case ma 0e# or in case no such residence is pro7ided# or a &udge chooses
to reside in his own house# so much of income which represents the sum paid to him as house rent
allowance# 0ut not exceeding se7en hundred and fift rupees per mensem/
171
8+;;A- $he following allowance and pri7ileges pro7ided to a &udge of a High ,ourt 7ide the $ransfer of
High ,ourt &udges +Allowances and Pri7ileges- "rder# '(=4 +P/"/No/ 3 of '(=4-# namel1-
+a- monthl allowances of one thousand and fi7e hundred rupees; and

+0- if the famil of a &udge does not Coin him at the place to which he is transferred or at which
he is posted# he shall 0e pro7ided at such place with-
+i- single rent free accommodation maintained 0 Eo7ernment; and
+ii- an official car maintained at Eo7ernment expense# including the suppl of petrol
not exceeding one hundred and fift litres per month for use in such car/9
8+;<-+'- An income from 7oluntar contri0utions# house propert and in7estments in securities of the
%ederal Eo7ernment deri7ed 0 the following# namel1-
+i- National 2n7estment +Mnit- $rust of Pa!istan esta0lished 0 the National 2n7estment
$rust *imited# if not less than ninet per cent of its Mnits at the end of that ear are
held 0 the pu0lic and not less than ninet per cent of its income of the ear is
distri0uted among the Mnit-holders;
+ii- an .utual %und appro7ed 0 the ,ontroller of ,apital 2ssues and set up 0 the
2n7estment ,orporation of Pa!istan# if not less than ninet per cent of its
,ertificates at the end of that ear are held 0 the pu0lic and not less than ninet per
cent of its income of that ear is distri0uted among the ,ertificate-holders;
'
8+iia- "7erseas Pa!istanis Pension $rust;9
+iii- Shau!at Qhanum .emorial $rust# *ahore; and
+i7- Shei!h Sultan $rust# Qarachi/
8+'A- An income deri7ed 0 an .utual %und8#in7estment compan# or a collecti7e in7estment
scheme appro7ed 0 the ,orporate *aw Authorit9 or the National 2n7estment +Mnit- $rust
of Pa!istan esta0lished 0 the National 2n7estment $rust *imited from an instrument of
redeema0le capital as defined in the ,ompanies "rdinance# '(=: +D*B22 of '(=:-# if not
less than ninet per cent of its income of that ear is distri0uted amongst the Mnit-holders/
+3- An income of the following funds and institutions# namel1-
+i- a pro7ident fund to which the Pro7ident %unds Act# '(3; +D2D of '(3;-# applies;
+ii- trustees on 0ehalf of a recognised pro7ident fund or an appro7ed superannuation
fund or an appro7ed gratuit fund;
3
8+iia- "7erseas Pa!istanis Pension $rust;9
'
2ns/ 0 SR";3(+2-U(=# dated (-<-'((=
3
2tem +iia- ins/ 0 S R" ;3( +'- U (=# dated (-<-'(==
172
+iii- a 0ene7olent fund or group insurance scheme appro7ed 0 the ,entral Aard of
Re7enue for the purposes of this su0-clause;
+i7- Ser7ice %und;
+7- Emploees "ld-Age Aenefits 2nstitution esta0lished under the Emploees "ld-Age
Aenefit Act# '()< +D2B of '()<-;
+7i- an Mnit# Station or Regimental 2nstitute; and
+7ii- an recognised Regimental $hrift and Sa7ings %und# the assets of which consist
solel of deposits made 0 mem0ers and profits earned 0 in7estment thereof/
Explanation/- %or the purpose of this su0-clause# 6Ser7ice %und6 means a fund
which is esta0lished under the authorit# or with the appro7al# of the %ederal
Eo7ernment for the purpose of-
+a- securing deferred annuities to the su0scri0ers or pament to them in the
e7ent of their lea7ing the ser7ice in which the are emploed; or
+0- ma!ing pro7ision for their wi7es or children after their death; or
+c- ma!ing pament to their estate or their nominees upon their death/9
8 9
8+<3-+'- An income of a trust 8or welfare institution9 specified 8in su0-clauses +3- and +4-9 from
donations# 7oluntar contri0utions# su0scriptions# house propert# in7estments in the securities of the
%ederal Eo7ernment and so much of the income chargea0le under the head 62ncome from 0usiness or
profession6 as is expended in Pa!istan for the purposes of carring out welfare acti7ities1
Pro7ided that in the case of income under the head 62ncome from 0usiness or profession6# the exemption
in respect of income under the said head shall not exceed an amount which 0ears to the income under the
said head the same proportion as the said amount 0ears to the aggregate of the incomes from the aforesaid
sources of income/
+3- A trust administered under a scheme appro7ed 0 the %ederal Eo7ernment in this 0ehalf and
esta0lished in Pa!istan exclusi7el for the purposes of carring out such acti7ities as are for the 0enefit
and welfare of-
+i- ex-ser7icemen and ser7ing personnel# including ci7ilian emploees of the Armed %orces#
and their dependents; or
+ii- ex-emploees and ser7ing personnel of the %ederal Eo7ernment or a Pro7incial
Eo7ernment and their dependents# where the said trust is administered 0 a committee
nominated 0 the %ederal Eo7ernment or# as the case ma 0e# a Pro7incial Eo7ernment/
S+4- A trust or welfare institution appro7ed 0 the ,entral Aoard of Re7enue for purposes of this su0-
clause/T9
173
8 9
8 9
8 9
8 9
&nterest inco(e:
'
8 9
'
8 9
3
8 9
+);- An interest paa0le to a non-resident in respect of such pri7ate loan to 0e utilised on such proCect in
Pa!istan as ma 0e appro7ed 0 the %ederal Eo7ernment for the purposes of this clause# ha7ing regard to
the rate of interest and the terms of re-pament of the loan and the nature of the proCect on which it is to 0e
utilised/
8+);A- An interest paa0le to a non-resident on a loan in foreign exchange against export letter of credit
which is used exclusi7el for export of goods manufactured or processed for exports in Pa!istan/9
+)<- An interest paa0le 0 an industrial underta!ing in Pa!istan-
+i- on mones 0orrowed 0 it under a loan agreement entered into with an such financial
institution in a foreign countr as ma 0e appro7ed in this 0ehalf 0 the %ederal
Eo7ernment 0 a general or special order; and
+ii- on mones 0orrowed or de0ts incurred 0 it in a foreign countr in respect of the purchase
outside Pa!istan of capital plant and machiner in an case where the loan or de0t is
appro7ed 0 the %ederal Eo7ernment# ha7ing regard to its terms generall and in particular
to the terms of its pament# from so much of the tax paa0le in respect thereof as exceeds
the tax or taxes on income paid on such interest in the foreign countr from which the loan
emanated or in which the de0t was incurred +hereinafter referred to as the Fsaid countrG-1
Pro7ided that# where the amount of such tax or taxes paid in the said countr exceeds the amount
of the tax paa0le in Pa!istan# no refund of the amount paid in excess shall 0e allowed1
Pro7ided further that# where the said countr exempts such would ha7e 0een paa0le in Pa!istan if
the said interest were lia0le to tax in Pa!istan# no tax shall 0e paa0le in Pa!istan in respect of such
interest/
+))- An income of an agenc of a foreign Eo7ernment# or other foreign national8# compan# firm or
association of persons9 appro7ed 0 the %ederal Eo7ernment for the purposes of this clause# from interest
paid on mones 0orrowed 0 the %ederal Eo7ernment or 0 an other person in Pa!istan under a loan
agreement appro7ed 0 the %ederal Eo7ernment/
8+))A- An interest paa0le to a non-resident 0eing a foreign indi7idual# compan# firm or association of
persons in respect of a foreign loan as is utilised for industrial in7estment in Pa!istan pro7ided that the
agreement for such loan is concluded on or after the %irst da of %e0ruar '(('# and is dut registered
with the State Aan! of Pa!istan/9
'
,ls/ +)3- J +)4- omitted 0 SR" '@'3+2-U((# dated (-4-'(((
3
,l/ +):- omitted 0 SR" ::)+2-U(4# dated '(-;-'((4 w/e/f/ 4@-;-'((4/ Existing 0eneficiaries protected/
174
8+))A- An profit deri7ed 0 a non-resident# 8+whether a citiHen of Pa!istan or otherwise-9 in respect of
the 2slamic mode of financing# including istisna# mora0aha# mushari!a8199
8Pro7ided that in the case of Hu0 Power ,ompan *imited# this clause shall appl to such 2slamic
modes of financing agreements which ha7e 0een concluded on or after the 4@th da of No7em0er# '((3/9
'
8+)),-$he ield of National Sa7ings or Deposit ,ertificate# including Defence Sa7ings ,ertificate# issued
under the National Sa7ing Schemes1
Pro7ided that exemption under this clause shall not appl in respect of an profit recei7ed on the
rein7estment of Qhaas Deposit ,ertificates made under the National Sa7ings Scheme on or after the tenth
da of No7em0er# '(('/
Pro7ided further that exemption under this clause shall not 0e a7aila0le in respect of 0earer
certificates +under whate7er nomenclature- purchased on or after the ';
th
&une# '((;819
3
8Pro7ided further that the exemption under this clause shall not appl in respect of profit recei7ed on
an in7estment made in the aforementioned deposit certificates on# or after# the first da of &ul# 3@@'/
+))D- An interest on deposits in the Post "ffice sa7ings Aan! or National Sa7ings ,enters under the
National Sa7ing Schemes/
Pro7ided that exemption under this clause shall not appl in respect of an profit recei7ed on the
rein7estment of Qhaas Deposit ,ertificates made under the National Sa7ings Scheme on or after the tenth
da of No7em0er# '(('9/
+))E- An income deri7ed 0 a person from his in7estment from .onthl 2ncome Sa7ings Account
Scheme of the Directorate of National Sa7ings pro7ided that the monthl instalment in an account does
not exceed Rs/'@@@/9
4
8Pro7ided that the exemption under this clause shall not appl in respect of in7estment in such
scheme made on# or after# the first da of &ul# 3@@'/9
+)=- An interest deri7ed from foreign currenc accounts held with the authorised 0an!s in Pa!istan# in
accordance with %oreign ,urrenc Accounts Scheme introduced 0 the State Aan! of Pa!istan# 0 citiHens
of Pa!istan and foreign nationals residing a0road# foreign associations of persons# companies registered
and operating a0road and foreign nationals residing in Pa!istan/
8+)=A- An interest Sor profitT deri7ed from a rupee account held with a scheduled 0an! in Pa!istan 0 a
citiHen of Pa!istan residing a0roadS# where the deposits in the said account are made exclusi7el from
foreign exchange remitted into the said accountT/9
8+)=A- An income deri7ed from a pri7ate foreign currenc account held with an authorised 0an! in
Pa!istan# in accordance with the %oreign ,urrenc Accounts Scheme introduced 0 the State Aan! of
Pa!istan# 0 a resident citiHen of Pa!istan/9
'
,ls/ +)),-# +))D- J +))E- ins/ 0 SR" '4:4+2-U((# dated '<-'3-'((( w/e/f/ 4-(-'(((/
3
$hird pro7iso added 0 %/ "/ 3@@'/
4
Pro7iso ins/ 0 %/ "/ 3@@'
175

'
8Pro7ided that the exemption under this clause shall not 0e a7aila0le in respect of an incremental
deposits made in the said accounts on or after the '<
th
da of Decem0er# '(((# or in respect of an
accounts opened under the said scheme on or after the said date9/
3
8+)=,- $he income of an indi7idual# a firm# an institution or a 0od corporate# other than a 0an! or a
financial institution# 0 wa of interest on %oreign ,urrenc Aearer ,ertificates issued under the $hree-
Lears %oreign ,urrenc Aearer ,ertificate Rules# '(()/9
4
8+)=D- An profit on Special M/ S /Dollar Aonds issued under the Special M/ S/ Dollar Aonds Rules#
'((=/
:
8Pro7ided that exemption under this clause shall not appl to profits on the said 0onds purchased
0 a resident person out of an incremental deposits made in the foreign currenc accounts on or after the
'<
th
da of Decem0er# '(((# or out of new accounts opened on or after the said date/

;
8+)=E- An profits or interest deri7ed from Pa! rupee account or certificates of deposit which ha7e 0een
created 0 con7ersion of a foreign currenc account or deposit held on the 3=th da of .a# '((=# with a
0an! authorised under the %oreign ,urrenc Accounts scheme of state 0an! of Pa!istan1
Pro7ided that nothing contained in this clause shall appl to such Pa! rupee account or certificates
which are created out of foreign currenc deposits which are not exempt under clause +)=-;9
+)(- An interest income recei7ed from a Pa!istani 0an! 0 a foreign 0an!# appro7ed 0 the %ederal
Eo7ernment for the purposes of this clause# for such period as ma 0e determined 0 the %ederal
Eo7ernment1
Pro7ided that-
+i- the interest income is earned on deposits comprising of remittances from a0road held in a
rupee account opened with a Pa!istani 0an! with the prior appro7al of the State Aan! of
Pa!istan;
+ii- the Pa!istani 0an! maintaining the said rupee account holds 3@ per cent or more of the
e5uit capital of the said foreign 0an! and the management of the latter 7ests in the
Pa!istani 0an!; and
+iii- the rate of interest chargea0le on the said deposits does not exceed the rate of interest
chargea0le on the deposits in the foreign currenc accounts allowed to 0e opened with
0an!s in Pa!istan 0 the State Aan! of Pa!istan/
8+)(A- An income deri7ed 0 an person# not 0eing a 0an!# a 0an!ing compan# a financial institution# a
de7elopment financing institution or a compan engaged in the 0usiness of insurance# 0 wa of return on
'
Pro7iso ins/ 0 SR" No/'4::# dated '<-'3-'(((/
3
,l/ +)=,- ins/ 0 SR" ''' +2- U(=# dated '(-3-'((=/
4
,ls/ +)=D- J +)=E- ins/ 0 SR" =)'+2-U(=# dated ;-=-'((=/
:
Pro7iso ins/ 0 SR" No/'4::# dated '<-'3-'(((/
;
,l/ +)=E- ins/ 0 SR" No/=)+2-U(=# dated ;-=-'((=
176
0earer 0onds issued 0 the Pa!istan Water and Power De7elopment Authorit# esta0lished under the
Pa!istan Water and Power De7elopment Authorit Act# '(;= +West Pa!istan Act No/+DDD2 of '(;=-S1T9
8Pro7ided that nothing contained in this clause shall appl in respect of return on 0onds issued on or after
the first da of &ul# '(('/9
8+)(A- An income deri7ed 0 an person# 0eing an indi7idual# 0 wa of return on 0earer or registered
0onds +Second issue# '(=(-# issued 0 the Pa!istan Water and Power De7elopment Authorit# esta0lished
under the Pa!istan Water and Power Authorit Act# '(;= +West Pa!istan Act# No/+DDD2 of '(;=-S1T9
8Pro7ided that nothing contained in this clause shall appl in respect of return on 0onds issued on or after
the first da of &ul# '(('/9
'
8+)(,- An income deri7ed 0 a non-resident from foreign in7estment in )th issue of Pa! rupee
denominated WAPDA Energ Aonds issued under the WAPDA Energ Aonds +)th 2ssue-Regulation
'(()/9
8+=@- An income deri7ed 0 a non-resident +excluding local 0ranches# su0sidiaries or offices of foreign
0an!s# companies# associations of persons or an other person operating in Pa!istan- from %ederal
Eo7ernment securities and redeema0le capital# as defined in the ,ompanies "rdinance# '(=:# +D*B22 of
'(=:- listed on a registered stoc! exchange# where the in7estments are made exclusi7el from foreign
exchange remitted into Pa!istan through a Special ,on7erti0le Rupee Account maintained with a 0an! in
Pa!istan/9
8 9
8 9
3
8+=@A- An income deri7ed 0 an indi7idual# unregistered firm# association of persons# Hindu undi7ided
famil or an artificial Curidical person# other than a compan# from rated and *isted $erm %inance
,ertificates "rdinance# '(=:# issued on or capital under the ,ompanies "rdinance# '(=:# issued on or
after the ':th da of Septem0er# '(()819
4
8Pro7ided that the exemption under this clause shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3/9
8 9
8 9
8 9
8 9
'
,l/ +)(,- ins/ 0 SR" :@<+2-U()# dated 4-;-'(()/
3
,l/ +=@A- su0s/ 0 SR"')'+2-U(=# dated ')-4-'((= / Earlier ins/ 0 )@4+'-U()# dated '4-(-'(()/
4
Pro7iso ins/ 0 %/"/ 3@@'/
177
8 9
8&nco(e of text-boo) boards1
+=;A- An income of a text-0oo! 0oard of a Pro7ince esta0lished under an law for the time 0eing in
force# accruing or arising from the date of its esta0lishment/9
&nco(e of universities and educational institutions:
+=<- An income of an uni7ersit or other educational institution esta0lished solel for educational
purposes and not for purposes of profit/
8+=<A-Profits and gains deri7ed 0 an assessee from the running of an educational institution set up
0etween the first da of &ul# '(('# and the thirtieth da of &une# '((;# 0oth das inclusi7e# for a period of
fi7e ears 0eginning with the month in which institution is set up/
'
8+=<A- Profits and gains deri7ed 0 an assessee from the running of an computer training institution or
computer training scheme#
3
8recogniHed 0 a Aoard of Education or a Mni7ersit or the Mni7ersit Erant
,ommission# as the case ma 0e9# set up 0etween the first da of &ul# '(()# and the thirtieth da of &une#
4
83@@;9# 0oth das inclusi7e# for a period of fi7e ears 0eginning with the month in which such institution
is set upS1T9
:
8Pro7ided that a computer training institution or computer training scheme appro7ed 0 the
,entral Aoard of Re7enue 0efore the first da of &ul# 3@@@# shall continue to a7ail exemption under this
clause till the expir of the specified period/9
c"olars"ips:
+=)- Scholarships granted to meet the cost of education/
*ocal aut"orities:
+==- An income of a local authorit# not 0eing income from 0usiness# if an# carried on 0 it outside its
Curisdictional area/
8 9
ports +oards# etc.:
+(@- An income deri7ed 0 an Aoard or other organisation esta0lished
;
80 Eo7ernment9 in Pa!istan for
the purposes of controlling# regulating or encouraging maCor games and sports recognised 0 Eo7ernment/
'
,l/ +=<A- ins/ 0 %/ A/ '(()/
3
Su0s/ for >appro7ed 0 the ,entral Aoard of Re7enue? 0 %/ "/ 3@@@/
4
Su0s/ for >3@@@? ibid/
:
Pro7iso ins/ ibid/
;
Words ins/ 0 %/A/'(()/
178
8+('- Su0Cect to the pro7isions of su0-section +4A- of section :)# an amount paid as donation to the
following institutions# foundations# societies# 0oards# trusts and funds# namel1-
+i- an Sports Aoard or institution recognised 0 the %ederal Eo7ernment for the purposes of
promoting# controlling or regulating an sport or game;
+ii- PresidentGs fund for Afghan Refugees;
+iii- %und for promotion of Science and $echnolog in Pa!istan;
+i7- %und for Retarded and Handicapped ,hildren;
+7- National $rust %und for the Disa0led;
+7i- Aangladesh %lood Relief %und# '(==;
+7ii- %und for De7elopment of .aHar of HaHarat Aurri 2mam;
+7iii- Ra0ita-e-2slamiGs ProCect for printing copies of the Hol Puran;
+ix- %atimid %oundation# Qarachi;
+x- Al-Shifa $rust;
+xi- Aan! of ,ommerce and ,redit 2nternational %oundation for Ad7ancement of Science and
$echnolog;
+xii- Societ for the Promotion of Engineering Sciences and $echnolog in Pa!istan;
+xiii- PresidentGs %und for Assistance to Palestine;
+xi7- PresidentGs %amine Relief %und for Africa;
+x7- Aangladesh ,clone Relief %und# '(=;;
+x7i- Prime .inisterGs %und for the Welfare of Widows and "rphans;
+x7ii- Prime .inisterGs Disaster Relief %und# '(=);
+x7iii- ,hief .inister PunCa0Gs %lood Relief %und# '(==;
+xix- Prime .inisterGs %und for Welfare and Relief for Qashmiris;
+xx- Prime .inisterGs Aangladesh ,clone Relief %und# '((';
+xxi- Sindh Eo7ernorGs Relief %und# '((@# for the Relief and Reha0ilitation of Bictims of
Biolence in Sindh;
XX
179
+xxii- ,itiHens-Police *iaison ,ommittee# ,entral Reporting ,ell# Sindh Eo7ernor House#
Qarachi;
+xxiii- 2,2, %oundation;
+xxi7- A,,2 %oundation;
+xx7- National .anagement %oundation;
+xx7i- 8Endowment %und of the institutions of the Agha Qhan De7elopment Networ! +Pa!istan-
listed in Schedule ' of the Accord and Protocol# dated No7em0er '4# '((:# executed
0etween the Eo7ernment of the 2slamic Repu0lic of Pa!istan and Agha Qhan De7elopment
Networ!9
+xx7ii- Shaheed Rulfi5ar Ali Ahutto .emorial Awards Societ;
+xx7iii- 250al .emorial %und;
+xxix- ,ancer Research %oundation of Pa!istan# *ahore;
+xxx- Shau!at Qhanum .emorial $rust# *ahore;
8+xxxi- ,hristian .emorial Hospital# Sial!ot9; 8and9
8+xxxii- National .useums# National *i0raries and .onuments or institutions declared to 0e
National Heritage 0 the %ederal Eo7ernment/9
8+xxxiii-.umtaH Aa!htawar .emorial $rust Hospital# *ahore/9
8xxxi7- Qashmir %und for Reha0ilitation of Qashmir Refugees and %reedom %ighters/9
8+xxx7- 2nstitutions of the Agha Qhan De7elopment Networ! +Pa!istan- listed in Schedule 'of the
Accord and Protocol# dated No7em0er '4# '((:# executed 0etween the Eo7ernment of the
2slamic Repu0lic of Pa!istan and Agha Qhan De7elopment Networ!/9
8+xxx7i- AHad Qashmir PresidentGs .uCahid %und# '()3; National 2nstitute of ,ardio7ascular
Diseases# +Pa!istan- Qarachi; Ausinessmen Hospital $rust# *ahore; Premier $rust Hospital#
.ardan; %aisal Shaheed .emorial Hospital# EuCranwala; %aisal Shaheed .emorial
Hospital $rust# EuCranwala; Qhair-un-Nisa Hospital %oundation# *ahore; Sind and
Aaluchistan Ad7ocatesG Aene7olent %und; Rashid .inhas .emorial Hospital %und; and
+xxx7ia- .ohatta Palace Ealler $rust;
+xxx7ii- An relief or welfare fund esta0lished 0 the %ederal Eo7ernment/9
'
+('A- An amount paid as donation to the Prime .inisterGs %und for National De0t Retirement819
'
,l/+('A- ins/ 0 S R " '='+'-U()# dated 33-4-'(()/
180
'
8Pro7ided that the exemption under this clause shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3/9
3
8+('A- An amount paid as donation to the National Self Reliance %und819
4
8Pro7ided that the exemption under this clause shall not appl in respect of an assessment ear
commencing on# or after# the first da of &ul# 3@@3/9
8 9
&nco(e of reli,ious or c"aritable trusts# etc.:
+(4- An income which is deri7ed from# 8Sin7estments in securities of the %ederal Eo7ernment and 8house
propert9 8 9 held under trust or other legal o0ligations wholl# or in part onl# for 8religious or9 charita0le
purposes and is actuall applied or finall set apart for application thereto1

8 9
8Pro7ided that nothing in this clause shall appl to so much of the income as is not expended
within Pa!istan19
Pro7ided further that if an sum out of the amount so set apart is expended outside Pa!istan# it
shall 0e included in the total income of the income ear in which it is so expended or of the ear in which
it was set apart# whiche7er is the greater# and the pro7isions of su0-section +4- of section <; shall not appl
to an assessment made or to 0e made in pursuance of this pro7iso/
8Explanation/- Notwithstanding anthing contained in the .ussalman Wa!f Balidating Act# '('4 +B2 of
'('4-# or an other law for the time 0eing in force or in the instrument relating to the trust or the
institution# if an amount is set apart# expended or dis0ursed for the maintenance and support wholl or
partiall of the famil# children or descendants of the author of the trust or the donor or the ma!er of the
institution or for his own maintenance and support during his life time or pament to himself or his famil#
children# relations or descendants or for the pament of his or their de0ts out of the income from house
propert dedicated# or if an expenditure is made other than for charita0le purposes# in each case such
expenditure# pro7ision# setting apart# pament or dis0ursement shall not 0e deemed# for the purposes of
this clause# to 0e for religious or charita0le purposes/9
8 9
+(:- An income of a religious or charita0le institution deri7ed from 7oluntar 8contri0utions9 applica0le
solel to religious or charita0le purposes of the institution1
Pro7ided that nothing contained in clause +(4- or this clause shall appl to the income of a pri7ate
religious trust which does not enure for the 0enefit of the pu0lic/
8 9
'
Pro7iso ins/ 0 %/ "/ 3@@'/
3
,l/ +('A- ins/ 0 SR" ;3( +'- U (=# dated (-<-'(==
4
Pro7iso ins/ 0 %/ "/ 3@@'/
181
8 9
8 9
8 9
8 9
8+'@3,- An income deri7ed 0 an assessee from the 0usiness of fish catching or fish processing# where
the fish catching 0usiness or fish processing unit is esta0lished 0 the assessee for the first time 0etween
first da of &ul# '((4# and 4@th da of &une# 8'(()9# for a period of fi7e ears from the date of such
esta0lishment# su0Cect to the condition that the said date shall 0e determined 0 the ,ommissioner on an
application made 0 the assessee/9
8+'@3D- 2ncome of .utual %unds1
An income deri7ed 0 a .utual %und or an in7estment compan registered under the 2n7estment
,ompanies and 2n7estment Ad7isors Rules# '()' or a unit trust scheme constituted 0 an asset
management compan registered under the Assets .anagement ,ompanies Rules# '((;# if not less than
ninet per cent of its income of that ear is distri0uted amongst the unit or certificate holders or share-
holders# as the case ma 0e/9
&nco(e of (odarabas
'
8+'@3E- An income# not 0eing income from trading acti7it# of a modara0a registered under the
.odara0a ,ompanies and .odara0a +%loatation and ,ontrol- "rdinance# '(=@ +DDD2 of '(=@-# for an
assessment ear commencing on or after the first da of &ul# '(((1
Pro7ided that not less than ninet per cent of its total profits in the ear as reduced 0 the amount
transferred to a mandator reser7e# as re5uired under the pro7isions of the said "rdinance or the rules
made thereunder1
Pro7ided further that with effect from the first da of &ul# '(((# for the purpose of determining the
distri0ution of ninet per cent profits# the profits distri0uted though 0onus certificates or shares to the
certificate holders shall not 0e ta!en into account/;9
+'@3%- $he income of National 2n7estment +Mnit- $rust for the assessment ears '(((-3@@@ and 3@@@-
3@@'/
3
8+'@3E-
4
87enture capital compan and 7enture capital fund9
8 9
8 9
8 9
'
Su0s/ 0 %/A/'(((/ Earlier inserted 0 %/A/ '((=/
3
,l/+'@3E- ins/ 0 SR" dated /
4
Words etc su0s/ 0 SR" '3)+2-U3@@'# dated 3:-3-3@@'/
182
8+'@)A- An di7idends recei7ed on or after the first da of &ul# '(=3# 0 the 2n7estment ,orporation of
Pa!istan from an other compan which has paid or will pa the tax in respect of the profits out of which
such di7idends are paid/
'
8 9
&nco(e of partners of fir(s# etc.:
+'@(- An sum recei7ed 0 an assessee as a mem0er of a Hindu undi7ided famil out of the income of the
famil/
+''@-An sum which the assessee is entitled to recei7e out of the income of an association of persons
+other than a Hindu undi7ided famil# a compan or a firm- on which tax has alread 0een paid 0 the
association1
Pro7ided that such sum shall 0e included in the total income of the assessee for computing the
a7erage rate of tax applica0le to the total income excluding such sum/
+'''- An sum 0eing the share of the assessee +or an portion thereof- in the profits and gains of an
unregistered firm# not 0eing a firm treated as a registered firm under su0-clause +ii- of clause +0- of su0-
section +'- of section <(# computed in the manner laid down in su0-section +:- of section <(# on which tax
has alread 0een paid 0 the firm1
Pro7ided that such sum shall 0e included in the total income of the assessee for computing the
a7erage rate of tax applica0le to the total income excluding such sum/
8+'''A- An sum 0eing the share of the assessee +or an portion thereof- in such profits and gains of a
registered firm as are lia0le to 0e assessed under the pro7isions of section =@, 8or section =@,,9/
+''3- An distri0ution recei7ed 0 an assessee from the National 2n7estment +Mnit- $rust or a .utual
%und esta0lished 0 the 2n7estment ,orporation of Pa!istan out of the capital gains of the said $rust or
%und on which tax has alread 0een paid/
8 9
8 9
&nco(e fro( transport business:
+'';- An income deri7ed 0 a person from pling of an 7ehicle registered in the territories of AHad
&ammu and Qashmir# excluding income arising from the operation of such 7ehicle in Pa!istan to a person
who is resident in Pa!istan and non-resident in those territories/
&nco(e of -ater and $ower Develop(ent .ut"ority:
8+'';A- An income deri7ed 0 the Pa!istan Water and Power De7elopment Authorit# esta0lished under
the Pa!istan Water and Power De7elopment Authorit Act# '(;= +West Pa!istan Act No/ DDD2 of '(;=-/9
'
,lause +'@=- omitted 0 %/ "/ 3@@'/ Earlier in ins/ 0 %/ A/ '(()/ Still earlier# the original clause was omitted 0 %/ A/ '((;/
183
'
8+'';A- $he income deri7ed 0 a compan 0eing a holding compan of which more than ninet-nine per
cent shares are owned and held 0 the Water and Power De7elopment Authorit specified in entr +'';A-
for the assessment ears '((=-(( -3@@@ and 3@@@-3@@'/

+'';,- $he 2ncome deri7ed 0 su0sidiar compan in Which more than ninet -nine per cent shares are
held 0 a compan specified in entr +'';A-# engaged in generation of thermal power or transmission or
distri0ution of electricit# for assessment ears '((=-((#'(((-3@@@ and 3@@@'/9
Capital ,ains:
+''<- An income chargea0le under the head 6capital gains68# 0eing income from the sale of Smodara0a
certificates orT San instrument of redeema0le capital as defined in the ,ompanies "rdinance# '(=:
+D*B22 of '(=:-# listed on an stoc! exchange in Pa!istan orT shares of a pu0lic compan +as defined in
the %irst Schedule- Sand the Pa!istan $elecommunications ,orporation 7ouchers issued 0 the
Eo7ernment of Pa!istanT#9 deri7ed 0 an assessee in respect of an assessment ear ending on or 0efore
the thirtieth da of &une#
3
83@@;9/
8+''<A- An income chargea0le under the head Fcapital gainsG# 0eing income from the sale of shares of a
pu0lic compan +as defined in the %irst Schedule-# deri7ed 0 an foreign institutional in7estor as is
appro7ed 0 the %ederal Eo7ernment for the purposes of this clause/9
8+''<A- An income chargea0le under the head Fcapital gainsG arising to an assessee for an assessment
ear commencing on or after the first da of &ul# '(('# from the sale of shares of industrial units of
pu0lic sector corporations 0 the Pri7atiHation ,ommission/9
8+''<,- An income chargea0le under the head 6capital gains6# 0eing income from the sale of shares of a
pu0lic compan +as defined in the %irst Schedule- set up in an Special 2ndustrial Rone referred to in
clause +'3<,- deri7ed 0 an assessee for a period of fi7e ears from the date of commencement of its
commercial production8199
8Pro7ided that the exemption under this clause shall not 0e a7aila0le to an assessee from the sale of shares
of such companies which are not eligi0le for exemption from tax under clause +'3<,-/9
+'')- An income chargea0le under the head 6capital gains6 deri7ed 0 an assessee from an industrial
underta!ing set up in an area declared 0 the %ederal Eo7ernment to 0e a 6Rone6 within the meaning of
the Export Processing Rones Authorit "rdinance# '(=@ +2B of '(=@-/
4
8+ '')A- An income deri7ed 0 an indi7idual from transfer of his mem0ership rights or share of a stoc!
exchange in Pa!istan to a compan at an time 0etween the '
st
da of &ul# '((=# and the 4@th da of &une#
'(((
:
Sand 0etween the first da of &ul# 3@@@ and the 4@th da of &une# 3@@'T/9
+''=- An share of income recei7ed 0 an assessee out of capital gains on which tax has 0een paid 0 the
firm of which he is a partner/
'
,ls/ +'';A- J +'';,- ins/ 0 SR" '<( +2- U(=#dated <-4-'((=/
3
Su0s/ for >3@@3? 0 %/ "/ 3@@'/ Earlier# figure >3@@3? su0s/ >'(((? 0 %/ A/ '(()/ %igure >'(((? was su0s/ for >'((<? 0
SR" '))+2-U(;# dated '-4-'((;/ %igure >'((<? replaced >'((:? 0 %/ A/ '((4/ %igure >'((:? su0s/ figure >'((3? through %/
A/ '(('/ %igure >'((3G replaced >'(=(? through %/ A/ '((= J figure >'(=(? replaced figure >'(=:? through %/ "/ '(=4/
4
,l/ +'')A- ins/ 0 %/ A/ '(()/
:
Words etc/ ins/ 0 %/ "/ 3@@@/
184
8 9
8 9
8 9
8 9
8+'3'A- Profits and gains deri7ed 0 an assessee from a pioneer industrial underta!ing 8which is set up 0
4@th da of &une# '(()#9 for a period of fi7e ears from the date of commencement of commercial
production1
$he exemption under this clause shall appl to a pioneer industrial underta!ing which-
+a- is owned and managed 0 a compan formed and registered under the ,ompanies Act# '('4 +B22
of '('4-# ha7ing its registered office in Pa!istan;
+0- is an underta!ing the income# profits and gains of which are not lia0le to 0e computed in
accordance with the rules contained in the %ifth Schedule;
S+c- fulfils the following conditions# namel1-
+i- that the underta!ing is 0ased on highl sophisticated technolog;
+ii- that the technolog emploed has fast o0solescence;
+iii- that in7estment in the underta!ing in7ol7es high ris!; and
+i7- that the goods produced# a are to 0e produced# are such that neither these goods# nor identical or
close su0stitutes thereof# are 0eing produced in Pa!istan; and
+d- is appro7ed# on an application made 0 the assessee in such form and manner and accompanied 0
such statements# certificates# documents and underta!ings# and in accordance with such procedure# as ma
0e prescri0ed# 0 the ,entral Aoard of Re7enue/T9
8+'3'A- Profits and gains deri7ed 0 an assessee# 0eing a Pa!istani compan# from an industrial
underta!ing engaged in the manufacture of electronic e5uipment or components thereof which is set up in
the North West %rontier Pro7ince or in the 2slama0ad ,apital $erritor 80 4@th da of &une# '(()#9 and is
appro7ed 0 the ,entral Aoard of Re7enue for purposes of this clause# for a period of fi7e ears from the
date of commencement of commercial production/9
[&nco(e fro( s"ips
+'3',- Profits and gains deri7ed 0 an assessee 0eing a Pa!istani compan from a ship registered in
Pa!istan 0etween the first da of &ul# '((4# and 4'st da of Decem0er# '((;# for a period of fi7e ears
from the date of registration of such ship in Pa!istan/9
8 9
185
8 9
8 9
8 9
8 9
[/012C3 Fruit $rocessin,
+'- Profits and gains deri7ed 0 an assessee from an industrial underta!ing for a period of fi7e ears from
the date of commencement of commercial production/
+3-$he exemption under this clause shall appl to an underta!ing which is-
+a- set up 0etween the first da of &ul# '((:# and the thirtieth da of &une# 83@@@9# 0oth das
inclusi7e;
+0- owned and managed 0 a compan formed exclusi7el for operating the said industrial
underta!ing engaged in fruit processing and registered under the ,ompanies "rdinance# '(=: +D*B22 of
'(=:-# and ha7ing its registered office in Pa!istan; and
+c- is not formed 0 splitting up or the reconstruction or reconstitution of 0usiness alread in existence
or 0 transfer to a new 0usiness of an machiner or plant in Pa!istan at an time 0efore the
commencement of the new 0usiness/
/012D3 4anufacture of soft and stuffed toys
+'- Profits and gains deri7ed 0 an assessee from an industrial underta!ing for a period of fi7e ears from
the date of commencement of commercial production/
+3- $he exemption under this clause shall appl to an industrial underta!ing which is-

+a- set up 0etween the first da of &ul# '((:# and the thirtieth da of &une# 83@@@9# 0oth das
inclusi7e;
+0- owned and managed 0 a compan formed exclusi7el for operating the said industrial
underta!ing engaged in the manufacture of soft and stuffed tos; and
+c- not formed 0 splitting up# reconstruction or reconstitution of 0usiness alread in existence or 0
transfer to a new 0usiness of an machiner or plant in Pa!istan at an time 0efore the commencement of
the new 0usiness/9
[/012E3 4anufacture of olar Ener,y Equip(ent
+'- Profits and gains deri7ed 0 an assessee from an industrial underta!ing for a period of fi7e ears from
the date of commencement of commercial production/
186
+3- $he exemption under this clause shall appl to an industrial underta!ing which is-
+a- engaged in the manufacture of solar thermal# photo7oltaic e5uipment for production of solar
energ and solar appliances;
+0- set up 0etween the first da of &ul# '(() and the thirtieth da of &une# 3@@@; and
+c- is not formed 0 splitting up or the reconstruction or reconstitution of 0usiness alread in existence
or 0 transfer to a new 0usiness of an machiner or plant in Pa!istan at an time 0efore the
commencement of the new 0usiness/9
+'3<- Profits and gains deri7ed 0 an assessee from an industrial underta!ing set up in an area declared 0
the %ederal Eo7ernment to 0e a 6Rone6 within the meaning of the Export Processing Rones Authorit
"rdinance# '(=@ +2B of '(=@-# for a period of fi7e ears from the date of commencement of production#
and for such further period as ma 0e allowed 0 the %ederal Eo7ernment819
Pro7ided that nothing contained in this clause shall appl to an industrial underta!ing set up after the 4@th
&une# '(()/
8+'3<A- Profits and gains deri7ed 0 an assessee upto the 8thirtieth da of &une# '(()9# from an industrial
underta!ing set up in the Qarachi Export Processing Rone# declared 0 the %ederal Eo7ernment as a
FRoneG within the meaning of the Export Processing Rones Authorit "rdinance# '(=@ +2B of '(=@-/9
8+'3<A- +i- Profits and gains deri7ed 0 a compan for a period of fi7e ears from an industrial
underta!ing set up in such area and within such period and on such conditions as the %ederal Eo7ernment
ma# 0 notification in the official EaHette# specif819
8Pro7ided that the exemption under this su0-clause shall not 0e a7aila0le after the 4'st &anuar#
'((<# except to such companies# otherwise 5ualifing under this clause# which ha7e esta0lished letters of
credit for the import of plant and machiner for such industrial underta!ing 0 the 4'st &anuar# '((</9
+ii- 2ncome chargea0le under the head 6,apital gains6 deri7ed 0 an assessee from the sale of shares
representing foreign e5uit in such compan and on such conditions as the %ederal Eo7ernment ma# 0
notification in the official EaHette# specif8199
Pro7ided that the exemption under this su0-clause shall not 0e a7aila0le to an assessee from the
sale of shares representing foreign e5uit in such companies which do not 5ualif for exemption under
su0-clause +i-/
8+'3<,- +'- Profits and gains deri7ed 0 an assessee from an industrial underta!ing set up 0etween the
first da of &ul# '((;# and the thirtieth da of &une# '(((# 0oth das inclusi7e# for a period of ten ears
0eginning with the month in which the underta!ing is set up or commercial production is commenced#
whiche7er is the later819
Pro7ided that the exemption under this clause shall not 0e a7aila0le after the 4'st &anuar# '((<# except to
such assessees# otherwise 5ualifing under this clause# who ha7e esta0lished letters of credit for the import
of plant and machiner for such industrial underta!ing 0 the 4'st &anuar# '((</
187
+3- $he exemption under this clause shall appl to an industrial underta!ing which fulfils the following
conditions# namel1-
+a- that it is set up such area as ma 0e notified 0 the %ederal Eo7ernment to 0e a Special
2ndustrial Rone;
+0- that it is not formed 0 the splitting up# or the reconstruction or reconstitution of a 0usiness
alread in existence of 0 transfer to a new 0usiness of an machiner or plant used in a
0usiness which was 0eing carried on in Pa!istan at an time 0efore the commencement of
the new 0usiness;
+c- that it is owned and managed 0 a compan formed exclusi7el for operating such
industrial underta!ing and registered under the ,ompanies "rdinance# '(=: +D*B22 of
'(=:-# ha7ing its registered office in Pa!istan; and
+d- that it is not engaged in the manufacture of arms and ammunition# securit printing#
currenc and mint# high explosi7es# radioacti7e su0stances# alcohol +except industrial
alcohol-# cotton ginning# spinning +except as part of integrated textile unit-# sugar
manufacturing +white-# flour milling# steel rerolling and furnace# to0acco industr# ghee or
7egeta0le oil industr# plastic 0ags +including Polproplene# and Polethlene- 0e7erages
+excluding fruit Cuices-# polester industr# automo0ile assem0l and cement industr/
+'3<D- +'- Profit and gains deri7ed 0 an assessee from an industrial underta!ing set up 0etween the first
da of &ul# '((;# and the thirtieth da of &une# 8'(()9# 0oth das inclusi7e# for a period of eight ears
0eginning with the month in which commercial production is commenced/
+3- $he exemption under this clause shall appl to an industrial underta!ing which fulfils the following
conditions# namel1-
+i- 2t is set up in a rural area i/e/ outside the limits of an municipal corporation# municipal
committee# cantonment 0oard or 2slama0ad ,apital $erritor and in no case within the
following areas namel1-
+a- upto thirt !ilometers from the municipal or cantonment limits of Qarachi or
*ahore; and
+0- upto ten !ilometers from the existing limits of municipal corporations or
cantonment 0oards;
Explanation/- $he distance 0etween an industrial underta!ing and the outer 0oundar of a
municipal or cantonment limit shall 0e measured in a straight line on horiHontal plane as
pro7ided in section '' of the general ,lauses Act# +D of '=()-# and the said distance#
where7er re5uired# will 0e defined and determined 0 the concerned officer of the District
Administration/
+ii- 2t is not formed 0 the splitting up# or the reconstruction or reconstitution of a 0usiness
alread in existence or 0 transfer to a new 0usiness of an machiner or plant used in a
0usiness which was 0eing carried on in Pa!istan at an time 0efore the commencement of
the new 0usiness/
188
+iii- 2t is owned and managed 0 a compan formed for operating such industrial underta!ing and
registered under the ,ompanies "rdinance# '(=: +D*B22 of '(=:-# ha7ing its registered
office in Pa!istan/
+i7- 2t is an underta!ing engaged in an of the following agro-0ased industries1-
+a- culti7ation# production# processing and preser7ation of flowers and ornamental
plants;
+0- cattle# sheep and goat farming for the production and processing of meat/ 2t will
co7er rearing# sale and slaughtering of animals and processing and pac!ing of meat
and meat products;
+c- dair farming for the production of mil!;
+d- processing# pac!ing# preser7ation and canning of mil! and mil! products with or
without addition of other things;
+e- processing# pac!ing# preser7ation and canning of meat and meat products;
+f- processing# pac!ing# preser7ation and canning of fruits and 7egeta0le;
+g- inland farming and preser7ation# pac!ing and canning of fish and seafood with or
without addition of other things;
+h- culti7ation# production and multiplication of high ielding seeds of cereals# pluses#
7egeta0les# fruits# oilseeds# and cash crops li!e sugarcane# cotton coca# coffee# tea#
her0s and spices;
+i- culti7ation# production and extraction of edi0le oils;
+C- poultr farming and processing# pac!ing# preser7ation and canning of poultr meat
with or without addition of other things; and
+!- manufacture of cattle and poultr feeds/9
8+'3<E- +'- Profits and gains deri7ed 0 a compan set up 0etween the first da of &anuar# '((<# and the
thirtieth da of &une# '(((# 0oth das inclusi7e# and engaged in the de7elopment of new deep sea port at
Eawadar and the construction of coastal roads in such area for a period of ten ears 0eginning with the
month in which such compan is set up and su0Cect to such conditions as specified in su0-clause +3- or
ma 0e notified 0 the %ederal Eo7ernment from time to time/
+3- $he exemption under this clause shall appl to a compan which fulfills the following conditions#
namel1-
+a- that the compan is formed exclusi7el for underta!ing acti7ities specified in su0-clause
+'- and is registered under the ,ompanies "rdinance# '(=: +D*B22 of '(=:-# ha7ing its
registered office in Pa!istan; and
189
+0- that it is not formed 0 the splitting up# or the reconstruction or reconstitution of a 0usiness
alread in existence or 0 transfer to a new 0usiness of an machiner or plant used in a
0usiness which was 0eing carried on in Pa!istan at an time 0efore the commencement of
the new 0usiness/9
8 9
+'3=- An income accruing or arising outside Pa!istan to an industrial underta!ing set up in an area
declared 0 the %ederal Eo7ernment to 0e a FRoneG within the meaning of the Export Processing Rones
Authorit "rdinance# '(=@ +2B of '(=@-# pro7ided the said income accrues or arises from such acti7ities
of the said underta!ing as are appro7ed 0 the %ederal Eo7ernment819
8Pro7ided that nothing contained in this clause shall appl to an industrial underta!ing set up after the 4@th
&une# '(()/9
8 9
84edical expenditure by individuals/
+'3(A- An amount paid 0 an assessee# 0eing an indi7idual and resident in Pa!istan# 0 wa of personal
expenditure on medical ser7ices1
Pro7ided that the receipts in respect of such expenditure 0earing names8# National $ax Num0er9 and
complete addresses of the medical practitioners are furnished alongwith his return of total income/9
8+'3(A- An amount paid 0 wa of %ederal Educational %ee or expended on setting up and managing or
running of a middle# high or technical school in accordance with the conditions laid down in the %ederal
Educational %ee Scheme/
8 9
+'4@A- An income which accrues or arises outside Pa!istan to a resident +who is a citiHen of Pa!istan 0ut
was no resident in an of the four ears preceding the ear in which he 0ecame resident- for two ears#
that is to sa# in respect of the income ear in which he 0ecame resident and the income ear next
following/9
8 9
8 9
&nco(e of $a)istan .,ricultural Researc" Council:
+'44- 2ncome of Pa!istan Agricultural Research ,ouncil# 2slama0ad/
190
8+'44A- An income of the 2nstitutions of the Agha Qhan De7elopment Networ!# +Pa!istan- as contained
in Schedule ' of the Accord and protocol# dated No7em0er '4# '((:# executed 0etween the Eo7ernment
of the 2slamic Repu0lic of Pa!istan and the Agha Qhan De7elopment Networ!/ and 9
&nco(e of $a)-*ibya 5oldin, Co(pany:
8+'4:- An income of Pa!-*i0a Holding ,ompan in Pa!istan upto the fourteenth da of "cto0er# '((=#
su0Cect to the conditions that-
+i- the *i0an contri0ution in foreign exchange shall 0e deposited with the State Aan! of Pa!istan or in a
foreign currenc account with a nationalised commercial 0an! in Pa!istan;
+ii- the said contri0ution in foreign exchange shall not 0e con7erted into Pa! rupee unless it is in7ested in a
proCect in Pa!istan; and
+iii- the return paa0le to *i0ans shall not 0e co7ered 0 the exchange ris! facilit in Pa!istan/9
[&nco(e of audi-$a) &ndustrial and .,ricultural &nvest(ent Co(pany *i(ited:
+'4:A- An income of Saudi-Pa! 2ndustrial and Agricultural 2n7estment ,ompan *imited in Pa!istan
for a period of 8twent ears9 commencing with the thirt-first da of Decem0er# '(=3/9
&nco(e of $a)istan-!uwait &nvest(ent Co(pany:
+'4;- An income of Pa!istan-Quwait 2n7estment ,ompan in Pa!istan for a period of 8twent ears9
from the date of its incorporation/
8 9
8+'4;A- An income of the *ia5uat National Hospital Association# Qarachi/9
8+'4;,- An income deri7ed 0-
+i- A0dul Sattar Edhi %oundation# Qarachi; and
+ii- Ail5uis Edhi %oundation# Qarachi/9
8 9
8 9
8 9
+'4(- An income-
+a- of a compan registered under the ,ompanies Act# '('4 +B22 of '('4-# and ha7ing its
registered office in Pa!istan# as is deri7ed 0 it 0 wa of roalt# commission or fees from
a foreign enterprise in consideration for the use outside Pa!istan of an patent# in7ention#
model# design# secret process or formula or similar propert right# or information
191
concerning industrial# commercial or scientific !nowledge# experience or s!ill made
a7aila0le or pro7ided to such enterprise 0 the compan or in consideration of technical
ser7ices rendered outside Pa!istan to such enterprise 0 the compan under an agreement I
in this 0ehalf# or
+0- of an other assessee as is deri7ed 0 him# in the income ear rele7ant to the assessment
ear 0eginning with the first da of &ul# '(=3 and an assessment ear thereafter# 0 wa
of fees for technical ser7ices rendered outside Pa!istan to a foreign enterprise under an
agreement Ientered into in this 0ehalf1-
Pro7ided that-
+i- such income is recei7ed in Pa!istan 0 or on 0ehalf of the said compan or other assessee#
as the case ma 0e# in accordance with the law for the time 0eing in force for regulating
paments and dealings in foreign exchange; and
+ii- where an income as aforesaid is not 0rought into Pa!istan in the ear in which it is earned
and tax is paid thereon# an amount e5ual to the tax so paid shall 0e deducted from the tax
paa0le for the ear in which it is 0rought into Pa!istan and# where no tax is paa0le for
that ear or the tax paa0le is less than the amount to 0e deducted# the whole or such part
of the said amount as is not deducted shall 0e carried forward and deducted from the tax
paa0le for the ear next following and so on/
I
+':@- An income of an assessee# 0eing a partner in a registered firm# as represents his share of such
income of the said firm as is exempt under clause +'4(-/
8$a)istan 6eleco((unication Corporation:]
+':@A- An income deri7ed 0 the Pa!istan $elecommunication ,orporation from the 'st &ul# '((:# till
the incorporation of its successor compan# namel# the Pa!istan $elecommunication ,ompan *imited/9
[$a)istan 6eleco((unications Co(pany /$vt3 *i(ited:
+':@A- An income deri7ed 0 the Pa!is'tan $elecommunication ,ompan +P7t- *imited# for a period of
three 8complete financial9 ears from the date of its esta0lishment as a compan under the ,ompanies
"rdinance# '(=: +D*B22 of '(=:-/9
&nco(e of forei,n air and s"ippin, enterprises:
+':'- An income of a foreign enterprise# for the time 0eing appro7ed 0 the %ederal Eo7ernment for the
purpose of this clause# from the operation of ships and aircraft in international traffic except where such
income is earned from ships and aircraft used principall to transport passengers and goods exclusi7el
0etween places in Pa!istan1
Pro7ided that exemption under this clause shall not 0e a7aila0le to an enterprise of a countr which
does not allow similar exemption to a li!e enterprise of Pa!istan/
192
Explanation/- 6%oreign enterprises6 means an enterprise which is carried on 0 a person who is not
resident in Pa!istan and the effecti7e management of which is situated outside Pa!istan/
8 9
8 9
8 9
8Donations to t"e *iaquat 7ational 5ospital .ssociation# !arac"i.
+':)A- Such portion of the total income of an assessee as is paid 0 him during the income ear as
donation to the *ia5uat National Hospital Association# Qarachi1
Pro7ided that the amount so donated shall 0e included in computing the total income of the assessee1
Pro7ided further that the amount 0 which the tax paa0le 0 an assessee is reduced on account of the
exemption under this clause shall 0e e5ual to the sum which 0ears the same proportion to the sum
exempted from tax under this clause as the tax paa0le on the total income of the assessee 0ears to the said
total income/9
8&nco(e of ubsidiary of &sla(ic Develop(ent +an):
8+':=- An income deri7ed 0 an su0sidiar of the 2slamic De7elopment Aan! wholl owned 0 it and
set up in Pa!istan and engaged in owning and leasing of tan!ers/9
8 9
8 9
[Donations to t"e $ri(e 4inister8s Relief Fund for +osnia-5er9e,ovina.-
8 9
8Donations to t"e $ri(e 4inister8s Flood Relief Fund 0::11-
8 9
8 9
8+';3- An income deri7ed 0 the *i0an Ara0 %oreign 2n7estment ,ompan 0eing di7idend of the Pa!-
*i0a Holding ,ompan/
+';4- An income deri7ed 0 the Eo7ernment of Qingdom of Saudi Ara0ia 0eing di7idend of the Saudi
Pa! 2ndustrial and Agricultural 2n7estment ,ompan *imited/9
8+';:- An income deri7ed 0 the Pa!istan ,ouncil of Scientific and 2ndustrial Research/9
193
' to (
8 9
3
8 9
8&nco(e fro( 4ont"ly &nco(e avin,s .ccount c"e(e of t"e Directorate of 7ational avin,s:
+'<@- An income deri7ed 0 a person from his in7estment from .onthl 2ncome Sa7ings Account
Scheme of the Directorate of National Sa7ings pro7ided that the monthl instalment in an account does
not exceed Rs/;@@/9
8 9
8 9
8 9
8 9
8 9
8+'<),- An amount deemed to 0e income of an 8emploee9 for the purposes of tax on tax/ 8 9
8&nstitution of En,ineers# $a)istan# *a"ore:
+'<=- An income deri7ed 0 the S2nstitution of Engineers# Pa!istan# *ahoreT/9
8 9
8 9
8 9
4
8 9
SPro7ided that exemption under this clause shall not 0e a7aila0le in respect of certificates purchased on or
after the '; &une# '((;/T9
8+')'A- An amount recei7ed on encashment of an certificate issued in pursuance of the M/S/ Dollar
Aearer ,ertificates Rules# '(('1
'
'/ ,l/+';:A- omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 SR" 33)+2-U(;# dated 3'-4-'((;/
3/ ,l/+';;- deleted 0 SR" '3<<+2-U(@# dated ''-'3-'((@/
4/,l/ +';;A- deleted 0 SR" (;:+2-U =;# dated '-'@-'(=;/
:/,l/ +'';A- deleted 0 SR" '3)=+2-U('# dated 4'-'3-'(('/
;/,l/ +';;,- deleted ibid.
</ ,l/ +';;D- deleted ibid/
)/ ,l/ +';<- deleted 0 SR" '3<<+2-U(@# dated ''-'3-'((@/ Earlier ins/ 0 SR" '@<:+2-U=3# dated 3;-'@-'(=3/
=/,l/ +';)- deleted ibid/ Earlier ins/ 0 ''<:+2-U=3# dated ')-''-'(=3/
(/ ,l +';=- omitted 0 %/ A/ '((3/ Earlier ins/ 0 SR" 4=+2-U=4# dated ')-'-'(=4/

3
,l/ +';(- deleted 0 SR" '')=+2-U('# dated 4'-'3-'(('/ Earlier ins/ 0 SR" ))+2-U=4# dated 4@-'-'(=4/
4
,l/+')'- omitted 0 %/ "/ 3@@'/ Earlier ins/ 0 SR"<;:+2-U=;# dated '-)-'(=;/
194
SPro7ided that exemption under this clause shall not 0e a7aila0le in respect of certificates purchased on or
after the '; &une# '((;T/9
'
8+')'A- An amount recei7ed on encashment of an Special MS Dollar Aond issued under the Special MS
Dollar Aonds Rules# '((=/
8 9
8 9
8$he 2nternational 2rrigation .anagement 2nstitute# Pa!istan1
+'):- An income deri7ed 0 the 2nternational 2rrigation .anagement 2nstitute +22.2-# Pa!istan/9
8 9
8Pri7ate Sector power ProCects1
+')<- Profits and gains deri7ed 0 an assessee from an electric power generation proCect set up in Pa!istan
on or after the 'st da of &ul# '(==819
Pro7ided that the condition laid down in su0-clause +a- shall not appl to the Hu0 Power ,ompan
*imited/
$he exemption under this clause shall appl to such proCect which is-
+a- owned and managed 0 a compan formed exclusi7el for operating the said proCect and registered
under the ,ompanies "rdinance# '(=: +D*B22 of '(=:-# and ha7ing its registered office in Pa!istan;8and9
+0- not formed 0 the splitting up# or the reconstruction or reconstitution# of a 0usiness alread in
existence or 0 transfer to a new 0usiness of an machiner or plant used in a 0usiness which was 0eing
carried on in Pa!istan at an time 0efore the commencement of the new 0usiness819
8 9
8Pro7ided that nothing contained in this clause shall appl to such compan commencing 0usiness after
the 4@th &une# '(()/9
8 9
[$rivate 6rans(ission *ine $ro%ect:-
+')=- Profits and gains deri7ed 0 an assessee from transmission line proCect set up in Pa!istan on or after
the 'st da of &ul# '((;/
$he exemption under this clause shall appl to such proCect which is-
'
,l/ +')'A- ins/ 0 SR"';(+2-U((# dated (-4-'(((/
195
+a- owned and managed 0 a compan formed for operating the said proCect and registered
under the ,ompanies "rdinance# '(=: +D*B22 of '(=:-# and ha7ing its registered office in
Pa!istan;
+0- not formed 0 splitting up# reconstruction or reconstitution of a 0usiness alread in
existence or 0 transfer to a new 0usiness of an machiner or plant used in a 0usiness
which was 0eing carried on in Pa!istan at an time 0efore the commencement of the new
0usiness; and
+c- owned 0 a compan fift per cent of whose shares are not held 0 the %ederal
Eo7ernment or Pro7incial Eo7ernment or a local authorit or which is not controlled 0
the %ederal Eo7ernment or a Pro7incial Eo7ernment or a local authorit/
+')(- 2ncome from export of computer software and its related ser7ices de7eloped in Pa!istan/
8 9
8 9
8 9

8 9
+'=3-An income referred to in Section 4/: of the %acilitation Agreement 0etween the President of 2slamic
Repu0lic of Pa!istan and the assessee purchasing the Qot Addu Power Station from Pa!istan Water and
Power De7elopment Authorit for a period of ten ears from the 3=
th
&une# '((<; pro7ided# howe7er# that
the exemption under this clause shall onl 0e a7aila0le su0Cect to the 0usiness of the said assessee 0eing
restricted to owning and operating the Qot Addu power station/9
8+'=4- An amount collected 0 ,i7il A7iation Authorit upto the thirt-first Decem0er# '((=# on account
of securit charges/9
8+'=:-/ An income of a special purpose 7ehicle as defined in the Asset Aac!ed SecuritiHation Rules# '(((
made under the ,ompanies "rdinance# '(=: +D*B22 of '(=:-1
Pro7ided that# if there is an income which accrues or arises in the accounts of the special purpose
7ehicle# after completion of the process of the securitiHation# it shall 0e returned to the "riginator as
defined 0 the said rules within the income ear next following the ear in which the income has 0een
determined and such income shall 0e taxa0le in the hands of the "riginator/9
PART II
REDACTION IN TAX RATES
2ncomes or classes of income# or persons or classes of persons# enumerated 0elow# shall 0e lia0le to tax at
such rates which are less than the rates specified in the %irst Schedule# as are specified hereunder1
196
R!te' o& t!x &or #o$+!ie' e2!2e" i ex+lor!tio !" extr!#tio o& $ier!l "e+o'it'.
+'- 2n respect of such profits and gains of such compan as are referred to in clause +'34- of part 2# the
rates of income tax and super tax# as specified in the %irst Schedule and as applica0le to the said profits
and gains of the said compan accruing or arising after the expir of the period of fi7e ears referred to in
the said clause# shall 0e reduced 0 fift per cent for a period of fi7e ears immediatel next following the
exemption period/
R!te o& t!x i re'+e#t o& 0"ert!-i2' i the Ex+ort Pro#e''i2 Foe.
+3- 2n the case of an industrial underta!ing set up in an area declared 0 the %ederal Eo7ernment to 0e a
6Rone6 within the meaning of the Export Processing Hones Authorit "rdinance# '(=@ +2B of '(=@-# the
income# profits and gains of such underta!ing accruing or arising after the expir of the period of
exemption under clause +'3<- of Part 2 shall 0e charged to tax 8for a period of fi7e ears thereafter9 at the
rate e5ual to twent-fi7e per cent of the rates specified in the %irst Schedule 819
8Pro7ided that nothing contained in this clause shall appl in respect of underta!ings whose period of
exemption under clause +'3<- of Part 2 will expire after the 4@th &une# '(()/9
'
8R!te o& t!x i re'+e#t o& #o$$i''io o& ex+ort i"eti2 !2et' et#.
+3A- the tax chargea0le in respect of commission recei7ed 0 an export indenting agent or an export
0uing house shall 0e
3
[at the rate e5ual to the rate of tax applica0le to] the exporter on export of goods to
which such export relates/
R!te o& t!x i re'+e#t o& i#o$e o& e2ieeri2 #otr!#ti2 'er5i#e' re"ere" o0t'i"e P!-i't!.
+3AA- the tax in respect of income from engineering contracting ser7ices rendered outside Pa!istan shall
0e charged at the rate of one percent of the gross receipts# pro7ided that such receipts are 0rought into
Pa!istan in foreign exchange through normal 0an!ing channels/9
7I#o$e &ro$ letti2 o0t +i+elie &or +etrole0$.
+4- An income of persons whose profits or gains from 0usiness are computed under the %ifth Schedule to
this "rdinance as is deri7ed from letting out to other similar persons an pipeline for the purpose of
carriage of petroleum shall 0e charged to tax at the same rate as is applica0le to such persons in
accordance with the pro7isions of the said Schedule/
8+:- 2n the case of a resident 0eing an indi7idual# unregistered firm# association of persons# Hindu
undi7ided famil or artificial Curidical person referred to in clause +43- of section 3# the profit on %ederal
2n7estment Aonds issued under the %ederal 2n7estment Aonds Rules# '(('# shall 0e lia0le to deduction of
income tax under su0-section +3- of section ;@ at the rate of ten per cent of the amount of the said profit/9
8+;- 2n the case of an person referred to in clause +43- of section 3# 0eing a resident# profit on the
rein7estment or the redeposit of Qhaas Deposit ,ertificates or Qhaas Deposit Accounts made under the
National Sa7ings Scheme on or after the tenth da of No7em0er# '(('# shall 0e lia0le to deduction of
income tax under su0-section +3- of section ;@ at the rate of ten per cent of the amount of the said profit/9
'
,ls/ +3A- J +3AA- ins/ 0 SR" '@;3+2-U((# dated ')-(-'(((/
3
Su0s/ for words etc/ >amount e5ual to the tax paa0le 0? 0 SR" '4'4 +2-U((# dated 4@-''-'(((/
197
'
8+;AA- 2n case of an indi7idual# 0eing a resident# the tax from profit or interest of an National Sa7ings
Schemes of Directorate of National Sa7ings or Post "ffice Sa7ings Account in which in7estment is made on#
or after# the first da of &ul# 3@@'# shall 0e deducted at the rate of ten per cent of such profit or interest1
Pro7ided that no tax shall 0e deducted from income or profits paid on-
+a- Defence Sa7ings ,ertificates# Special Sa7ings ,ertificates# Sa7ings Accounts or Post
"ffice Sa7ings Account# made on# or after# the first da of &ul# 3@@'# where such deposit
does not exceed three hundred thousand rupees; and
+0- in7estment in .onthl 2ncome Sa7ing Accounts Scheme of Directorate of National Sa7ings
on# or after# the first da of &ul# 3@@'# where monthl installment in an account does not
exceed one thousand rupees/9
7R!te o& t!x i re'+e#t o& L!hore1I'l!$!.!" Motor/!, Pro=e#t.
+<- 2n the case of Daewoo ,orporation# Seoul# Qorea +hereinafter referred to as the ,ontractor-# paments
recei7ed in full or in part +including a pament 0 wa of an ad7ance- in pursuance of the contract
agreements made with the National Highwa Authorit on the thirtieth da of Decem0er# '(('# for design
and construction of *ahore-2slama0ad .otorwa shall 0e deemed to 0e the income of the ,ontractor and
charged to tax at the rate of three per cent of such pament s which shall constitute final discharge of his
tax lia0ilit under this "rdinance and the ,ontractor shall not 0e re5uired to file the return of total income
under section ;;/9
3
8+<A- $ax shall 0e collected at 4U:
th
of the rate applica0le under section+;- of section ;@ on the goods
imported under the Afghan $ransit $rade Agreement# '(<;and su0Cect to Notification S/R/"/ 4<=+2-U(;#
dated the 3
nd
.a# '(<;-9
4
8+<AA-/ 2n respect of an edi0le oils imported
:
8 9# the tax under su0-section +;- of section ;@ shall 0e
collected at the rate of
;
8three9 per cent of the 7alue of such edi0le oils as increased 0 customs-dut and
sales tax# if an# le7ied thereon/9
<
8 9
8 9
8 9
7R!te i re'+e#t o& #ert!i Tr0't' &!lli2 0"er #l!0'e (:%) o& P!rt I.
'
,l/ +;AA- ins/ 0 %/ "/ 3@@'/
3
,l/ +<A- ins/ 0 SR" :'3+2-U(;# dated 34-;-'((;/
4
,l/ +<AA-/ Su0s/ 0 SR" =3:+2-U((# dated =-)-((/ Earlier ins/ 0 %/A/ '(((/
:
Words >as raw material 0 an industrial underta!ing exclusi7el for its own use? omitted 0 %/ "/ 3@@@/
;
Su0s/ for >two? 0 %/ "/ 3@@@/
<
,l/ +<A- deleted 0 %/ A/ '(((/ Earlier ins/ 0 SR" 4@+2-U((# dated ':-'-'(((/
198
+(- 2n the case of .essrs %auCi %oundation and Arm Welfare $rust# so much of the income chargea0le
under the head >2ncome from 0usiness or profession6 as is not exempt under clause +<3- of Part 2# shall 0e
charged to tax at the rate of 3@V of such income/9
7R!te o& t!x i re'+e#t o& O G M #otr!#tor' o& +ri5!te 'e#tor +o/er +ro=e#t'H
+'@- 2n the case of a non-resident " J . ,ontractor paments# recei7ed in full or in part including a
pament 0 wa of an ad7ance# for the operation and maintenance of a pri7ate sector power proCect 8and
transmission line proCects9 appro7ed 0 the %ederal Eo7ernment shall 0e deemed to 0e the income of the
said " J . ,ontractor and charged to tax at the rate of fi7e per cent of such paments for a period of
three ears 0eginning with the date of commencement of 8companGs operations9 which shall constitute
the final discharge of tax lia0ilit 0 the " J . ,ontractor under this "rdinance in respect of the said
proCect/9
8+''- 2n the case of a non-resident# 0eing a compan# rate of deduction of tax under su0-section +4- of
section ;@ on di7idends recei7ed from a compan engaged exclusi7el in mining operations# other than
petroleum# shall 0e )/; per cent of the gross amount of di7idend/9
8+'3- $he rates of tax as specified in clause +0- and clause +c- of paragraph D of Part B of the %irst
Schedule shall 0e reduced to )/;V in case of di7idends declared or distri0uted 0 purchaser of a power
proCect pri7atiHed 0 WAPDA/9
'
8+'4- 2n the case of consortium of .Us/ S$%A ,onstruction ,ompan of $ur!e and .Us/ &DN of
Aelgium +hereinafter referred to as the contractor - all paments recei7ed in pursuance of the contract
agreement No ,EN -'3<U(4# made with the "rmara Na7al Har0our ProCect Aoard # on the fourteenth da
of &une# '((4 for the construction of Na7al Har0our at "rmara +including off-shore and land de7elopment
wor!s- chargea0le to tax an assessment ears# shall 0e deemed to 0e the income of the contractor and
charged to tax at the rate three per cent which shall constitute final discharge of contractorGs tax lia0ilit
under this "rdinance/?
3
8 9
4
8 9
PART III
REDACTION IN TAX LIA@ILITY
2ncomes# or classes of income# or persons or classes of persons# enumerated 0elow# shall 0e allowed
reduction in tax lia0ilit to the extent and su0Cect to such conditions as are specified hereunder1-
*i(it on t"e inco(e tax payable.
+'- Where an person for an ear-
'
,l/+'4- ins/ 0 SR" '4'4+'- U ()# dated 3@-'3-'(()/
3
,l/+':- omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A/ '((=/
4
,l/+';- omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/A/ '(((/
199
+a- is lia0le to income tax and also to the Wealth-tax paa0le under the Wealth-tax Act# '(<4
+DB of '(<4-; and
+0- his taxa0le income under this "rdinance exceeds one hundred thousand rupees; and
+c- the aggregate amount of income tax and wealth-tax paa0le 0 him exceeds se7ent-fi7e
per cent of his total income#
the income tax paa0le 0 him shall 0e reduced 0 the amount 0 which the said aggregate amount
exceeds se7ent-fi7e percent of his total income/
Re"0#tio i t!x i '0#h #!'e' to /hi#h ASAS !++l,.
'
8
3
S+'A-T $he amount of tax paa0le under Paragraph AA of Part 2 of the %irst Schedule to this "rdinance
0 a person 5ualifing for assessment under the Mni7ersal Saelf Assessment Scheme made under su0-
section +'- of section ;( of this "rdinance for the assessment ear '(((-3@@@# shall 0e reduced 0 an
amount of one thousand# two hundred and fift rupees/9
4
8Reduction in tax in t"e cases of salaried tax payers.-
:
8+'A-
9
8 9
+3- 2n addition to the reduction specified in su0-clause +'-# the tax paa0le 0 a full time teacher or a
researcher# emploed in a non profit education or research institution dul recognised 0 a Aoard of
Education or a Mni7ersit or the Mni7ersit Erants ,ommission
<
8including go7ernment training and
research institution9# shall 0e further reduced 0 an amount e5ual to ;@V of the tax paa0le after the
aforesaid reduction/
+4- $he reduction in tax lia0ilit in su0-clauses +'- and +3- shall 0e applica0le for the purposes of tax
withholding under su0-section +'- of section ;@ from the first da of &ul# 3@@@ and for the purposes of
assessment from assessment ear 3@@'-3@@3/9
Reduction in tax in consequence of devaluation or revaluation of rupee.
+3- $he amount of tax paa0le# in a ear in which the rupee is re7alued or de7alued# 0 an assessee whose
profits or gains are computed in accordance with the rules contained din the %ifth Schedule to this
"rdinance and who had entered with the Eo7ernment into an agreement which pro7ides for such
reduction# shall 0e reduced to the amount that would 0e paa0le in the a0sence of the re7aluation or
de7aluation of the rupee/
'
'/,l/ +A'- ins/ 0 SR" '@:'+2-U((# dated ''-(-'(((/
3
3/ Su0s/ for >+A'-? 0 %/ "/ 3@@@/
4/ ,l/ +'A- ins/ 0 %/ "/ 3@@@/
:/ ,l/ +4- omitted 0 %/A/ '((=/ Earlier ins/ 0 SR" ((<+2-U==# dated ;''-'(==/
;/ ,ls/ +:- to +(- omitted 0 %/ A/ '(()/
</ ,lause +'@- omitted 0 %/ A/ '((=/ Earlier ins/ 0 SR" =;<+2-U ('# dated 3=-=-'(('/
4
:
,l/ +'A- ins/ 0 SR" '@:'+2-U((# dated ''-(-'(((/
;
Su0-,l/+'- omitted 0 %/ "/ 3@@'/
<
Words added ibid.
200
4 to ;
8 9
8+''- Where an compan engaged in the 0usiness of distri0ution of cigarettes manufactured in Pa!istan is
re5uired to pa minimum tax on the amount representing its turno7er under section =@D# the amount of
tax paa0le under the said section shall 0e reduced 0 eight per cent/9
8 9
8 9
8 9
PART IB
EXEMPTION FROM SPECIFIC PROBISIONS
2ncomes# or classes of income# or persons or classes of persons# enumerated 0elow# shall 0e exempt from
the operation of such pro7isions of this "rdinance# su0Cect to such conditions and to the extent# as are
specified hereunder1-
Carry forward of losses of underta)in,s in Export $rocessin, ;one.
+'- 2n the case of losses referred to in section 4; in respect of an industrial underta!ing set up in an area
declared 0 the %ederal Eo7ernment to 0e a 6Rone6 within the meaning of Export Processing Rones
Authorit "rdinance# '(=@ +2B of '(=@-# the period of six assessment ears specified in the said section
shall not appl/
8+3- $he pro7isions of section =@D shall not appl to National 2n7estment +Mnit- $rust or a .utual %und
esta0lished 0 the 2n7estment ,orporation of Pa!istan or an in7estment compan registered under the
2n7estment ,ompanies and 2n7estment Ad7isors Rules# '()' or an other compan in respect of turno7er
representing transactions in shares# or securities listed on a registered stoc! exchange/9
'
8+3A- $he pro7isions of su0-sections +3-# +3A-# +:A- and +)D- of section ;@ shall not appl to an person
ma!ing pament to National 2n7estment +Mnit- $rust or a mutual fund esta0lished 0 the 2n7estment
,orporation of Pa!istan or an in7estment compan registered under the 2n7estment ,ompanies and
2n7estment Ad7isers Rules# '()' or a unit trust scheme constituted 0 an Asset .anagement ,ompan
registered under the Asset .anagement ,ompanies Rules# '((;/9
8 9
[.llowance of perquisites paid by certain corporations.
+4- $he pro7isions of clause +i- of section 3: shall not appl to an expenditure incurred 0 a 0an!ing
compan or a financial institution owned and controlled 0 the %ederal Eo7ernment on the pro7isions of
per5uisites# allowances or other 0enefits to an emploee in pursuance of an law/9
[Certain provisions of t"e <rdinance not to apply in t"e case of Fu%i Fertili9er Co(pany *i(ited.
'
,l/ +3A- ins/ 0 %/A/'(((/
201
+:- $he pro7isions of sections == and =( of the "rdinance shall not appl up to the date of finalisation of
the assessment for the assessment ear '(='-=3 or an preceding assessment ears in the case of foreign
contractors# consultants and their expatriate emploees engaged 0 the %uCi %ertiliHer ,ompan *imited
where the said compan has underta!en to pa their tax lia0ilit/9
8+;- $he pro7isions of section '4# ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
in7ested in the ac5uisition of Special National %und Aonds issued under the Special National %und Aonds
Rules# '(=;;
+<- $he pro7isions of section '4# ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
in7ested in the ac5uisition of %oreign Exchange Aearer ,ertificates issued under the %oreign Exchange
Aearer ,ertificates Rules# '(=;8199
8+<A- $he pro7isions of section '4# ,hapter D2 or ,hapter D22 shall not appl in respect of an amount of
foreign exchange deposited in a pri7ate foreign currenc account held with an authorised 0an! in Pa!istan
in accordance with the %oreign ,urrenc Accounts Scheme introduced 0 the State Aan! of Pa!istan/9
'
8Pro7ided that the exemption under this clause shall not 0e a7aila0le in respect of an incremental
deposits made on or after the '<
th
da of Decem0er# '((( in such accounts held 0 a resident person or in
respect of amounts deposited in accounts opened on or after the said date 0 such person9/
8+<A- $he pro7isions of section '4# ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
in7ested in the ac5uisition of M/S/ Dollar Aearer ,ertificate issued under the M/S/ Dollar Aearer
,ertificates Rules# '(('/9
3
8+<,- $he pro7isions of section '4# ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
in7ested in the ac5uisition of >$hree-Lears %oreign ,urrenc Aearer ,ertificates? issued under the
%oreign ,urrenc Aearer ,ertificate Rules# '(()/9
4
8+<D- $he pro7ision of section '4 or section <; or ,hapters D2 and D22 shall not appl in respect of with
drawn or assets created out of such withdrawal in rupees from pri7ate foreign currenc accounts or
encashment of %oreign Exchange Aearer ,ertificates# M/ S/ Dollar Aearer ,ertificates and %oreign
,urrenc Aearer ,ertificates;9
8+<E- $he pro7isions of section '4 or ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
in7ested in ac5uisition of ownership or management and control of an state owned enterprise pri7atiHed
0 the Eo7ernment819
Pro7ided that the exemption under this clause shall not 0e a7aila0le on or after '<
th
da of
Decem0er# '(((]9

+<%- $he pro7isions of section '4 or ,hapter D2 or ,hapter D22 shall not 0e appl in respect of an
amount in7ested in purchasing of an land or an other assets sold through pu0lic auction 0 %ederal
Eo7ernment or a pro7incial Eo7ernment or a 0od esta0lished or controlled 0 such Eo7ernment/
'
Pro7iso ins/ 0 SR" No/'4::+2-U(@# dated '<-'3-'(((
3
,l/ +<,- ins/ 0 SR" No/'''+2-U(=# dated '(-3-'((=/
4
,l/ +<D- su0s/ 0 SR" =)'+2-U(=# dated ;-=-'((=/ Earlier ins/ 0 SR" No/ ;'<+2-U(=# dated ;-<-'((=/
202
'
8+<%A- $he pro7isions of section '4 or ,hapter-D2 or ,hapter D22 of the 2ncome $ax "rdinance# '()(
+DDD2 of '()(-# shall not appl in respect of an amount in7ested in purchase of an plots of *and sold
0 the ,apital De7elopment Authorit # 2slama0ad through pu0lic auctions conducted on the '<th# ')th#
34rd and 3<th das of %e0ruar# '((=/9
+<E- $he pro7isions of section '4 or ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
in7ested 0 a sponsor or an original allottee in the purchase of shares of a compan owning and managing
an industrial underta!ing specified in rule ;A of the $hird Schedule/9
3
8+<H- $he pro7isions of sections '4 or ,hapter D2 or ,hapter D22 shall not appl in respect of an
amount in7ested in the purchase of assets auctioned or sold as a conse5uence of a court order or decree in
a case filed 0 a 0an!ing compan or a D%2 whose management or control 7ests in the %ederal
Eo7ernment;9
4
8+<HA- $he pro7isions of section '4 and ,hapters D2 and D22 shall not appl in respect of an amount
in7ested 0 a %oreign ,urrenc Account holder in the purchase of Special M/ S/ Dollars Aonds# issued
under the Special M/ S/ Dollars Aonds Rules# '((=;
:
8+<HA- $he pro7isions of section '4# ,hapters D2 and D22 of this "rdinance shall not appl in
respect of an amount paid the '<
th
No7em0er# '(((# towards the settlement of de0t owed to a 0an!ing
compan or a financial institution or 0 wa of an tax or other Eo7ernment dues/9
;
8 9
8+=- $he pro7isions of section '4# ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
in7ested in the purchase of shares of a compan owning and managing a industrial underta!ing the profits
and gains from which are exempted under clause +''=,- or clause +''=D- or clause +''=E- of Part 2 of
this Schedule19
+=A- $he pro7isions of section '4# ,hapter B2 and ,hapter D22 shall not appl in respect of an amount as
is in7ested in the new li7estoc!# dair and poultr farms the income of which is exempted under clause
+'@3A- of Part 2 of this Schedule/9
8+(- $he pro7isions of section =@, in so far as the relate to paments on account of the suppl of goods
on which tax is deducti0le under su0-section +:- of section ;@ shall not appl in respect of an person#
0eing a manufacturer of such goods# 8unless he opts for9 the presumpti7e tax regime1
8Pro7ided that a declaration of option is furnished in writing within three months of the commencement of
the income ear and such declaration shall 0e irre7oca0le and shall remain in force for three ears/9
8Pro7ided further that nothing contained in this clause shall appl to an manufacturer of goods for which
special rates of deduction of tax are specified under clause +c- of su0-section +:- of section ;@/9
'
,l/ +<%/ A/ '(- ins/ 0 SR" (='+2-U(=# dated ':-(-'((=/
3
,l// +<H- ins/ 0 SR" =3( +2-U(=# dated 33-)-'(==/
3
,l/ +<HA- ins/ 0 SR" =)'+2-U(=# dated ;-=-'((=/
44
,l/ +<HA- ins/ 0 SR" '');+2-U((# dated ''-''-'(((/
:
;
,l/ +)- omitted 0 %/ "/ 3@@@/
203
8+(A-$he pro7isions of section =@, shall not appl in respect of a non-resident person 8 9 8unless he opts
for9 the presumpti7e tax regime1
8Pro7ided that a declaration of option is furnished in writing within three months of the commencement
of the income ear and such declaration shall 0e irre7oca0le and shall remain in force for three ears/9
'
8+(A- $he pro7isions of section =@, in so far as the relate to the paments on account of the suppl of
goods on which tax is deducti0le under su0-section +:- of section ;@ shall not appl to an person# 0eing
an importer of goods# from whom tax is collecta0le under su0-section +;- of section ;@ if supplies are
made 0 the same importer under the same name and title and he opts out of the presumpti7e tax regime1
Pro7ided that a declaration of final and irre7oca0le option is furnished in writing alongwith the
return of total income under section ;;1
Pro7ided further that nothing contained in this clause shall appl to an manufacturer of goods for
which special rates of deduction of tax are specified under clause +c- of su0-section +:- of section ;@1
Pro7ided also that the aggregate o7erall tax lia0ilit in respect of such goods shall not 0e less than
8fi7e9 percent of the 7alue of goods supplied/9
8+'@- $he pro7isions of su0-section +:- of section =@, in so far as the relate to paments on account of
suppl of rice to the Rice Export ,orporation of Pa!istan on which tax has 0een deducted under su0-
section +:- of section ;@ during the period from first da of Septem0er# '(=( and the thirtieth da of
August# '((@# shall not appl to an assessee 0eing a supplier of such rice# in respect of the assessment
ear commencing on the first da of &ul# '(('/9
3
8+'@A- $he pro7ision of su0-section +)D- of section ;@ shall not appl in respect of profit or interest paid
on a $erm %inance ,ertificate held 0 a compan which has 0een issued on# or after# the first da of &ul#
'(((/9
4
8+'@,- $he pro7isions of su0-section +3- of section ;@ shall not appl to an pament made 0 wa of
interest earned 0 0an!s on %oreign ,urrenc Aearer ,ertificates issued under the $hree-Lears %oreign
,urrenc Aearer ,ertificate Rules# '(()# discounted 0 them and held in their own portfolios/9
8+''- $he pro7isions of section =@D shall not appl to the oil distri0uting companies namel +'- Pa!istan
Aurmah Shell *imited# Qarachi# and +3- Pa!istan State "il ,ompan *imited# Qarachi# for the purposes of
assessment of their income and determination of tax thereon# in respect of an of the income ears
rele7ant to the assessment ears commencing on the first da of &ul# '(('# and ending on the thirtieth da
of &une# '((4/9
8+'3- $he pro7isions of clause +4@- of section 3 in so far as these relate to the application of rate of tax
under su0-paragraph +4- of Paragraph A of Part 2B of the %irst Schedule shall not appl to an indi7idual
0eing-
'
,l/ +(A- ins/ 0 %/A/'((</
3
,l/+'@A- su0s/ A %/ "/ 3@@'/ Earlier su0s/ 0 SR" ')'+2-U(=# dated ')-4-'((=/ Earlier ins/ 0 SR" )@4+'-U()# dated '4-(-
'(()/
4
,l/+'@,- ins/ 0 SR" ''' +'- U(=# dated '(-3-'((=/
204
+i- a Eo7ernment ser7ant staing a0road on official assignment or with the permission of the
%ederal Eo7ernment or Pro7incial Eo7ernment; and
+ii- a Pa!istani student# teacher or scholar staing a0road for studies or research 8 9
S+iii- a Pa!istani national who is not resident in Pa!istan in an ear and not earning an income
a0roadT/9
8+'4- $he pro7isions of section =@D# in so far as the relate to turno7er on account of sale of petrol and
diesel# shall not appl to an assessee 0eing a registered firm dealing in petroleum products for the
purposes of assessment of its income and determination of tax thereon# in respect of an income ear
rele7ant to the assessment ear commencing from the first da of &ul# '((3# and ending on the thirtieth
da of &une# '((4/
8+':- $he pro7isions of section =@D# in so far as the relate to turno7er on account of sale of petroleum
and petroleum products shall not appl to petroleum dealers# notwithstanding there status as a compan# a
registered firm or an indi7idual# engaged in retail sale of petroleum and petroleum products through petrol
pumps for the purposes of assessment of their income and determination of tax thereon1
Pro7ided that this exemption shall not appl to the sale of petroleum and petroleum products through
petrol pumps which are directl operated or managed 0 companies and registered firms engaged in
distri0ution of petroleum and petroleum products/
Explanation/- %or the remo7al of dou0t it is declared that the companies and registered firms engaged in
distri0ution of petroleum and petroleum products other than through petrol pumps shall not 0e entitled to
the 0enefits of this exemption/9
8+';- $he pro7isions of section =@D shall not appl to Hu0 Power ,ompan *imited so far as the relate
to its receipts on account of sale of electricit/9
8+'<- $he pro7isions of su0-sections +:- and +;- of section ;@ and section =@, shall not appl to tractors
imported and supplied 0 the Agricultural De7elopment Aan! of Pa!istan or 0 the importers authoriHed
0 the .inistr of %ood# Agriculture and *i7estoc! or the Agricultural De7elopment Aan! of Pa!istan
under the Awami $ractors Scheme/9
8+'<- A compan registered and authorised 0 the %ederal Eo7ernment to import gold and sil7er shall 0e
lia0le to pa tax on import of gold at the rate of two rupees per ele7en grams six hundred and sixt-four
milligrams and fi7e rupees per !ilogram in the case of sil7er in accordance with the pro7isions of su0-
section +;- of section ;@ and such pament of tax shall 0e deemed to 0e full and final lia0ilit of tax in
respect of income accruing from such import including lia0ilit of tax under section =@, and =@D/9
8+')- $he pro7isions of su0-section +;- of section ;@ shall not appl to goods or classes of goods imported
0 contractors and su0-contractors engaged in the execution of power proCect under the agreement
0etween the 2slamic Repu0lic of Pa!istan and Hu0 Power ,ompan *imited/
'
8 9
'
,l/ +')A- omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A// '(((/
205
'
8+')A- $he pro7isions of su0-section +;- of section ;@ shall not appl to such speciall e5uipped motor
7ehicle or support e5uipment imported 0 a disa0led person# as is allowed 0 the %ederal Eo7ernment/
+'),- $he pro7ision of su0-section +;- of section ;@ shall not appl in case of such goods imported into
Pa!istan as are exempt from customs dut and sales tax under SR"s 4<@+2-U3@@@# 4<3+2-U3@@@ and
4<4+2-U3@@@ dated ')/</3@@@/9
+'=- $he pro7isions of section =@D shall not appl to Hu0 Power ,ompan *imited so far as the relate to
its receipts on account of sale of electricit/9
8+'(- $he pro7isions of section ;@ read with sections =@, and =@,, of the 2ncome $ax "rdinance# '()(#
shall not appl to Expo ,enters *imited in respect of income for the period of exemption under clause
+';:A- of Part 2 of this Schedule/9
8+3@- $he pro7isions of section =@D shall not appl to companies# 5ualifing for exemption under clause
+')<-
3
8 9 of Part-2 of this Schedule# in respect of receipts from sale of electricit/9
8+3'- $he pro7isions of sections ;@ and section =@D shall not appl to the institutions of the Agha Qhan
De7elopment Networ! +Pa!istan- listed in Schedule ' of the Accord and Protocol dated No7em0er '4#
'((:# executed 0etween the Eo7ernment of the 2slamic Repu0lic of Pa!istan and Agha Qhan
De7elopment Networ!1
Pro7ided that such institutions shall continue to collect and deduct tax under section ;@ from others
persons# where7er re5uired thereunder8199
8Pro7ided further that in respect of application of section =@D# this clause shall ta!e effect from the
4
8'
st
da of &ul# '(('9/9
8+33- $he pro7isions of su0-section +;- of section ;@ shall not appl to 7ehicles imported under the
Lellow-,a0 Scheme and sold to ser7ing and retired ci7il and armed forces personnel/9
8+34- $he pro7isions of section =@D# shall not appl to local authorities# 5ualifing for exemption under
clause +==- and other than corporate# Eo7ernment or semi-Eo7ernmental 0odies# not otherwise lia0le to
income tax1
Pro7ided that nothing contained in this clause shall 0e construed to authoriHe an refund of tax alread
paid or the collection of an outstanding demand created under the said section/
:
8 9
+3;- $he pro7isions of section '4# ,hapter D2 and ,hapter D22 shall not appl for assessment ear '((<-
()# in respect of in7estment in 0usiness made 0 a new assessee lia0le to assessment under a scheme made
under clause +c- of su0-section +'- of section ;(,/
'
,l/ +')A- J +'),- ins/ 0 %/ "/ 3@@@/
3
Words >and clause +')=-? omitted 0 %/ "/ 3@@'/ Earlier ins/ 0 %/A/ '((;/
4
Su0s/ for words >')
th
Septem0er# '((3? 0 SR" (:'+2-U(=# dated '-(-'((=/
:
,l/+3:- omitted 0 %/ "/ 3@@@/ Earlier ins/ 0 %/ A/ '((</
206
+3<- An expatriate indi7idual# who 0 7irtue of his sta in Pa!istan in connection with his emploment
0ecomes a resident# shall not 0e lia0le to tax in respect of income accruing or arising to him outside
Pa!istan other than the income deri7ed from a 0usiness controlled in or a profession or 7ocation set up in
Pa!istan or unless it is 0rought into or recei7ed in Pa!istan 0 him during such income ear/9
8+3)- $he pro7isions of section =@D shall not appl to the assessee exempted from tax under clause +'=3-
of Part 2 of this Schedule for the period the said assessee continues to 0e entitled to the 0enefit of the
exemption under that clause/9
8+3=- 2n the case of companies engaged in the manufacture of fertiliHers# the pro7isions of clause +c- of
su0-rule +'- of rule ; of the $hird Schedule shall appl with effect from the income ear commencing on
or after the 'st da of &ul# '((</9
8+3(- $he pro7isions of section =@D shall not appl to Pa!istan Red ,rescent Societ/9
8+4@- $he pro7isions of su0-section +3- and +)D- of section ;@ and section =@D shall not appl to non
residents# +excluding local 0ranches or su0sidiaries or offices of foreign 0an!s# companies# associations of
persons or an other person operating in Pa!istan-# in respect of their receipts from Pa! rupees
denominated Eo7ernment and corporate securities and redeema0le capital# as defined in the ,ompanies
"rdinance# '(=: +D*B22 of '(=:-# listed on a registered stoc! exchange# where the in7estments are made
exclusi7el from foreign exchange remitted into Pa!istan through a Special ,on7erti0le Rupee Account
maintained with a 0an! in Pa!istan/9
+4'- $he pro7isions of section '4# ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
deposited in the ParH-e-Hasna Scheme under the Prime .inisterGs %und for National De0t Retirement/
'
8+4'A- $he pro7isions of section '4# ,hapter D2 or ,hapter D22 shall not appl in respect of an amount
donated to the National Self Reliance %und;9
YY
3
8+43-/ Su0Cect to the conditions as specified in clause +'=:- of Part 2 of the Second Schedule# the
pro7isions of section =@D shall not appl to a special purpose 7ehicle formed for the purpose of
securitiHation/
4
8+43- $he pro7isions of section =@D shall not appl to the companies specified in entries +'';A- and
+'';,- of Part-2 of the Schedule for the assessment ears '((=-((# '(((-3@@@ and 3@@@-3@@'/9
+43A- $he pro7isions of section =@D shall not appl to special purpose# non-profit companies engaged in
securitiHing the recei7a0le of Pro7incial Eo7ernments or the companies/9
:
8+43A- $he pro7isions of section =@D shall not appl to a charita0le institution which is appro7ed under
clause +d- of su0-section +'- of section :) or clause +<3- or is included in clause +<3- or clause +('- of
Part-2 of the Second Schedule to this "rdinance/
+43,- $he pro7isions of section =@D shall not appl to an assessee who 5ualifies for exemption under
clause +')(- of Part-2 of the Second Schedule to this "rdinance/9
'
,l/ +4'A- ins/ 0 SR" ;3(+i-U()# dated 33-4-()/
3
,ls/ +43- J +43A- ins/ 0 %/A/ '(((/
4
,l/+43- ins/ 0 SR"'<(+2-U(=# dated <-4-'((=/
:
,ls/ +43A- J +43,- ins/ 0 %/ "/ 3@@@/
207
'
8 9
8+43%- YY
3
8+43E-/ Nothing in section =@D shall appl to ,orporate and 2ndustrial Restructuring ,orporation/9
8+44- $he pro7isions of su0-section +:- of section ;@# far as the relate to o0ligation of registered firm to
deduct tax# shall not appl to a registered firm whose capital +total of closing 0alances of capital accounts
of partners - as per the 0alance sheet in respect of the latest assessment ear is less than one million
rupees1
Pro7ided that# this exemption shall cease to 0e applica0le to a registered firm if# at the end of an income
ear# its capital exceeds the aforementioned amount/9
4
8+44A- $he pro7isions of su0-section +:- of section ;@ shall not appl to paments recei7ed 0 Pa!-Ara0
Refiner *imited on account of suppl of its products/9
:
8+ 4:- $he pro7isional of clause +ff- of section 3: shall not appl in respect of paments made on account
of -

+a- transactions which do not exceed fi7e thousand rupees#
+0- an amount credited 0 direct transfer of funds to the assessee emploeeGs 0an! account for
reim0ursement of expenses incurred on 0ehalf of such assessee#
+c- freight charges or passenger fare to an airline or railwas or a goods carriage compan ;
and
+d- discharge of a statutor o0ligation li!e pament of duties taxes# octroi# tax fines# fees# cases
or le7ies/

+4;- Notwithstanding anthing contained in clause +fff- of section 3:#the pro7isions of the said clause
shall not to an salaries except salar exceeding Rs/ ;#@@@ per month which is not paid through a crossed
che5ue or 0 direct transfer of funds to such emploeeGs account/
+4<- $he pro7isions of su0-section +)%- of section ;@ shall not appl where the su0scri0er is non-
taxa0le charita0le institution/;
+4)- $he pro7isions of su0-section +:- of section ;@ shall not appl to an indirect exporter as defined in
the
;
8Dut and $ax Remission for Export Rules# 3@@'# issued under Notification No/S/R/"/'=; +2-U3@@'#
dated the 3'st .arch# 3@@'9/

<
8+4)A- $he pro7isions of su0-section +:- of section ;@ shall not appl to an manufacturer-cum-exporter
as a paer/9
'
,l/ +43- omitted 0 %/ "/ 3@@'/ Earlier ins/ 0 YY
3
,l/ +43E- ins/ 0 %/ "/ 3@@'/
4
,l/+44A- ins/ ibid.
:
,ls/ +4:- to +4<- ins/ 0 SR" =:= +'- U(=# dated 3;-)-'((=/
;
Su0s/ for certain words etc 0 SR" 3''+2-U3@@' dated 4-:-3@@'
<
,l/+4)A- ins/ 0 %/A/'(((/
208
ZZ
+4=- $he pro7isions of su0-section +;- of section ;@ shall not appl to goods imported 0 direct and
indirect and exporters co7ered under ;-
+i- the .anufacturing in Aond Rules # '(() issued under Notification No/ S/R/"/ '':@+2-U() #
dated the <th No7em0er# '(() ;

+ii- the ,ommon Aonded Warehouse +,on7entional- Rules# '((= issued under Notification No/
S/R/"/ =::+2- U(=# dated 34 rd &ul# '((=; and

+iii-
'
8the Dut and $ax Remission for Export Rules# 3@@'# issued under Notification
No/S/R/"/'=; +2-U3@@' dated the 3'st .arch# 3@@'9;9
3
8+4(- the pro7isions of su0-section +3- of section ;@ shall not appl in respect of an amount paid as
interest or profit on Special M/ S/ Dollar Aonds issued under the Special M/ S/ Dollar Aonds Rules# '((=/
+:@- $he pro7isions of su0-section +3A- and +)D- of section ;@ shall not appl to Pa! rupee accounts or
certificates referred to in clause+)=E- of Part ' of this Schedule;9
+:'- $he pro7isions of su0-section +)A- of section ;@ of the 2ncome $ax "rdinance# '()(# not appl to the
assets auctioned 0 Pro7incial Pri7atiHation Aoards/
4
8+:'A- $he pro7isions of su0-section +)A- of section ;@ of the 2ncome $ax "rdinance# '()(# shall not
appl to the sale of surplus land made 0 Pa!istan Railwa through pu0lic auction/9
:
8+:'A- $he pro7isions +)A- of section ;@ of the 2ncome $ax "rdinance# '()(# shall not appl to the
pri7atisation ,ommission in respect of sale of pu0lic sector units# 0 pu0lic auction# made on or after the
33nd da of &anuar# '(('/9
;
8+:3- $he pro7isions of su0-section +'- of section ;@ of the "rdinance# shall not appl # to an emploer in
so as the relate to deduction of the amount of surcharge paa0le under clause +d- of paragraph A of Part
222 of the %irst Schedule to the "rdinance# in respect of income for the income ear '((=-((/
+:4- $he pro7isions of section ;: and section == shall not appl# in respect of income chargea0le to tax
under clause +d- of paragraph A of Part 222 of the %irst Schedule to the "rdinance# pro7ided that the
emploer deducts and pas such amount in monthl instalments 0 the 4'st da of .a# '(((/9
<
8+::-$he pro7isions of su0-section +4A- of section :) shall not appl in case of donations made to Agha
Qhan Hospital and .edical ,ollege # Qarachi pro7ided that this clause effect from the '4thda of &une #
'((</
'
Su0s/ for certain words etc 0 SR" 3''+2-U3@@' dated 4-:-3@@'
3
,ls/+4(- J +:@- ins/ 0 SR" =)'# dated ;-=-'((=/
4
,l// +:'A- ins/ 0 SR" '444+2-U(=# dated 4@-''-'((=/
:
,l/ +:'A- ins/ 0 SR" '4=;+2-U(=# dated 3'-'3-'((=/
;
,ls/ +:3- J +:4- ins/ 0 SR" (:'+2-U(=# dated '-(-'((=/
<
,l/+::- ins/ 0 SR" (:'3+2-U(=# dated '-(-'((=/
209
'
8+:;- $he pro7isions of su0-section +<- of section ;@ of the 2ncome $ax "rdinance#'()(# shall not appl
to a person who produces certificate from the ,ommissioner of 2ncome $ax concerned to the effect his
income during the income ear is exempt from tax under the 2ncome $ax "rdinance# '()(/9
3
8+:<- $he pro7isions of su0-section +)A- of section ;@ of the 2ncome $ax "rdinance# '()(# shall not
appl to a person who produces a certificate from the ,ommissioner of 2ncome tax concerned to the
effecct that income during the income ear is exempt from tax under the 2ncome $ax "rdinance#'()(/9
4
8+:)- $he pro7isions of su0-section +)D- of section ;@ of the 2ncome tax "rdinance#'()(# shall not appl
to a person who produces a certificate from the ,ommissioner of 2ncome tax concerned to the effect that
his income during the income ear is exempt from tax under 2ncome $ax "rdinance#'()(/9
:
8+:=- $he pro7isions of su0-section +)E- of section ;@ of the 2ncome $ax "rdinance# '()(# shall not
appl to a person who produces a certificate from the ,ommissioner of 2ncome $ax concerned to the
effect that his income during the income ear is exempt from tax under the 2ncome $ax "rdinance#'()(/9
;
8+;@- $he pro7isions of su0-section +'- and +4A- of section ;@ of the 2ncome $ax "rdinance# '()(# shall
not appl to .Us ,rescent 2ndustrial ,hemicals *imited and .Us Siddi5 Sons $in Plate *imited in respect
of salaries of expatriate emploees #roalt or technological and !now-how fee for technical assistance for
proCects located in Special 2ndustrial Rone# Windher # Aalochistan # who ha7e esta0lished *U,s prior to the
4'st &anuar # '((</9
<
8+;'- $he pro7isions of the sections =@, shall not appl in so far as the relate to income from import and
suppl of palm oil or edi0le oil imported 0 $reading ,orporation of Pa!istan from .alasia under 2DA
Export %inancing Scheme to the extent of M/ S/ [ :: million and supplied to manufacturers of oil or ghee
for their own consumption according to their rated capacit on profit no loss 0asis/
+;3- $he pro7isions of su0-section +:- of section ;@ shall not appl in respect of suppl of palm oil or
edi0le oil 0 $reading ,orporation of Pa!istan 2mported from .alasia under 2DA Export %inancing
Scheme to the extent of M/ S/ [ :: million to manufacturers of oil or ghee for their own manufacturers
allocated to them on the 0asis of their rated capacit/
+;4- $he pro7isions of su0-section +;- of section ;@ shall not appl in respect of palm oil or imported 0
$rading ,orporation of Pa!istan imported from .alasia under 2DA Export %inancing Scheme to the
extent of M/S/ [ :: million# pro7ided that entire oil is allocated to manufacturers of oil Ughee for their own
manufacturing/9
)
8+;:- $he deduction of su0-section +;- of section ;@ shall not appl in respect of goods temporaril
imported into Pa!istan for su0se5uent exportation and which are exempt from customs dut under
Notification No S/R/"/ ='=+'-U(= dated (th August # '(=( and Notification No/ S/R/"/(;:+'-U(= dated )th
Septem0er# '((=/9
'
,l/ +:;- ins/ 0SR" '3<:+2-# dated 3-''-'((=/
3
,l/+:<-ins/ 0 SR" '3<;+2-# dated 3-''-'((=
4
,l// +:)- ins/ 0 SR" '3<<# dated 3-''-'((=/
:
,l/+:=- ins/ 0 SR" '3<=+2-# dated 3-''-'((=/
;
,l// +;@- ins/ 0 SR" '4@=# dated 3@-''-'((=/
<
,ls/ +;'- to +;4- ins/ 0 SR"+2-U(=# dated '4)@# dated ')-'3-'((=/
)
,l/ +;:- ins/ 0 SR" 4'+2-U((# dated ':-'-'(((/
210
'
8+;;-9 $he pro7isions of su0-section +;A- of section ;@ of the 2ncome $ax "rdinance# '()( shall not
appl to an amount recei7ed on encashment of an 0earer 0onds issued under the Special MS Dollar
Aonds Rules# '((=/9
3
8+;<- $he pro7isions of su0-section +:- of section ;@ of the 2ncome $ax "rdinance# '()(# shall not appl
in respect of paments recei7ed on account of suppl of petroleum products 0 Attoc! Petroleum
*imited/9
4
8+;)-/ $he pro7isions of su0-sections +3-# +3A- and +)D- of section ;@ shall not appl to special purpose
7ehicle for the purpose of securitiHation/9
8+;=- $he pro7isions of clause +7i- of Notification No/ SR" ;=4+2-U('# dated 4@
th
&une# '((('# shall not
appl to an importer 0eing an industrial underta!ing engaged in the manufacture of vanaspati ,"ee or oil/
8+;(-YY
8+i- a compan listed on Stoc! Exchange which distri0utes profit e5ual to either fort per cent of
its after tax profits or fift per cent of its paid up capital# whiche7er ma 0e the less;9
'
,l/ +;;- ins/ 0 SR" ';(+2-U((# dated (-4-'(((/
3
,l/ +;<- ins/ 0 SR" 4@<+2-U((# dated 4-:-'(((/
4
,ls/ +;)- J +;=- ins/ 0 %/A/'(((/
211
THE THIRD SCHEDALE
+See Section 34-
RALES FOR THE COMPATATION OF DEPRECIATION ALLODANCE
'/ Allowances for depreciation/- 8+'- Where# in an income ear# an 0uilding# machiner# plant or
furniture owned 0 an assessee is used for purposes of an 0usiness or profession carried on 0 him# or in
an income ear commencing on or after the first da of &ul# '(=3# an machiner or plant is gi7en on
lease 0 the assessee# 0eing a scheduled 0an!# a financial institution Sor such modara0a or leasing
compan as isT appro7ed 0 the ,entral Aoard of Re7enue for purposes of this Schedule# on such
conditions as ma 0e specified# an allowance for depreciation shall 0e made in computing the profits and
gains of the 0usiness or profession of the assessee in the manner hereinafter pro7ided/9
8+'A- $he pro7isions of su0-rule +'- shall in the li!e manner appl to a 0uilding gi7en on lease in an
income ear commencing on or after the first da of &ul# '(=<# pro7ided that the said 0uilding is used 0
the lessee for the purposes of his 0usiness or profession/9
+3- Where an such 0uilding# machiner# plant or furniture is not wholl used for the purposes of the
0usiness or profession# the allowance under su0-rule +'- shall 0e restricted to the fair proportional part of
the amount which would 0e admissi0le if such 0uilding# machiner# plant or furniture were wholl so
used/
+4- No allowance under this rule shall 0e made unless-
+a- 8at the time of filing a return of total income9 such particulars as ma 0e prescri0ed and such
further information or documents as the Deput ,ommissioner ma re5uire# are furnished; and
+0- such 0uilding# machiner# plant or furniture has 0een so used 8 9 during the income ear/
8+4A- Where an 0uilding# furniture# machiner or plant is used for the purposes of 0usiness or profession
during an income ear for which the income from such 0usiness or profession is exempt from tax#
depreciation admissi0le under su0-rule +'- shall 0e deemed to ha7e 0een allowed in respect of the said
income ear and after expiration of the exemption period written down 7alue of such assets shall 0e
determined in accordance with su0-clause +ii- of clause +0- of su0-rule +)- of rule =/9
8+:- No allowance under this rule shall 0e made in respect of a machine referred to in clause +xx- of su0-
section +'- of section 34/9
3/ Rates of depreciation allowance/- +'- $he allowance under rule ' shall 0e computed at the rates
specified in the $a0le annexed hereto1-
TA@LE
,lass of asset Description Rate per cent of the written
down 7alue
\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
212

' 3 4
AM2*D2NE
2/ Auilding +not otherwise specified- ;V +general rate-
22/ %actor or wor!shop +excluding '@V
godown and offices-
22A/ Residential 5uarters for la0our '@V
%MRN2$MRE
222/ %urniture '@V
.A,H2NERL AND P*AN$
2B/ .achiner and plant +not otherwise '@V +general rate-
specified-
2BA $echnical or professional 0oo!s 3@V
2BAA/ Personal computer hardware 4@V
B/ Ships
+i- New ;V
+ii- Second hand1 Age at time of purchase

+a- Not more than '@ ears '@V

+0- .ore than ten ears 3@V
B2/ Aatteries# D-Ra and electrotherapeutics 3@V
apparatus and accessories
'
8B2A/ *a0orator e5uipment used in educational 3;V9
institutions

B22/ .achiner used in production and 3@V
exhi0ition of cinematograph films
B222/ .otor 7ehicles# all sorts 3@V
'
Entr >2BA? ins/ 0 %/ "/ 3@@'/
213
2D/ Aircraft# aeroengines J aerial 4@V
photographic apparatus
D/ .oulds used in manufacture of glass 4@V
or concrete pipes
D2/ Aelow ground installations in mineral '@@V
oil concerns the income of which is
lia0le to 0e computed in accordance
with rules contained in Part 2 of the
%ifth Schedule/
8D22/ Aelow ground installations# including '@@V
0ut not limited to the cost of drilling#
casing# cementing# logging and testing
of wells# in off-shore mineral oil con-
cerns the income of which is lia0le to
0e computed in accordance with the
rules contained in Part 2 of the %ifth
Schedule/
D222/ "ff-shore platforms and production 3@V9
installations in mineral oil concerns
the income of which is lia0le to 0e
computed in accordance with the rules
contained in Part 2 of the %ifth Schedule/
;. Extr! "e+re#i!tio !llo/!#e &or $0lti+le 'hi&t /or-i2/- +'- 2n the case of machiner and plant# to
which the general rate applies# an extra depreciation allowance# e5ual to fift per cent of the allowance
computed under su0-rule +'- of rules 3 shall 0e allowed on account of dou0le shift wor!ing and hundred
percent of such allowance on account of triple shift wor!ing/
+3- $he extra depreciation allowance under su0-rule +'- shall 0e proportionate to the num0er of das
during which the dou0le or triple shifts are wor!ed# and# for the purpose of computing this allowance# the
normal wor!ing das throughout the ear shall 0e ta!en as three hundred/
+4- $he pro7isions of su0-rules +3- and +4- of rule ' shall# so far as ma 0e# appl to this rule as the appl
to the said rule/
6. De+re#i!tio ot to .e !llo/e" i #!'e' /here the #o't o& ree/!l or re+l!#e$et i' !llo/e"/- +'-
Notwithstanding anthing contained in this "rdinance# no allowance under rule ' or rule 4 shall 0e made
in the case of an asset falling under the description 6.achiner and Plant6 the normal useful life of which
does not exceed one ear; 0ut the cost of renewal or replacement thereof shall 0e allowed as a re7enue
expenditure/
9. Iiti!l "e+re#i!tio/- +'- Where an 0uilding has 0een newl erected# or an machiner or plant has
0een installed# in Pa!istan at an time 0etween the first da of &ul# '()<# and the thirtieth da of &une#
83@@@9 +0oth dates inclusi7e-# further depreciation allowance in respect of the ear of erection or
installation or the ear in which such 0uilding# machiner or plant is used 0 the assessee for the first time
214
for the purposes of his 0usiness or profession or the ear in which commercial production is commenced#
whiche7er is the later# shall 0e allowed at the following rates# namel1-
Rates
+a- in the case of residential 0uilding for industrial la0our
the erection of which is 0egun and completed 0etween the
first da of &ul# '()( and the thirtieth da of &une# '(('
+0oth dates inclusi7e-/
$went-fi7e per cent of
the written down 7alue/
Explanation/- $he expression Kresidential 0uilding for
industrial la0our means 0uilding constructed for use as
dwelling houses 0 wor!men and other persons# emploed
on monthl wages not exceeding one thousand rupees in an
industrial underta!ing which fulfils the conditions specified
in clauses +a-# +d- and +e- of su0-section +3- of section := or
an other industrial underta!ing which is appro7ed 0 the
,entral Aoard of Re7enue for the purposes of this rule/
8+aa- in the case of a 0uilding gi7en on lease 0 the assessee#
0eing a scheduled 0an!# a financial institution Sor such
modara0a or leasing compan as isT appro7ed 0 the
,entral Aoard of Re7enue for purposes of this Schedule# on
or after the first da of &ul# '(=<# if the said 0uilding is
used 0 the lessee for purposes of his 0usiness or
profession/
$en per cent of the
written down 7alue/9
8+aaa- in the case of a 0uilding owned and used 0 an
educational institution/
3; per cent of the written
down 7alue/
+0- in the case of other 0uilding/ $en per cent of the
written down 7alue/
+c- in the case of machiner or plant +other than 8D-Ra and
electrotherapeutic apparatus 8 9and accessories# or9 ships or
motor 7ehicles not pling for hire/
8Pro7ided that in addition to the initial depreciation
allowance dmissi0le under this clause to an industrial
underta!ing# an additional allowance of initial depreciation#
shall 0e admissi-0le for the next ear +following the first
ear of admissi0ilit of such allowance-# which1
+a- is set up after the 4@ &une# '((;; and
+0- manufactures engineering goods/9
$went-fi7e percent of
the writted down 7alue/
215
8Explanation/- As used in this clause# 6industrial
underta!ing6 has the same meaning as in the %irst Schedule/
8+cc- in the case of machiner or plant +other than ships or
motor 7ehicles not pling for hire-# gi7en on lease 0 the
assessee# 0eing a scheduled 0an!# a financial institution# or
such modara0a or leasing compan as is appro7ed 0 the
,entral Aoard of Re7enue for purposes of this Schedule# on
or after the first da of &ul# '(=3/
%ort per cent of the
written down 7alue and
in respect of an assess-
ment ear commencing
on or after the first da of
&ul# '(=( twent fi7e
per cent of the written
down 7alue/9
8+ccc- in the case of D-Ra and electrotherapeutic apparatus
and accessories/
%ort per cent of the
written down 7alue Sand
in respect of an assess-
ment ear commencing
on or after the first da of
&ul# '(=(# twent fi7e
per cent of the written
down 7alueT/9
+d- in the case of ships whose port of registr is in Pa!istan/ $hirt per cent of the
written down 7alue
8+e- in the case of li0rar 0oo!s owned and used 0 an
educational institution/
3; per cent of the written
down 7alue/9
+3- Nothing contained in su0-rule +'- shall appl in the case of-
+a- an road transport 7ehicle not pling for hire;8 9
+0- an machiner or plant which has pre7iousl 0een used in Pa!istan8;9
8+c- an 0uilding# plant or machiner owned or used 0 an industrial underta!ing to which
clause +''=A- of the Second Schedule applies; and
+d- a machine referred to in clause +xx- of su0-section +'- of section 34/9
+4- $he pro7isions of su0-rules +3- and +4- of rule ' shall# so far as ma 0e# appl to this rule as the appl
to the said rule/
9A. Fir't ,e!r Allo/!#e/- Where an machiner# plant and e5uipment
'
8# other than machiner# plant and
e5uipment entitled to first ear allowance under rule ;AA#9 is installed 0 an industrial underta!ing set up
in Pa!istan on or after the twent-first da of No7em0er# '(() and owned and managed 0 a compan
'
Words etc/ ins/ 0 %/ "/ 3@@'/
216
formed after the said date# exclusi7el for operating the said industrial underta!ing
'
8 9# further
depreciation 0 wa of %irst Lear Allowance in respect of the ear of installation or the ear in which
such machiner# plant or e5uipment is used 0 the assessee for the first time for the purposes of his
0usiness or profession or the ear in which commercial production is commenced# whiche7er is the later#
shall 0e allowed at the rates specified in the ta0le 0elow1-
TA@LE
A 2ndustries for the manufacture of leather +7alue added-#
textiles +7alue added -# footwear# surgical and sports
goods# carpets# electronics# soft# stuffed and 0atter
operated tos# froHen concentrated citrus Cuices# seafood
industr +farming# catching# processing and preser7ation
of fish# shrimp and other marine products -# mining and
7alue added mineral processing/
Eight per cent of
the written down
7alue /
A 2ndustries for the manufacture of process control
e5uipment or sstem# power and pneumatic tools#
powder metallurgical industr and manufacture of allos
and stainless steel# information technolog e5uipment#
solar technolog e5uipment and solar cell industr#
aerospace industr# defence production# hermetical
sealing technolog# minreal oil refining and hdro-
crac!ing and other 7alue added petroleum productsG
production industries/
Eight per cent of
the written down
7alue /
, +i- 2ndustries for the manufacture of the plants# machiner
and e5uipment including mining or mineral processing#
agricltural and earthmo7ing machiner# 7al7es and
controls for fluids and gas# high pressure or temperature
piping and fittings# specialiHed pumps for chemical or
petroleum industr# ele7ators or escalators# locomoti7es#
ship 0uilding# tur0ines# seamless high pressure gas
clinders/
Sixt-fi7e per cent
of the written down
7alue
, +ii- 2ndustries for the manufacture of ru00er and textile
chemicals# des# pigments# specialiHed paints or
coatings# 0asic manufacture of pesticides;
pharmaceutical raw materials; manufacture of 0asic
chemicals; fire-fighting foam# petrochemicals and their
down stream products +including fi0ers-# safet +auto-
glass# float glass# chloro-al!ali# fertiliHers# pulp and
paper +integrated unit-/
Sixt-fi7e per cent
of the written down
7alue/
, +iii- 2ndustries for the de7elopment and production of fi0er-
optic communication e5uipment# treatment and disposal
of toxic and haHardous and industrial wastes sewerage#
Sixt-fi7e per cent
of
the written down
'
Words >engaged in the manufacture of goods or materials or the su0Cection of goods or materials to a manufacturing process?
omitted 0 %/A/'(((/
217
effluent and solid waste management# water suppl#
la0orator# chemical or industrial ware# optical goods
and e5uipment# x-ra and photographic films#
manufacture of 0io-medical and medical diagnostic
e5uipment or de7ices# research and de7elopment
'
8#and
tourism# hotels and tourism related proCects# housing and
construction# infrastructure and agriculture proCects/9
7alue
D 2ndustries for the production of 5ualit and h0rid
seeds# edi0le oil extraction or refining# li7estoc! or
poultr feed# the written down integrated poultr
li7estoc! complex including the facilit# 7alue for
processing and pac!ing# mil! processing and mil!
products or dair products# fruits# 7egeta0les and
flowers-grading# pac!ing or processing etc/# agro-0ased
7alue-added products and chemicals# +e/g/ cotton# sugar
cane# rice# corn-0ased li!e cattle feed# cellulose and its
products# industrial alcohol# glcerine# fructose# furfural#
xlose# etc/-/
Sixt-fi7e per cent
of
the written down
E "ther industries
3
8including ser7ice#
4
8 9 social and
agricultural sector
:
8# other than the agriculture proCects
specified in entr , +iii- 9
%ort per cent of the
written down 7alue
;
8 9
<
8;AA/ Where an machiner# plant
)
8# other than machiner# plant and e5uipment entitled to a %irst Lear
Allowance under rule ;A or rule ;AA#9 and e5uipment +other than motor 7ehicles not pling for hire and
ships not 0eing fishing trawlers- is gi7en on lease for the first time on# or after# the first da of &ul# 3@@@# 0
an assessee 0eing an in7estment 0an! or a modara0a or a leasing compan# further depreciation 0 wa of
%irst Lear Allowance e5ual to thirt per cent of the written down 7alue shall 0e allowed to such assessee in
respect of the ear in which such machiner# plant or e5uipment +other than motor 7ehicles not pling for hire
and ships not 0eing fishing trawlers- is gi7en on lease for the first time on# or after# the first da of &ul# 3@@@1
Pro7ided that no allowance shall 0e admissi0le under this rule where such allowance has 0een a7ailed
pre7iousl under this rule or rules ;# ;A or ;A in respect of aforesaid asset/
Explanation/- %or the purposes of this rule the expression 6in7estment 0an!6 means a compan
incorporated under the ,ompanies "rdinance# '(=: +D*B22 of '(=:-# which has 0een granted a license 0 the
%ederal Eo7ernment to operate as an in7estment 0an!/
'
Words ins/ 0 %/ "/ 3@@'/
3
2ns/ 0 %/A/'(((/
4
Word >infrastructure? omitted 0 %/ "/ 3@@'/
:
Words etc/ ins/ 0 %/ "/ 3@@'/
;
Entr % deleted 0 %/ "/ 3@@@/
<
Rule ;AA added 0 %/ "/ 3@@'/
)
Words etc/ ins/ 0 %/ "/ 3@@'/
218
9@. Re1I5e't$et Allo/!#e.- Where an expenditure or in7estment is made 0 an industrial
underta!ing on or after the twent first da No7em0er # '(() for the purposes of 0alancing# moderiHation
and replacement +A.R- and expansion of the machiner and plant alread installed therein# further
depreciation allowance e5ual to fort per cent of the written down 7alue shall 0e allowed in respect of the
ear in which such machiner# plant or e5uipment is used 0 the assessee for the first time for the
purposes of his 0usiness or profession or the ear in which commercial production is commenced#
whiche7er is the later /

9C . I"0'tri!l @0il"i2 Allo/!#e. -Where an industrial sheds or structures are erected 0 an
industrial underta!ing referred to in rule ;A# a further depreciation allowance shall 0e allowed e5ual to
twent per cent of the written down 7alue in respect of the ear of erection of such structures/
:. Li$it!tio !' to !llo/!#e &or "e+re#i!tio/- $he aggregate of the allowance for depreciation
allowed under this "rdinance and the repealed Act shall not exceed the original cost of an asset 8 9 as the
case ma 0e/
7. Di'+o'!l o& !''et' !" tre!t$et o& re'0lt!t 2!i' or lo''e'/- Notwithstanding anthing contained in
this "rdinance or the repealed Act# where# in an income ear#-
+a- an asset 8 9 is disposed of 0 an assessee# no allowance under rules '# 4# :#
'
8# ;# ;A# ;AA#
;A or ;,9 shall 0e made in respect thereof in that ear;
+0- an 8asset9 is disposed of 0 an assessee#-
+i- if the sale proceeds thereof exceed the written down 7alue# the excess shall 0e
deemed to 0e the income of the assessee of that ear chargea0le under the head
62ncome from 0usiness or profession6; and
+ii- if the sale proceeds are less than the written down 7alue# the deficit shall 0e deemed
to 0e an expenditure deducti0le from the profits and gains of the 0usiness or
profession of that ear;89
8 9
and the 0usiness or profession for the purposes of which the said 8asset9 was used 0efore its disposal# shall
0e deemed to 0e carried on 0 the assessee during that ear and all the pro7isions of this "rdinance shall
appl accordingl1
8 9
=/ De&iitio'/- %or the purpose of this Schedule#-
8 9
+3- 6fair mar!et 7alue6 has the same meaning as in su0-section (4- of section 3(;
+4- 6furniture6 includes fittings;
'
&bid.
219
+:- 6plant6 means an ship# aircraft or 7ehicle registered in Pa!istan and includes 0oo!s +other than 0oo!s
in respect of which an allowance has 0een made under section :3 of this "rdinance or section ';% of the
repealed Act-# scientific apparatus and surgical e5uipment used for the purposes of 0usiness or profession;
+;- 6sale proceeds6 means-
+a- where the asset is actuall sold# the sale price thereof or the fair mar!et 7alue# whiche7er is
the higher;
+0- where the asset is transferred 0 wa of exchange# the fair mar!et 7alue of the asset
ac5uired through such transfer;
+c- where the asset is transferred otherwise than 0 sale or exchange# the consideration for such
transfer;
+d- where an asset is discarded# demolished# destroed or lost# the scrap 7alue# or the amount
realised 0 the disposal thereof together with an insurance# compensation or sal7age
mone recei7ed or recei7a0le in respect thereof;
+e- where the asset is compulsoril ac5uired under an law for the time 0eing in force in
Pa!istan# the compensation paid therefore;
+f- where the asset ceases to 0e used 0 the assessee for purposes of his 0usiness or profession#
the fair mar!et 7alue thereof at the time of such cessation;
+g- where the asset 8other than an asset to which su0-clause +h- or su0-clause +i- Sor su0-clause
+C-T applies#9 is exported or transferred outside Pa!istan# the original cost thereof# or the fair
mar!et 7alue at the time of export# whiche7er is the higher#
8+h- where an asset# after ha7ing 0een used in Pa!istan in the execution of a contract entered
into 0 the assessee 0efore the first da of &ul# '()(# is exported or transferred outside
Pa!istan# the original cost thereof less all depreciation allowed excepting the sum allowed
in pursuance of rule;;
+i- where an asset# not 0eing an asset to which su0-clause +C- applies# after ha7ing 0een used in
Pa!istan in the execution of a contract entered into 0 the assessee on or after the first da
of &ul# '()(# is exported or transferred outside Pa!istan the original cost thereof; and9
8+C- where an asset# after ha7ing 0een used in Pa!istan in the execution of a contract for
exploration and production of petroleum +such contract ha7ing 0een entered into 0 the
assessee on or after the first da of &ul# '(='-# is exported or transferred outside Pa!istan#
the original cost thereof less all depreciation allowed excepting the sum allowed in
pursuance of rule ;#
and in each such case# the asset shall# for purposes of rule )# 0e deemed to ha7e 0een disposed of 0 the
assessee19
220
8Pro7ided that in the case of a 0uilding the term 6sale proceeds6 shall mean an amount e5ual to the lower
of the following# namel1-
+a- original cost# and
+0- sale price or fair mar!et 7alue# whiche7er is higher1
Pro7ided further that# where the actual cost of a road transport 7ehicle is# in accordance with su0-clause
+a- of clause +=-# ta!en to 0e
'
8se7en hundred and fift thousand9 rupees# the sale proceeds thereof shall 0e
ta!en to 0e a sum which 0ears to the amount for which the said 7ehicle is sold together with an
insurance# sal7age or compensation mone recei7ed or recei7a0le or# as the case ma 0e# scrap 7alue in
respect thereof the same proportion as the said sum of
'
8se7en hundred and fift thousand9 rupees 0ears to
the actual cost of the said 7ehicle to the assessee had the said su0-clause not 0een applica0le to such
7ehicle1
SPro7ided also that in case of an asset leased 0 a scheduled 0an!# a financial institution or an modara0a
or leasing compan which is appro7ed 0 the ,entral Aoard of Re7enue the term 6sale proceeds6 shall
mean the residual 7alue recei7ed 0 such leasing compan on maturit of lease agreement with the first
lessee# su0Cect to the condition that the residual 7alue plus the amount realised during the currenc of the
agreement towards cost of the asset is not less than the original cost to the lessor/T
Explanation/- $he expression KsaleG# as used in the second pro7iso# includes a transfer 0 wa of exchange
or otherwise or a compulsor ac5uisition under an law for the time 0eing in force;9
+<- 6ship6 includes a steamer# motor 7essel# sail# tug# 0oat# iron or steel float for cargo# wooden cargo 0oat#
motor launch and speed 0oat;
+)- 6written down 7alue6 means-
8+a- in the case of a ship or an asset to which su0-rule +4- of rule 3 applies#-
+i- for purpose of rule )# as in su0-clause +0-# and
+ii- for an other purpose# the actual cost thereof to the assessee; and9
+0- in the case of other assets# 8 9-
+i- where the asset 8 9# was ac5uired in the income ear# the actual cost thereof to the
assessee; and
+ii- where the asset# was ac5uired 0efore the income ear# the actual cost thereof to the
assessee as reduced 0 the aggregate of the allowance for depreciation allowed to
him under this "rdinance or the repealed Act in respect of the assessments for
earlier ears/
+=- %or the purposes of 8clause +)-9#-
'
Words >six hundred thousand? su0s/ 0 %/ "/ 3@@'/
221
+a- in the case of road transport 7ehicles8# 0eing passenger transport 7ehicles#9 not pling for
hire# the actual cost to the assessee shall 0e deemed not to exceed
3
8se7en hundred and fift
thousand9 rupees;
+0- in computing the actual cost of an asset# the amount of an grant# su0sid# re0ate or
commission and the 7alue of an assistance +not 0eing in the nature of an loan repaa0le
with or without interest- recei7ed 0 an assessee from Eo7ernment or an other authorit
or person and an deduction or allowance admissi0le under this "rdinance or the repealed
Act shall 0e excluded;
+c- where# 0efore the date of ac5uisition 0 the assessee# an such asset had at an time 0een
used 0 an person for the purposes of his 0usiness or profession# the actual cost to the
assessee shall# except in an case where 8su0-clause +d-9 applies# 0e deemed not to exceed
the fair mar!et 7alue thereof;
+d- where an assessee has succeeded another person in 0usiness or profession# the written
down 7alue of an asset shall 0e computed as if no succession had ta!en place;
+e- where an assessee has ac5uired an plant or machiner +hereafter referred to as FassetG-
from a countr outside Pa!istan for installation in Pa!istan for the purposes of his 0usiness
or profession and# in conse5uence of a change in the rate of exchange at an time after the
ac5uisition of such asset and 0efore full and final repament of an foreign loan# there is an
increase or reduction in the lia0ilit of the assessee as expressed in Pa!istan currenc for
ma!ing pament towards the whole or a part of the mones 0orrowed 0 him from an
person directl or indirectl# in an foreign currenc specificall for the purposes of
ac5uiring the asset +0eing in either case the lia0ilit existing immediatel 0efore the date on
which change in the rate of exchange ta!es effect-# the amount 0 which the lia0ilit
aforesaid is so increased or reduced during the income ear shall 0e added to# or# as the
case ma 0e# deducted from the actual cost of the asset and the amount arri7ed at after such
addition or deduction shall 0e ta!en to 0e the actual cost of the asset;
+f- where the whole or an part of the lia0ilit aforesaid is met# not 0 the assessee# 0ut#
directl or indirectl# 0 an other person or authorit# the lia0ilit so met shall not 0e
ta!en into account for the purposes of 8su0-clause +e-9;
+g- where the assessee has entered into a contract with an authorised dealer for pro7iding him
with a specified sum in a foreign currenc on or after a stipulated future date at the rate of
exchange specified in the contract to ena0le him to meet the whole or an part of the
lia0ilit aforesaid# the amount# if an# to 0e added to# or deducted from the actual cost of
the asset or the amount of expenditure of a capital nature or# as the case ma 0e# the cost of
ac5uisition of the capital asset under this su0-clause shall# in respect of so much of the sum
specified in the contract as is a7aila0le for discharging the lia0ilit aforesaid# 0e computed
with reference to the rate of exchange specified therein; and
+h- for the purposes of ma!ing an assessment for the ear 0eginning on the first da of &ul#
'()(# the written down 7alue of such asset shall 0e increased or reduced 0 the amount 0
which the lia0ilit aforesaid was so increased or reduced during an income ear for the
3

222
assessment ear 0eginning on the first da of &ul# '(); or the first da of &ul# '()<# the
first da of &ul# '()) or the first da of &ul# '()=/
Explanation/- As used in this clause#-
+a- 6rate of exchange6 means the rate of exchange determined or recognised 0 the %ederal
Eo7ernment for the con7ersion of Pa!istan currenc into foreign currenc or foreign
currenc into Pa!istan currenc; and
+0- 6authorised dealer6# 6foreign currenc6 and 6Pa!istan currenc6 ha7e the same meaning as in
the %oreign Exchange Regulation Act# '(:) +B22 of '(:)-/
+(- $he pro7isions of clauses +;- and +)- shall# so far as ma 0e# appl to a class of assets as the appl to
an asset/
223
THE FOARTH SCHEDALE
+See section 3<+a-
RALES FOR THE COMPATATION OF THE PROFITS AND >AINS OF INSARANCE
@ASINESS.
'/ Pro&it' o& li&e i'0r!#e to .e #o$+0te" 'e+!r!tel,/- $he profits and gains of an assessee carring on
life insurance 0usiness shall# from whate7er source deri7ed# 0e chargea0le under the head 62ncome from
0usiness or profession6 and shall 0e computed separatel from his income from an other 0usiness/
3/ Co$+0t!tio o& +ro&it' !" 2!i' o& li&e i'0r!#e .0'ie''/- $he profits and gains of life insurance
0usiness 8 9 shall 0e ta!en to 0e the annual a7erage of the surplus arri7ed at 0 adCusting the surplus or
deficit disclosed 0 the actuarial 7aluation made for the last inter-7aluation period ending 0efore the ear
for which the assessment is to 0e made# so as to exclude from it an surplus or deficit included therein
which was made in an earlier inter-7aluation period and an expenditure other than expenditure which
ma# under the pro7isions of section 34 of this "rdinance# 0e allowed for computing the profits and gains
of a 0usiness/
4/ 2n computing the surplus for purposes of rule 3#-
+a- the amounts paid to# or reser7ed for# or expended on 0ehalf of# polic-holders shall 0e
allowed as a deduction1
Pro7ided that in the first such computation made under this rule of an such surplus# no
account shall 0e ta!en of an such amounts to the extent to which the are paid out# or in
respect# of an surplus 0rought forward from a pre7ious inter-7aluation period1
Pro7ided further that if an amount so reser7ed for polic-holders ceases to 0e so reser7ed#
and is not paid to# or expended on 0ehalf of# polic-holders# the sums pre7iousl allowed as
a deduction under this "rdinance or under the repealed Act shall 0e treated as part of the
surplus for the period in which the said amount ceased to 0e so reser7ed;
+0- an amount either written off or reser7ed in the accounts or through the actuarial 7aluation
0alance sheet to meet depreciation# or loss on the realisation# of in7estments# shall 0e
allowed as a deduction# and an sums ta!en credit for in the accounts or actuarial 7aluation
0alance sheet on account of appreciation# or gains on the realisation# of in7estments shall
0e included in the surplus1
Pro7ided that if it appears to the Deput ,ommissioner after consultation with the
,ontroller of 2nsurance that the rate of interest or other factors emploed in determining the
lia0ilit in respect of outstanding policies is inconsistent with the 7aluation of in7estments
so as artificiall to reduce the surplus# he ma ma!e such adCustment to the allowance for
depreciation# or in respect of appreciation# of such in7estment as he thin!s reasona0le; and
+c- interest recei7ed during the inter-7aluation period in respect of an securities of the %ederal
Eo7ernment which ha7e 0een issued or declared to 0e income-tax-free# shall not 0e excluded; 0ut such
interest shall 0e exempt from tax in accordance with the pro7isions of su0-section +3- of section ')/
224
:/ AdCustment of tax paid 0 deduction at source/- Where for an ear an assessment of the profits and
gains of life insurance 0usiness is made in accordance with the annual a7erage of a surplus disclosed 0 a
7aluation for an inter-7aluation period exceeding twel7e months# then# in computing the tax paa0le for
that ear# credit shall not 0e gi7en for the tax paid in the income ear 0ut credit shall 0e gi7en for the
annual a7erage of the tax paid 0 deduction at source from interest on securities or otherwise during such
period/
;/ >eer!l i'0r!#e/- $he profits and gains of an 0usiness of insurance other than life insurance shall
0e ta!en to 0e the 0alance of the profits disclosed 0 the annual accounts re5uired under the 2nsurance
Act# '(4= +2B of '(4=- to 0e furnished to the ,ontroller of 2nsurance# su0Cect to the following
adCustments# namel1-
+a- an expenditure or allowance# 8or an reser7e or pro7ision for an expenditure# or the amount of an
tax deducted at source from an di7idends or interest recei7ed9 which is not deducti0le in computing the
income chargea0le under the head 62ncome from 0usiness or procession6 shall 0e excluded;
+0- an amount either written off or ta!en to reser7e to meet depreciation or loss on the realisation# of
in7estments shall 0e allowed as a deduction# and an sums ta!en credit for in the accounts on account of
appreciation# or gains on the realisation# of in7estments shall 0e treated as part of the profits and gains1
Pro7ided that the Deput ,ommissioner is satisfied a0out the reasona0leness of the amount written off or
ta!en to reser7e in the accounts to meet depreciation# or loss on the realisation# of in7estments# as the case
ma 0e/
'
8+c- Nothing contained in this rule shall 0e construed to authorise deduction of an expenditure or
allowance or reser7e or pro7ision in excess of the limits laid down in the 2nsurance Act# '(4= +2B of
'(4=-/
</ .utual 2nsurance associations/- $hese rules shall also appl to the assessment of the profits of an
0usiness of insurance carried on 0 a mutual insurance association and such profits shall 0e deemed to 0e
lia0le to tax under the head F2ncome from 0usiness or professionG/
<A/ Exemption of capital gains from sale of shares1- 2n computing income under this Schedule# there shall
not 0e included Fcapital gainsG 0eing income from the sale of an instrument of redeema0le capital as
defined in clause +4@A- of su0-section +'- of Section 3 of the ,ompanies "rdinance# '(=: +D*B22 of
'(=:-# listed on an stoc! exchange in Pa!istan or shares of a pu0lic compan# as defined in su0-
paragraph +3- of Part 2B of the %irst Schedule to this "rdinance# deri7ed in respect of an assessment ear
ending on or 0efore the thirtieth da of &une# 8'(((9/
)/ Definitions/- %or the purposes of these rules#-
+a- 6in7estments6 includes securities# stoc!s and shares; and
+0- 6life insurance 0usiness6 means life insurance 0usiness as defined in clause +''- of section 3 of the
2nsurance Act# '(4= +2B of '(4=-/
'
,l/ +c- ins/ 0 %/A/'(((/
225
=/ Application of this Schedule/- $he pro7isions of this Schedule shall appl notwithstanding anthing
contained in this "rdinance or an law for the time 0eing in force/
226
THE FIFTH SCHEDALE
PART I
+See section 3<+0-
RALES FOR THE COMPATATION OF THE PROFITS AND >AINS FROM THE
EXPLORATION AND PRODACTION OF PETROLEAM.
'/ Exploration and production of petroleum to 0e treated as a separate 0usiness underta!ing/- Where an
person carries on# or is deemed to carr on# under an agreement with the Eo7ernment# an 0usiness#
which consists of# or includes# the exploration or production of petroleum in Pa!istan# 8or setting up of
refineries at Dhoda! and Ao0i fields# income of exploration and production companies from pipe-line
operations# and manufacture and sale of li5uified petroleum gas9 or compressed natural gas such 0usiness
or part thereof# as the case ma 0e# shall for the purposes of this "rdinance# 0e deemed to 0e a separate
0usiness underta!ing hereinafter referred to as 6such underta!ing6 and the profits and gains of such
underta!ing shall 0e computed separatel from his income# profits or gains from an other 0usiness# if
an# carried on 0 him/
3/ Co$+0t!tio o& +ro&it'.1 +'- Su0Cect to the pro7isions of this Part# the profits and gains of such
underta!ing shall 0e computed in the 62ncome from 0usiness or profession6/
+3- Where such person incurs an expenditure on searching for or on disco7ering and testing a petroleum
deposit or winning access thereto# 0ut the search# exploration or en5uir upon which the expenditure is
incurred is gi7en up 0efore the commencement of commercial production# the expenditure alloca0le to a
surrendered area or to the drilling of a dr-hole shall 0e deemed to 0e a lost at the time of the surrender of
the area or the completion of the dr-hole# as the case ma 0e/
+4- Where the agreement pro7ides that an portion of the expenditure deemed to 0e lost under su0-rule
+3- +such portion hereinafter referred to as the said loss- shall 0e allowed against an income of such
underta!ing# it shall 0e allowed in either of the following two was# as ma 0e pro7ided for in the
agreement# namel1-
+a- the said loss in an ear shall 0e set-off against the income of that ear chargea0le under the head
62ncome from 0usiness or profession6 or an income +other than income from di7idends- chargea0le under
an other head and where the loss cannot 0e wholl set off in this manner# the portion not so set off shall
0e carried forward to the following ear and set off in the same manner# and so on# 0ut no loss shall 0e
carried forward for more than six ears; or
+0- the said loss in an ear shall 0e set off against the income of such underta!ing of the income ear in
which commercial production has commenced and where the loss cannot 0e wholl set off against the
income of such underta!ing of that ear# the portion not so set off shall 0e carried forward to the following
ear and set off against the income# if an# of such underta!ing of that ear# and if it cannot 0e wholl so
set off# the amount of loss not so set off shall 0e carried forward to the following ear# and so on# 0ut no
loss shall 0e carried forward for more than ten ears/
+:- After the commencement of commercial production all expenditure incurred prior thereto and not
deemed to 0e lost under su0-rule +3- and not represented 0 phsical assets in use at the time the
commercial production commenced shall 0e allowed as a deduction# so# howe7er# that the portion of such
227
deduction to 0e so allowed in an ear shall 0e such amount +not exceeding ten per cent of the aggregate
amount deducti0le 8in respect of onshore areas and twent-fi7e per cent for offshore areas9- as ma 0e
selected 0 the assessee/
+;- An expenditure
'
8#including roalt paid to the Eo7ernment 0 an onshore petroleum exploration and
production underta!ing on# or after# the first da of &ul# 3@@'#9 +not 0eing in the nature of capital
expenditure or personal expenses of the assessee- laid out or expended after the commencement of
commercial production wholl and exclusi7el for the purpose of the 0usiness of production and
exploration of petroleum carried on 0 such underta!ing shall 0e allowed as a deduction1
Pro7ided that-

+i- no deduction shall 0e allowed in respect of such expenditure incurred on the ac5uisition of
assets in respect of which depreciation allowance is admissi0le under the $hird Schedule;
+ii- depreciation allowance admissi0le under the $hird Schedule shall 0e deducted in respect of
the assets referred to in paragraph +i-;
+iii- depreciation allowance admissi0le under the $hird Schedule shall also 0e deducted in
respect of such expenditure incurred on the ac5uisition of the phsical assets# which were
ac5uired 0efore the date of the commencement of commercial production and were 0eing
used 0 such underta!en on and after that date# as if such assets had 0een ac5uired at the
time of the commencement of commercial production at their original cost# as reduced 0
the amount of depreciation allowance# if an# pre7iousl allowed to 0e deducted under this
"rdinance or the repealed Act/
+<- 2f in an ear the deductions admissi0le under section 34 and su0-rules +4- and +:- exceed the
gross receipts from the sale of petroleum produced in Pa!istan# such excess shall 0e set off against other
income +not 0eing income from di7idends- and carried forward in the manner and su0Cect to the
limitations laid down in sections 4; and 4= and the $hird Schedule# so howe7er# that no portion of such
excess shall 0e carried forward for more than six ears819
8Pro7ided that the limitation of six ears prescri0ed in this su0-rule shall not appl to depreciation
allowance admissi0le to a person carring on the 0usiness of offshore petroleum exploratiion a and
production# in respect of an machiner# plant or other e5uipment used in such exploration or
produuction/9
4/ De+letio !llo/!#e/- 2n determining the income of such underta!ing for an ear ending after the date
on which commercial production has commenced# an allowance for depletion shall 0e made e5ual to
fifteen per cent of the gross receipts representing the well-head 7alue of the production1
Pro7ided that such allowance shall not exceed fift per cent of the profits or gains of such underta!ing
0efore the deduction of such allowance/
:/ Li$it!tio o +!,$et to >o5er$et !" t!xe'/- +'- $he aggregate of the taxes on income and
other paments
3
8excluding roalt as specified in the Pa!istan Petroleum +Production- Rules# '(:( or the
Pa!istan Petroleum +Exploration and Production- Rules# '(=< and paid 0 onshore petroleum exploration and
'
Words etc/ ins/ 0 %/ "/ 3@@'/
3
&bid.
228
production underta!ing on# or after# the first da of &ul# 3@@'#9 to the Eo7ernment in respect of the profits
or gains deri7ed from an underta!ing to which this Part applies for an assessment ear shall not exceed
the limits pro7ided for in the agreement1
8Pro7ided that the said aggregate shall not 0e less than fift per cent of the profits or gains deri7ed
0 an onshore petroleum exploration and production underta!ing and fort per cent of the profits or gains
and deri7ed 0 an offshore petroleum exploration and production underta!ing 0efore the deduction of the
pament to the Eo7ernmentS1T9
'
8Pro7ided further that in respect of assessment ear commencing on# or after# the first da of &ul#
3@@3 the said aggregate shall not 0e less than fort percent of the profit or gains deri7ed 0 an onshore
petroleum exploration and production underta!ing 0efore the deduction of pament excluding roalt paid 0
an onshore compan to the Eo7ernment/9
+3- 2f in respect of an ear# the aggregate of the taxes on income and paments to the Eo7ernment is
greater or less than the amount pro7ided for in the agreement# an additional tax shall 0e paa0le 0 the
assessee or an a0atement of tax shall 0e allowed to the assessee# as the case ma 0e# so as to ma!e the
aggregate of the taxes on income and paments to the Eo7ernment e5ual to the amount pro7ided for in the
agreement/9
+4- 2f in respect of an ear the paments to the Eo7ernment exceed the amount pro7ided for in the
agreement# so much of the excess as consist of an tax or le7 referred to in su0-clause +0- of clause +;- of
rule < shall 0e carried forward and treated# for the purposes of this rule# as paments to the Eo7ernment
for the succeeding ear1
Pro7ided that the whole of the paments to the Eo7ernment exceeding the amount pro7ided for in such
agreement ma 0e so carried forward if so pro7ided for in an agreement with an assessee made 0efore
the first da of &ul# '()@/
;/ Pro5i'io rel!ti2 to r0le'/- $he ,entral Aoard of Re7enue ma ma!e rules for the purposes of an
matter connected with# or incidental to# the operation of this Part/
</ 6De&iitio/- %or the purpose of this Part#-
+'- 6agreement6 means an agreement entered into 0etween the Eo7ernment and an assessee for the
exploration and production of petroleum in Pa!istan;
+3- 6commercial production6 means production as determined 0 the Eo7ernment;
+4- 6Eo7ernment6 means the Eo7ernment of Pa!istan;
+:- 6Part6 means part of this Schedule;
+;- 6paments to the Eo7ernment6 means amounts paa0le to the Eo7ernment or to an go7ernmental
authorit in Pa!istan-
'
Second pro7iso ins/ 0 %/ "/ 3@@'/
229
+a- in respect of roalties as specified in the Pa!istan Petroleum +Production- Rules# '(:(8# or
the Pa!istan Petroleum +Exploration and Production- Rules# '(=<9; and
+0- in respect of an tax or le7 imposed in Pa!istan peculiarl applica0le to oil production or
to extracti7e industries or an of them and not generall imposed upon all industrial and
commercial acti7ities;
+<- 6Petroleum6 means crude oil# natural gas and casing-head petroleum spirit as defined in the Pa!istan
Petroleum +Production- Rules# '(:(# or the Pa!istan Petroleum +Exploration and Production- Rules# '(=<
0ut does not include refined petroleum products;
+)- 6surrender6 means the termination of rights with respect to an area including the expiration of rights
according to the terms of an agreement;
+=- 6surrendered area6 means an area with respect to which the rights of a person ha7e terminated 0
surrender or 0 assignment or 0 termination of the 0usiness;
+(- 6taxes on income6 and 6tax6 includes income-tax and super-tax 0ut does not include paments to
Eo7ernment; and
+'@- 6well-head 7alue6 has the meaning assigned to it in the agreement 0etween the assessee and the
Eo7ernment and# in the a0sence of an such definition in the agreement# the meaning assigned to it in the
Pa!istan Petroleum +Production- Rules# '(:( 8or the Pa!istan Petroleum +Exploration and Production-
Rules# '(=<9; and
PART II
See section 3<+c-
RALES FOR THE COMPATATION OF PROFITS AND >AINS FROM THE EXPLORATION
AND EXTRACTION OF MINERAL DEPOSITS
(OTHER THAN PETROLEAM)
'/ Exploration and extraction of mineral deposits to 0e treated as separate underta!ing/- Where an person
carries on# or is deemed to carr on# an 0usiness which consists of or includes the exploration or
extraction of mineral deposits of a wasting nature +other than petroleum- in Pa!istan# such 0usiness or part
thereof# as the case ma 0e# shall# for the purpose of this "rdinance# 0e deemed to 0e a separate
underta!ing +hereinafter referred to as Fsuch underta!ingG- and the profits and gains of such underta!ing
shall 0e computed separatel from his income# profits or gains from other 0usiness# if an# carried on 0
him/
%. Co$+0t!tio o& +ro&it'/- +'- Su0Cect to the pro7isions of this Part# the profits and gains of such
underta!ing shall 0e computed in the manner applica0le to income# profits and gains chargea0le under the
head 62ncome from 0usiness or profession6/
+3- All expenditure on prospecting and exploration incurred 0 such underta!ing# after the thirt-first da
of .arch# '(;=# upto the date of commercial production shall# to the extent it cannot 0e set off against an
other income of the said underta!ing# 0e treated as a loss/
230
+4- $he loss referred to in su0-rule +3- shall 0e carried forward and set off against the income of such
underta!ing after the commencement of commercial production# so howe7er# that if it cannot 0e wholl
set off against the income of the said underta!ing of the income ear in which the commercial production
had commenced# the portion not so set off shall 0e carried forward for more than ten ears 0eginning with
the ear in which commercial production had commenced/
+:- After the commencement of commercial production# depreciation allowance in respect of machiner
and plant purchased or ac5uired after the thirt-first da of .arch# '(;= for extracting the ore shall 0e
allowed as a deduction from profits and gains of the ear in which the are used for the first time in an
amount e5ual to the original cost of such asset and all the pro7isions of the $hird Schedule shall# so far as
ma 0e# appl accordingl/
;. De+letio Allo/!#e/- +'- 2n determining the profits and gains of such underta!ing for an ear an
additional allowance +hereinafter referred to as the depletion allowance- shall 0e made e5ual to 8twent9
per cent of the total income of such underta!ing +0efore the deduction of such allowance- 8 9/
+3- No deduction under su0-rule +'- shall 0e made unless an amount e5ual to the depletion allowance is set
apart and left as a reser7e to 0e utilised for the de7elopment and expansion of such underta!ing/
+4- Where an allowance 0 wa of depletion allowance has 0een made in an ear and su0se5uentl it is
utilised for an purpose contrar to the pro7isions of su0-rule +3-# the amount originall allowed under this
"rdinance# or the repealed Act shall 0e deemed to ha7e 0een wrongl allowed and the Deput
,ommissioner ma# notwithstanding anthing contained in this "rdinance or the repealed Act# recompute
the total income of the assessee for the rele7ant income ears and the pro7isions of section <; shall# so far
as ma 0e# appl thereto# the period of ten ears specified in su0-section +4- of that section 0eing rec!oned
from the end of the assessment ear rele7ant to the income ear in which the amount was so utilised/
:/ T!x exe$+tio o& +ro&it' &ro$ re&ii2 or #o#etr!ti2 $ier!l' "e+o'it'/- +'- Where such
underta!ing is also engaged in the 0usiness of refining or concentrating in Pa!istan the mineral deposits
extracted 0 it in Pa!istan# so much of the profits and gains +hereinafter referred to in su0-rule +3- as the
said amount deri7ed from such 0usiness as does not exceed ten per cent of the capital emploed in such
0usiness +such capital 0eing computed in accordance with such rules as ma 0e made 0 the ,entral Aoard
of Re7enue for the purposes of this rule-# shall 0e exempt from tax/
+3- Where the profits and gains of such 0usiness computed for an assessment ear co7er a period which
is less or more than one ear# the amount of profits and gains exempt under su0-rule +'- shall 0e the
amount which 0ears the same proportion to the said amount of profits and gains the same proportion as the
said period 0ears to a period of one ear/
+4- $he profits and gains of the 0usiness to which this rule applies shall 0e computed in accordance with
the pro7isions of sections 34 and 3:/
+:- Nothing contained in this rule shall appl to an underta!ing which is formed 0 the splitting up or the
reconstruction or reconstitution of 0usiness alread in existence or 0 the transfer to a new 0usiness of an
0uilding# machiner or plant used in a 0usiness which was 0eing carried on 0efore the 'st da of &ul#
'();/
+;- $he pro7isions of this rule shall appl to the assessment ear next following the income ear in which
commercial production is commenced or the loss or allowance# if an# under su0-rules +4- and +:- of rule
231
3# as the case ma 0e# has 0een set off or deducted in full# whiche7er is the later# and for the next
following four ears/
9. Pro5i'io rel!ti2 to r0le'/- $he ,entral Aoard of Re7enue# ma ma!e rules pro7iding for an matter
connected with#or incidental to# the operation of this Part/
:. De&iitio'/- %or the purposes of this Part#-
+'- 6commercial production6 means production as determined 0 the Deput ,ommissioner;
+3- 6Part6 means Part of this Schedule; and
+4- 6petroleum6 has the same meaning as in clause +<- of rule < of Part 2/
232
THE SIXTH SCHEDALE
PART I
See sections 3+4)-# 3: and :@
RECO>NISED PROBIDENT FANDS
XX
'/ Recognition of pro7ident funds/- +'- $he ,ommissioner ma accord recognition to an pro7ident fund
which# in his opinion# complies with the re5uirements of rule 3# and ma# at an time# withdraw such
recognition if# in his opinion# the circumstances of the fund cease to warrant the continuance of the
recognition/
+3- An order according recognition shall ta!e effect on such date as the ,ommissioner ma fix in
accordance with such rules as the ,entral Aoard of Re7enue ma ma!e in this 0ehalf# such date not 0eing
later than the last da of the financial ear in which the order is made/
+4- An order according recognition to a pro7ident fund shall no# unless the ,ommissioner otherwise
directs# 0e affected 0 the fact that the fund is su0se5uentl amalgamated with another pro7ident fund on
the occurrence of an amalgamation of the underta!ings in connection with which the two funds are
maintained# or that it su0se5uentl a0sor0s the whole or a part of another pro7ident fund 0elonging to an
underta!ing which is wholl or in part transferred to# or merged in# the underta!ing of the emploer
maintaining the first-mentioned fund/
+:- An order withdrawing recognition shall ta!e effect from such date as the ,ommissioner ma fix/
+;- $he ,ommissioner shall neither refuse nor withdraw recognition of an pro7ident fund# unless he has
gi7en to the trustees of the fund a reasona0le opportunit of 0eing heard/
%. Co"itio' &or !++ro5!l/- +'- 2n order that a pro7ident fund ma recei7e and retain recognition it shall
satisf the conditions hereinafter specified and an other conditions which the ,entral Aoard of Re7enue
ma# 0 rules# prescri0e-
+a- all emploees shall 0e emploed in Pa!istan# or shall 0e emploed 0 an emploer whose
principal place of 0usiness is in Pa!istan1
Pro7ided that the ,ommissioner ma# if he thin!s fit# and su0Cect to such conditions# if an# as he
thin!s proper to attach to the recognition# accord recognition to a fund maintained 0 an
emploer whose principal place of 0usiness is not in Pa!istan# pro7ided the proportion of
emploees emploed outside Pa!istan does not exceed ten per cent;
+0- the contri0utions of an emploee in an ear shall 0e a definite proportion of his salar for
that ear# and shall 0e deducted 0 the emploer from the emploeeGs salar in that
proportion# at each periodical pament of such salar in that ear# and credited to the
emploees indi7idual account in the fund1
Pro7ided that an emploee# who retains his emploment while ser7ing in the armed forces
of Pa!istan or when ta!en into# or emploed in# the national ser7ice under an law for the
time 0eing in force# ma# whether he recei7es from the emploer an salar or not
233
contri0ute to the fund during his ser7ice in the armed forces of Pa!istan or while so ta!en
into# or emploed in# the national ser7ice a sum not exceeding the amount he would ha7e
contri0uted had 0e continued to ser7e the emploer;
+c- the contri0utions of an emploer to the indi7idual account of an emploee in an ear shall
not exceed the amount of the contri0utions of the emploee in that ear# and shall 0e
credited to the emploeeGs indi7idual account at inter7als not exceeding one ear;
Pro7ided that# su0Cect to an rules which the ,entral Aoard of Re7enue ma ma!e in this
0ehalf# the ,ommissioner ma# in respect of an particular fund# relax the pro7isions of this
clause-
+i- so as to permit the pament of larger contri0utions 0 an emploer to the indi7idual
accounts of emploees whose salaries do not# in each case# exceed fi7e hundred
rupees per mensem;
+ii- so as to permit the crediting 0 emploers to the indi7idual accounts of emploees
of periodical 0onuses or other contri0utions of a contingent nature# where the
calculation and pament of such 0onuses or other contri0utions is pro7ided for on
definite principles 0 the regulations of the fund;
+d- the emploer shall not 0e entitled to reco7er an sum whatsoe7er from the fund# sa7e in
cases where the emploee is dismissed for misconduct or 7oluntaril lea7es his
emploment otherwise than on account of ill-health or other una7oida0le cause 0efore the
expiration of the term of ser7ice specified in this 0ehalf in the regulations of the fund1
Pro7ided that in such cases the reco7eries made 0 the emploer shall 0e limited to the
contri0utions made 0 him to the indi7idual account of the emploee# and to interest
credited in respect of such contri0utions in accordance with the regulations of the fund and
accumulations thereof;
+e- the fund shall 0e 7ested in two or more trustees or in the "fficial $rustees under a trust
which shall not 0e re7oca0le sa7e with the consent of all the 0eneficiaries;
+f- the fund shall consist of contri0utions as a0o7e specified# recei7ed 0 the trustees# or
accumulations thereof# and of interest credited in respect of such contri0utions and
accumulations# and of securities purchased therewith and of an capital gains arising from
the transfer of capital assets of the fund# and of no other sums;
+g- the accumulated 0alance due to an emploee shall 0e paa0le on the da he ceases to 0e an
emploee of the emploer maintaining the funds1
Pro7ided that notwithstanding anthing contained in clause +f- or clause +g-;-
+i- at the re5uest made in writing 0 the emploee who ceases to 0e an emploee of the
emploer maintaining the fund# the trustees of the fund ma consent to retain the
whole or an part of the accumulated 0alance due to the emploee to 0e drawn 0
him at an time on demand;
234
+ii- where the accumulated 0alance due to an emploee who has ceased to 0e an
emploee is retained in the fund in accordance with the preceding clause# the fund
ma consist also of interest in respect of such accumulated 0alance;
+iii- the fund ma also consist of an amount transferred from the indi7idual account o
an emploee in an recognised pro7ident fund maintained 0 his former emploer
and the interest in respect thereof;
+h- sa7e as pro7ided in clause +g- or in accordance with such conditions and restrictions as the
,entral Aoard of Re7enue ma# 0 rules# specif# no portion of the 0alance to the credit of
an emploee shall 0e paa0le to him1
Pro7ided that in order to ena0le an emploee to pa the amount of tax assessed on his total
income as determined under su0-rule +:- of rule )# he shall 0e entitled to withdraw from the
0alance to his credit in the recognised pro7ident fund a sum not exceeding the difference
0etween such amount and the amount to which he would ha7e 0een assessed if the
transferred 0alance referred to in su0-rule +3- of rule ) had not 0een included in his total
income/
;. E$+lo,erE' !0!l #otri.0tio', /he "ee$e" to .e i#o$e re#ei5e" ., e$+lo,ee/- $hat portion
of the annual accretion in an ear to the 0alance at the credit of an emploee participating in a recognised
pro7ident fund as consists of-
+a- contri0utions made 0 the emploer in excess of ten percent of the salar of the emploee; and
+0- interest credited on the 0alance to the credit of the emploee in so far as it exceeds one third of the
salar of the emploee or is allowed at a rate exceeding such rate as ma 0e fixed 0 the %ederal
Eo7ernment in this 0ehalf 0 notification in the official EaHette#
shall 0e deemed to ha7e 0een recei7ed 0 the emploee in that ear and shall 0e included in his total
income for that ear and shall 0e lia0le to income tax/
6. Ex#l0'io &ro$ tot!l i#o$e o& !##0$0l!te" .!l!#e/- +'- Su0Cect to such rules as ma 0e made 0
the ,entral Aoard of Re7enue in this 0ehalf# the accumulated 0alance due and 0ecoming paa0le to an
emploee participating in a recognised pro7ident fund shall 0e excluded from the computation of his total
income/
+3- $he pro7isions of su0-rule +'- shall also appl where# on the cessation of his emploment# the
emploee o0tains emploment with an other emploer and the accumulated 0alance due and 0ecoming
paa0le to him is transferred to his indi7idual account in an recognised pro7ident fund maintained 0
such other emploer/
9. T!x o !##0$0l!te" .!l!#e/- Where the accumulated 0alance due to an emploee participating in a
recognised pro7ident fund is included in his total income# the Deput ,ommissioner shall calculate the
total of the 7arious sums of tax which would ha7e 0een paa0le 0 the emploee in respect of his total
income for each of the ears concerned if the fund had not 0een a recognised pro7ident fund and the
amount 0 which such total exceeds the total of all sums paid 0# or on 0ehalf of such emploee 0 wa of
tax for such ears shall 0e paa0le 0 the emploee in addition to an other tax for which he ma 0e lia0le
for the income ear in which the accumulated 0alance due to him 0ecomes paa0le/
235
:. De"0#tio !t 'o0r#e o& t!x +!,!.le o !##0$0l!te" .!l!#e/- $he trustees of a recognised pro7ident
fund# or an person authorised 0 the regulations of the fund to ma!e paa0le of accumulated 0alance due
to emploees shall# in cases where rule ; applies# at the time an accumulated 0alance due to an emploee
is paid# deduct therefrom the amount paa0le under that rule and the pro7isions of ,hapter B2 shall# so far
as ma 0e# appl as if the accumulated 0alance were income chargea0le under the head 6Salar6/
7. Tre!t$et o& .!l!#e i e/l, re#o2i'e" +ro5i"et &0"/- +'- Where recognition is accorded to a
pro7ident fund with existing 0alances# an account shall 0e made of the fund up to the da immediatel
preceding the da on which the recognition ta!es effect showing the 0alance to the credit of each
emploee on such da and containing such further particulars as the ,entral 0oard of Re7enue ma
prescri0e/
+3- $he account referred to in su0-rule +'- shall also show in respect of the 0alance to the credit of an
emploee the amount thereof which is to 0e transferred to that emploeeGs account in the recognised
pro7ident fund# and such amount +hereinafter called his Ftransferred 0alanceG- shall 0e shown as the
0alance to his credit in the recognised pro7ident fund on the date on which the recognition of the fund
ta!es effect# and the pro7isions of su0-rule +:- and the pro7iso to clause +h- of rule 4 shall appl thereto/
+4- An portion of the 0alance to the credit of an emploee in the existing fund which is not transferred to
the recognised fund shall 0e excluded from the accounts of the recognised fund and shall 0e lia0le to
income tax in accordance with the pro7isions of this "rdinance# other than this Part/
+:- Su0Cect to such rules as the ,entral Aoard of Re7enue ma ma!e in this 0ehalf# the Deput
,ommissioner shall ma!e a calculation of the aggregate of all sums comprised in a transferred 0alance
which would ha7e 0een lia0le to income-tax if this Part had 0een in force from the date of the institution
of the fund# without regard to an tax which ma ha7e 0een paid on an sum# and such aggregate# if an#
shall 0e deemed to 0e income recei7ed 0 the emploee in the income ear in which the recognition of the
fund ta!es effect and shall 0e included in the emploeeGs total income for that ear# and# for the purposes
of assessment# the remainder of the transferred 0alance shall 0e disregarded# 0ut no other exemption or
relief# 0 wa of refund or otherwise# shall 0e granted in respect of an sum comprised in such transferred
0alance1
Pro7ided that# in cases of serious accounting difficult# the ,ommissioner ma# su0Cect to the said rules#
ma!e a summar calculation of such aggregate/
+;- Nothing in this rule shall affect the rights of the persons administering an unrecognised pro7ident fund
or dealing with it# or with the 0alance to the credit of an indi7idual emploees# 0efore recognition is
accorded# in an manner which ma 0e lawful/
?. A##o0t' o& re#o2i'e" +ro5i"et &0"'/- +'- $he accounts of a recognised pro7ident fund shall 0e
maintained 0 the trustees of the fund and shall 0e in such form and for such periods# and shall contain
such particulars# as ma 0e prescri0ed/
+3- $he accounts shall 0e open to inspection at all reasona0le times 0 income tax authorities# and the
trustees shall furnish to the Deput ,ommissioner such a0stracts thereof as ma 0e prescri0ed/
9. Tre!t$et o& &0" tr!'&erre" ., e$+lo,er to tr0'tee/- +'- Where an emploer# who maintains a
pro7ident fund +whether recognised or not- for the 0enefit of his emploees and has not transferred the
236
fund or an portion of it# transfers such fund or portion to trustees in trust for the emploees participating
in the fund# the amount so transferred shall 0e deemed to 0e of the nature of capital expenditure/
+3- When an emploee participating in such fund is paid the accumulated 0alance due to him therefrom#
an portion of such 0alance as represents his share in the amount so transferred to the trustees +without
addition of interest# and exclusi7e of the emploeeGs contri0utions and interest thereon- shall# if the
emploer has made effecti7e arrangement to secure that tax shall 0e deducted at source from the amount
of such share when paid to the emploee# 0e deemed to 0e an expenditure 0 the emploer# within the
meaning of clause +x7iii- of su0-section +'- of section 34# incurred in the income ear in which the
accumulated 0alance due to the emploee is paid/
14. P!rti#0l!r' to .e &0ri'he" i re'+e#t o& re#o2i'e" +ro5i"et &0"'/- $he trustees of a recognised
pro7ident fund and an emploer who contri0utes to a recognised pro7ident fund shall# when re5uired 0
notice from the Deput ,ommissioner# within such period +not 0eing less than twent one das from the
date of the notice-# as ma 0e specified in the notice# furnish such return# statement# particulars or
information# as the Deput ,ommissioner ma re5uire/
11. Pro5i'io' o& thi' P!rt to +re5!il !2!i't re20l!tio' o& the &0"/- Where there is a repugnance
0etween an regulation of a recognised pro7ident fund and an pro7ision of this Part or of the rules made
thereunder# the regulation shall# to the extent of the repugnance# 0e of no effect# and the ,ommissioner
ma# at an time# re5uire that such repugnance shall 0e remo7ed from the regulations of the fund/
1%. A++e!l'/- +'- An emploer o0Cecting to an order of ,ommissioner refusing to recognise# or an order
withdrawing recognition from# a pro7ident fund ma appeal# within sixt das of the ma!ing of such
order# to the ,entral 0oard of Re7enue/
+3- $he ,entral Aoard of Re7enue ma admit an appeal after the expiration of the period specified in su0-
rule +'-# if it is satisfied that the appellant was pre7ented 0 sufficient cause from presenting it within that
period/
+4- $he appeal shall 0e in such form and shall 0e 7erified in such manner and shall 0e accompanied 0
such fee as ma 0e prescri0ed/
1;. Pro5i'io' rel!ti2 to r0le'/- 2n addition to an power conferred 0 this Part# the ,entral Aoard of
Re7enue ma ma!e rules1-
+a- prescri0ing the form of application for recognition and the statement and other particulars and
documents to 0e su0mitted therewith1
+0- limiting the contri0utions to a recognised pro7ident fund 0 emploees of a compan# who are
shareholders in the compan;
+c- pro7iding for the assessment 0 wa of penalt of an consideration recei7ed 0 an emploee for an
assignment of# or creation of a charge upon# his 0eneficial interest in a recognised pro7ident fund;
+d- determining the extent to# and the manner in# which exemption from pament of tax ma 0e granted in
respect of contri0utions and interest credited to the indi7idual accounts of emploees in a pro7ident fund
from which recognition has 0een withdrawn;
237
+e- regulating the in7estment of the mones of a recognised pro7ident fund; and
+f- generall# to carr out the purposes of this part and to secure such further control o7er the recognition
of pro7ident funds and the administration of recognised pro7ident funds as it ma deem re5uisite/
16. De&iitio'/- 2n this Part# unless the context otherwise re5uires#
+a- 6accumulated 0alance due to an emploee6 means the 0alance to his credit# or such portion thereof as
ma 0e claima0le 0 him under the regulations of the fund# on the da he ceases to 0e an emploee of the
emploer maintaining the funds;
+0- 6annual accretion6 in relation to the 0alance to the credit of an emploee# means the increase to such
0alance in an ear# arising from contri0utions and interest;
+c- 60alance to the credit of an emploee6 means the total amount to the credit of his indi7idual account in
a pro7ident fund at an time;
+d- 6contri0ution6 means an sum credited 0 or on 0ehalf of# an emploee out of his salar# or 0 an
emploer out of his own mone# to the indi7idual account of an emploee# 0ut does not include an sum
credited as interest;
+e- 6emploee6 means an emploee participating in a pro7ident fund# 0ut does not include a personal or
domestic ser7ant;
+f- 6emploer6 means an person who maintains a pro7ident fund for the 0enefit of his or its emploees#
0eing an indi7idual# a compan# a Hindu undi7ided famil# a firm or other association of persons engaged
in an 0usiness or profession the profits and gains whereof are chargea0le to income tax under the head
62ncome from 0usiness or profession6;
+g- 6regulations of a fund6 means the special 0od of regulations go7erning the constitution and
administration of a particular pro7ident fund; and
+h- 6salar6 includes dearness allowance# if the terms of emploment so pro7ide# 0ut excludes all other
allowances and per5uisites/
19. A++li#!tio o& thi' P!rt/- $his Part shall not appl to an pro7ident fund to which the Pro7ident
%unds Act# '(3; +D2D of '(3;- applies/
PART II
+See sections 3+-# 3: and :@-
APPROBED SAPERANNAATION FANDS
1. A++ro5!l o& '0+er!0!tio &0"'/- +'- $he ,ommissioner ma accord appro7al to an
superannuation fund or an part of a superannuation fund which# in his opinion# complies with the
re5uirements of rule 3# and ma# at an time withdraw such appro7al if# in his opinion# the circumstances
of the fund or the part# as the case ma 0e# cease to warrant the continuance of the appro7al/
238
+3- An order according appro7al or withdrawing appro7al shall ta!e effect from such date as the
,ommissioner ma fix/
+4- $he ,ommissioner shall neither refuse nor withdraw appro7al to an superannuation fund or an part
of a superannuation fund unless he has gi7en the trustees of that fund a reasona0le opportunit of 0eing
heard/
%. Co"itio' &or !++ro5!l/- 2n order that a superannuation fund ma recei7e and retain appro7al# it shall
satisf the conditions hereinafter specified and an other conditions which the ,entral Aoard of Re7enue
ma# 0 rules prescri0e-
+a- the fund shall 0e a fund esta0lished under an irre7oca0le trust# in connection with a trade or
underta!ing carried on in Pa!istan# and not less than ninet per cent of the emploees shall 0e emploed in
Pa!istan;
+0- the fund shall ha7e for its sole purpose the pro7ision of annuities for emploees in the trade or
underta!ing on their retirement at or after a specified age or on their 0ecoming incapacitated prior to such
retirement# or for widows# children or dependents of persons who are or ha7e 0een such emploees on the
death of these persons;
+c- the emploer in the trade or underta!ing shall 0e a contri0utor to the fund; and
+d- all annuities# pensions and other 0enefits granted from the fund shall 0e paa0le onl in Pa!istan/
;. A++li#!tio &or !++ro5!l/- +'- An application for appro7al of a superannuation fund# or part of a
superannuation fund# shall 0e made in writing 0 the trustees of the fund to the Deput ,ommissioner 0
whom the emploer is assessa0le# and shall 0e accompanied 0 a cop of the instrument under which the
fund is esta0lished and 0 two copies of the regulations and# where the fund has 0een in existence during
an ear or ears prior to the financial ear in which the application for appro7al is made# also two copies
of the accounts of the funds relating to such prior ear or ears +not 0eing more than three ears
immediatel preceding the ear in which the said application is made- for which such accounts ha7e 0een
made up# 0ut the ,ommissioner ma re5uire such further information to 0e supplied as he thin!s proper/
+3- 2f an alteration in the regulations# constitution# o0Cects or conditions of the fund is made at an time
after the date of the application for appro7al# the trustees of the fund shall forthwith communicate such
alteration to the Deput ,ommissioner mentioned in su0-rule +'-# and# in default of such communication#
an appro7al gi7en shall# unless the ,ommissioner otherwise directs# 0e deemed to ha7e 0een withdrawn
from the date on which the alteration too! effect/
6. Cotri.0tio' ., e$+lo,er, /he "ee$e" to .e hi' i#o$e/- Where an contri0utions 0 an
emploer +including the interest thereon# if an-# are repaid to the emploer# the amount so repaid shall 0e
deemed for the purpose of tax to 0e the income of the emploer of the income ear in which it is so repaid/
9. De"0#tio o& t!x o #otri.0tio' +!i" to ! e$+lo,ee/- Where an contri0utions made 0 an
emploer +including interest on contri0utions# if an-# are repaid to an emploee during his life-time in
circumstances other than those referred to in clause +3;- of part 2 of the Second Schedule# tax on the
amount so repaid shall 0e deducted 0 the trustees at the a7erage rate of tax at which the emploee was
lia0le to tax during the preceding three ears or during such period# if less than three ears# as he was a
239
mem0er of the fund# and shall 0e paid 0 the trustees to the credit of the %ederal Eo7ernment within such
time and in such manner as ma 0e prescri0ed/
:. De"0#tio &ro$ +!, o& !" #otri.0tio' o .eh!l& o& e$+lo,ee' to .e i#l0"e" i ret0r 0"er
'e#tio 1;9/- Where an emploer deducts from the emoluments paid to an emploee or pas on his 0ehalf
an contri0utions of that emploee to an appro7ed superannuation fund# he shall include all such
deductions or paments in return which he is re5uired to furnish under section '4(/
7. Li!.ilit, o& tr0'tee' o #e''!tio o& !++ro5!l/- 2f a fund# or a part of a fund# for an reason ceases to
0e an appro7ed superannuation fund# the trustees of the fund shall ne7ertheless remain lia0le to tax on an
sum paid on account of returned contri0utions +including interest on contri0utions# if an-# in so far as the
sum so paid is in respect of contri0utions made 0efore the fund or part of the fund# as the case ma 0e#
ceased to 0e an appro7ed superannuation fund under the pro7isions of this Part/
?. +!rti#0l!r' to .e &0ri'he" i re'+e#t o& '0+er!0!tio &0"/- $he trustees of an appro7ed
superannuation fund and an emploer who contri0utes to an appro7ed superannuation fund shall# when
re5uired 0 notice from the Deput ,ommissioner# within such period +not 0eing less than twent-one
das from the date of the notice-# as ma 0e specified in the notice# furnish such return# statement#
particulars or information# as the Deput ,ommissioner ma re5uire/
9. Pro5i'io' o& the P!rt to +re5!il !2!i't re20l!tio' o& the &0"/- Where there is a repugnance
0etween an regulation of an appro7ed superannuation fund and an pro7ision of this Part or of the rules
made thereunder# the regulation shall# to the extent of the repugnance# 0e of no effect; and the
,ommissioner ma# at an time# re5uire that such repugnance shall 0e remo7ed from the regulations of
the fund/
14. A++e!l'/- +'- An emploer o0Cecting to an order of the ,ommissioner refusing to accord appro7al to a
superannuation fund or an order withdrawing such appro7al ma appeal# within sixt das of the ma!ing
of such order# to the ,entral Aoard of Re7enue/
+3- $he ,entral Aoard of Re7enue ma admit an appeal after the expiration of the period specified in su0-
rule +'-# if it is satisfied that the appellant was pre7ented 0 sufficient cause from presenting it within that
period/
+4- $he appeal shall 0e in such form and shall 0e 7erified in such manner and shall 0e accompanied 0
such fee as ma 0e prescri0ed/
11. Pro5i'io' rel!ti2 to r0le'/- +'- 2n addition to an power conferred 0 this Part# the ,entral Aoard of
Re7enue ma ma!e rules-
+a- prescri0ing the statements and other information to 0e su0mitted alongwith an application for
appro7al;
+0- prescri0ing the returns# statements# particulars# or information which the Deput ,ommissioner ma
re5uire from the trustees of an appro7ed superannuation fund or from the emploer;
+c- limiting the ordinar annual contri0ution and an other contri0utions to an appro7ed superannuation
fund 0 an emploer;
240
+d- regulating the in7estment or deposit of the mones of an appro7ed superannuation fund;
+e- pro7iding for the assessment 0 wa of penalt of an consideration recei7ed 0 an emploee for an
assignment of# or creation of a charge upon# his 0eneficial interest in an appro7ed superannuation fund;
+f- pro7iding for the withdrawal of appro7al in the case of a fund which ceases to satisf the re5uirements
of this Part or of the rules made thereunder; and
+g- generall# to carr out the purposes of this Part and to secure such further control o7er the appro7al of
superannuation funds and the administration of appro7ed superannuation funds as it ma deem re5uisite/
1%. De&iitio'/- 2n this part# unless the context otherwise re5uires 6contri0utions6# 6emploee6#
6emploer6# 6regulations of a fund6 and 6salar6 ha7e# in relation to superannuation funds# the meanings
assigned to those expressions in rule ': of Part 2 in relation to pro7ident funds/
PART III
+See sections 3+:- and 3:-
APPROBED >RATAITY FANDS
1. A++ro5!l o& >r!t0it, F0"'/- 6$he ,ommissioner ma accord appro7al to an gratuit fund which# in
his opinion# complies with the re5uirements of rule 3 and ma# at an time# withdraw such appro7al if# in
his opinion# the circumstances of the fund cease to warrant the continuance of the appro7al/
+3- An order according appro7al or withdrawing appro7al shall ta!e effect from such date as the
,ommissioner ma fix/
+4- $he ,ommissioner shall neither refuse nor withdraw appro7al to an gratuit fund unless he has gi7en
the trustees of that fund a reasona0le opportunit of 0eing heard/
%. Co"itio' &or !++ro5!l/- 2n order that a gratuit fund ma recei7e and retain appro7al# it shall satisf
the conditions hereinafter specified and an other conditions which the ,entral Aoard of Re7enue ma# 0
rules# prescri0e-
+a- the fund shall 0e a fund esta0lished under an irre7oca0le trust in connection with trade or
underta!ing carried on in Pa!istan# and not less than ninet per cent of the emploees shall
0e emploed in Pa!istan;
+0- the fund shall ha7e for its sole purpose the pro7ision of a gratuit to emploees in the trade
or underta!ing on their retirement at or after a specified age or on their 0ecoming
incapacitated prior to such retirement# or on termination of their emploment after a
minimum period of ser7ice specified in the regulations of the fund or to the widows#
children or dependents of such emploees on their death;
+c- the emploer in the trade or underta!ing shall 0e a contri0utor to the fund; and
+d- all 0enefits granted 0 the fund shall 0e paa0le onl in Pa!istan/
241
;. A++li#!tio &or !++ro5!l/- +'- An application for appro7al of a gratuit fund shall 0e made in writing
0 the trustees of the fund to the Deput ,ommissioner 0 whom the emploer is assessa0le and shall 0e
accompanied 0 a cop of the instrument under which the fund is esta0lished and 0 two copies of the
rules and# where the fund has 0een in existence during an ear or ears prior to the financial ear in
which the application for appro7al is made# also two copies of the accounts of the fund relating to such
prior ear or ears +not 0eing more than three ears immediatel preceding ear in which the said
application is made- for which such accounts ha7e 0een made up# 0ut the ,ommissioner ma re5uire such
further information to 0e supplied as he thin!s proper/
+3- 2f an alteration in the regulations# constitution# o0Cects or conditions of the fund is made at an time
after the date of the application for appro7al# the trustees of the fund shall forthwith communicate such
alterations to the Deput ,ommissioner mentioned in su0-rule +'-# and in default of such communication#
an appro7al gi7en shall# unless the ,ommissioner otherwise orders# 0e deemed to ha7e 0een withdrawn
from the date on which the alteration too! effect/
6. >r!t0it, "ee$e" to .e '!l!r,/- Where an gratuit is paid to an emploee during his life-time# the
gratuit shall 0e treated as salar paid to the emploee for the purposes of this "rdinance/
9. Li!.ilit, o& tr0'tee' o #e''!tio o& !++ro5!l/- 2f a gratuit fund for an reason ceases to 0e an
appro7ed gratuit fund# the trustees of the fund shall ne7ertheless remain lia0le to tax on an gratuit paid
to an emploee/
:. Cotri.0tio' ., e$+lo,er, /he "ee$e" to .e hi' i#o$e/- Where an contri0utions 0 an
emploer +including the interest thereon# if an#- are repaid to the emploer# the amount so repaid shall 0e
deemed for the purposes of tax to 0e the income of the emploer of the income ear in which the are so
repaid/
7. P!rti#0l!r' to .e &0ri'he" i re'+e#t o& 2r!t0it, &0"'/- $he trustees of an appro7ed gratuit fund
and an emploer who contri0utes to an appro7ed gratuit fund shall# when re5uired 0 notice from the
2ncome $ax officer# furnish# within such period not 0eing less than twent-one da from the date of the
notice as ma 0e specified in the notice# such return# statement# particulars or information# as the Deput
,ommissioner ma re5uire/
?. Pro5i'io' o& the P!rt to +re5!il !2!i't re20l!tio' o& the &0"/- Where there is a repugnance
0etween an rule of an appro7ed gratuit fund and an pro7ision of this Part or of the rules made
thereunder# the said rule shall# to the extent of repugnance# 0e of no effect and the ,ommissioner ma# at
an time# re5uire that such repugnance shall 0e remo7ed from the rules of the fund/
9. A++e!l'/- +'- An emploer o0Cecting to an order of the ,ommissioner refusing to accord appro7al to a
gratuit fund or an order withdrawing such appro7al ma appeal# within sixt das of the ma!ing of such
order# to the ,entral Aoard of Re7enue/
+3- $he ,entral 0oard of Re7enue ma admit an appeal after the expiration of the period specified in su0-
rule +'-# if it is satisfied that the appellant was pre7ented 0 sufficient cause from presenting it within that
period/
+4- $he appeal shall 0e in such form and shall 0e 7erified in such manner and shall 0e accompanied 0
such fee as ma 0e prescri0ed/
242
14. Pro5i'io' rel!ti2 to r0le'/- +'- 2n addition to an power conferred in this Part# the ,entral 0oard of
Re7enue ma ma!e rules-
+a- prescri0ing the statements and other information to 0e su0mitted alongwith an application
for appro7al;
+0- limiting the ordinar annual and other contri0utions of an emploer to the fund;
+c- regulating the in7estment or deposit of the mones of an appro7ed gratuit fund;
+d- pro7iding for the assessment 0 wa of penalt of an consideration recei7ed 0 an
emploee for an assignment of# or the creation of a charge upon# his 0eneficial interest in
an appro7ed gratuit fund;
+e- pro7iding for withdrawal of the appro7al in the case of a fund which ceases to satisf the
re5uirements of this Part of the rules made thereunder; and
+f- generall# to carr out the purposes of this Part and to secure such further control o7er the
appro7al of gratuit funds and the administration of gratuit funds as it ma deem re5uisite/
11. De&iitio'/- 2n this Part# unless the context otherwise re5uires# 6contri0ution6# 6emploee6#
6emploer6# 6regulations of a fund6 and 6salar6 ha7e in relation to gratuit funds# the meaning assigned
to those expressions in rule ': of Part 2 in relation to pro7ident funds/
243
THE SEBENTH SCHEDALE
+See Section '<4+3-
RALES FOR THE COMPATATION OF RELIEF FROM TAX @Y DAY OF CREDIT IN
RESPECT OF FOREI>N TAX.

1. Cre"it !2!i't P!-i't! t!x/- Su0Cect to the pro7isions of this Schedule# under an agreement
concluded under section '<4# credit is to 0e allowed against Pa!istan tax chargea0le in respect of an
income# the amount of the Pa!istan tax so chargea0le shall# su0Cect to the pro7isions of the said
agreement# 0e reduced 0 the amount of the credit/
%. Cre"it !"$i''i.le to re'i"et'/- No credit under rule ' shall 0e allowed against Pa!istan tax for an
assessment ear unless the person in respect of whose income the tax is chargea0le is resident in Pa!istan
in the rele7ant income ear/
;. Co$+0t!tio o& #re"it/- $he amount of the credit to 0e allowed for foreign tax against Pa!istan tax in
respect of an income shall not exceed the amount which would 0e arri7ed at 0 appling the a7erage rate
of such tax to the dou0l-taxed income/
6. T!x #re"it i re'+e#t o& "i5i"e"'/- +'- Where the income includes a di7idend and# under the
agreement# foreign tax# whether chargea0le directl or 0 deduction in respect of the di7idend is to 0e
ta!en into account in considering whether an# and if so what# credit is to 0e allowed against Pa!istan tax
in respect of the di7idend# the amount of the income shall 0e treated as increased 0 the amount of the
foreign tax appropriate to the di7idend which falls to 0e ta!en into account in computing the amount of the
credit/
+3- Where the amount of the income is to 0e treated as increased under su0-rule +'-# the foreign tax not
chargea0le directl or 0 deduction which is to 0e ta!en into account shall e that 0orne 0 the compan
paing the di7idend upon the profits for the period for which the di7idend is paid# or# if the di7idend is not
paid for a specified period# the profits of the last period for which accounts of the compan were made up
which ended 0efore the di7idend 0ecame paa0le/
Explanation/- 2n this su0-rule# 6paid6 means paid# credited or distri0uted or deemed to ha7e 0een paid#
credited or distri0uted# as the case ma 0e/
+4- Notwithstanding anthing contained in su0-rules +'- and +3- and section 3:# where an part of the
foreign tax in respect of the income cannot 0e allowed as a credit against Pa!istan tax# the amount of the
income shall 0e treated for the purposes of Pa!istan tax as reduced 0 that part of the foreign tax/
+:- Where Pa!istan tax paa0le depends on the amount recei7ed in Pa!istan# the said amount shall 0e
treated as increased 0 the amount of the credit allowa0le against Pa!istan tax/
+;- 2n computing the total income of a person for the purpose of determining the rate mentioned in rule 4#
su0-rules +'- and +4- shall not appl and# for the reference in su0-rule +:- to the amount of the credit
allowa0le against Pa!istan tax# there shall 0e su0stituted a reference to the amount of the foreign tax in
respect of the income/
244
9. Li$it!tio/- +'- Su0Cect to the pro7isions of su0-rule +3-# an claim for an allowance 0 wa of credit
for foreign tax in respect of an income shall 0e made to the Deput ,ommissioner not later than two
ears from the end of the assessment ear for which that income falls to 0e charged to Pa!istan tax or
would falls so to 0e charged if an such tax were chargea0le in respect thereof/
+3- Where the amount of an credit gi7en under the agreement is rendered excessi7e or insufficient 0
reason of an adCustment of the amount of an tax paa0le either in Pa!istan or under the laws of an
other territor# nothing in this "rdinance limiting the time for the ma!ing of assessment or claims for
refund shall appl to an assessment or claims to which the adCustment gi7es rise# 0eing an assessment or
claim made not later than two ears from the time when all such assessments# adCustments and other
determinations ha7e 0een made# whether in# Pa!istan or else# where# as are material in determining
whether an# and if so what# credit falls to 0e gi7en/
+4- $he pro7isions of sections (< and ()# su0-sections +'-# +4- and +:- of section (( and sections '@@ and
'@4 shall# as far as ma 0e# appl to tax credit under this Schedule as the appl to refunds/
</ Pro7isions as the deduction of tax at source/- +'- $he pro7isions of this rule shall ha7e effect where an
agreement concluded under section '<4 pro7ides for the exemption from Pa!istan tax of an class of
income arising to persons resident in the territor with the Eo7ernment of which the agreement is made#
0eing income from which deduction of tax is re5uired to 0e made under this "rdinance/
+3- An person who pas income of an such class +hereinafter referred to in this rule as Fthe Pa!istan
paerG- to a person in the said territor who is 0eneficiall entitled to the income +hereinafter referred to in
this rule as Fthe non-residentG- ma 0e re5uired# 0 notice gi7en 0 or under the direction of the
,ommissioner# to pa an such income to the non-resident without deduction of tax# and where such
notice is gi7en an income from an source specified in the notice# 0eing income for a ear for which the
agreement has effect# which the Pa!istan paer# after the date on which the notice was communicated#
pas to the non-resident whose name is specified wherein shall# su0Cect to the pro7isions of su0-rules +4-#
+:-# +;- and +<-# 0e paid without deduction of tax/
+4- An notice gi7en under su0-rule +3- ma 0e expressed to 0ecome ineffecti7e if certain specified e7ents
happen or# whether so expressed or not# ma 0e cancelled 0 a notice of cancellation gi7en 0# or under#
the direction of the ,ommissioner# and if# to the !nowledge of the Pa!istan paer# an of those e7ents
happens or if such notice of cancellation is gi7en# an pament made to the non-resident 0 the Pa!istan
paer after the happening of that e7ent 0ecomes !nown to the Pa!istan paer or after the date on which
that notice was communicated to the Pa!istan paer# as the case ma 0e# shall 0e su0Cect to deduction of
tax in accordance with this "rdinance/
+:- 2f it is disco7ered# after a notice has 0een gi7en under su0-rule +3-# that the non-resident is not entitled
to exemption from tax in respect of income from an source specified in the notice# an tax which# 0ut for
the notice# would ha7e 0een deducti0le from an pament made to the non-resident 0 the Pa!istan paer
0ut 0 7irtue of the notice has not 0een so deducted# shall# if a direction to that effect is gi7en 0 or under
the direction of the ,ommissioner# 0e deducted 0 the Pa!istan paer out of so much of the first pament
made to the non-resident after the date on which the direction was communicated to the Pa!istan paer as
remains after the deduction of an tax deducti0le therefrom under this "rdinance and an 0alance which
cannot 0e deducted out of the first such pament shall 0e deducted# su0Cect to the same limitation# out of
the next such pament# and so on until the whole of the tax +the amount of which shall e specified in the
direction- has 0een deducted/
245
+;- An tax which the Pa!istan paer is re5uired to deduct under su0-rule +:- shall 0e paid to the %ederal
Eo7ernment and the pro7isions of section ;@ shall# so far as ma e# appl accordingl/
+<- A notice ma 0e gi7en under su0-rule +3- where income is paid to a person authorised to recei7e that
income on 0ehalf of the non-resident# and in such a case the reference in this rule to pament to the non-
resident shall 0e deemed to include reference to pament to that person/
7. De&iitio'/- +'- 2n these rules#-
+a- 6Pa!istan tax6 means income tax# super tax and surcharge chargea0le in accordance with the pro7isions
of this "rdinance; and
+0- 6foreign tax6# in relation to an territor with which an agreement for the a7oidance of dou0le taxation
has 0een concluded under section '<4# means an tax corresponding to Pa!istan tax which is chargea0le
under the laws of that territor and for which credit ma 0e allowed under the agreement/
+3- Where an agreement concluded under section '<4 pro7ides for an tax chargea0le under the laws of
the territor concerned 0eing treated as income tax# that tax shall# notwithstanding anthing contained in
clause +0- of su0-rule +'- 0e treated as foreign tax/
+4- An reference in this Schedule to foreign tax shall 0e construed# in relation to credit to 0e allowed
under an agreement concluded under section '<4# as a reference onl to tax chargea0le under the laws of
the territor with the Eo7ernment of which the agreement was made/
246
7THE EI>HTH SCHEDALE
+See Part 2B of the %irst Schedule-
RATES OF TAX ON INCOME FROM EXPORT OF >OODS
'
8$he rate of tax paa0le under su0-section +;A- of section ;@# in respect of income of a person +0eing a
resident-# from export of goods shall 0e --
Dhere the i#o$e +ert!i' The r!te
to ex+ort' #o5ere" 0"erH
+a- Part 2/ @/);V of such income or the rate as pres-
cri0ed 0 the ,entral Aoard of Re7enue/
+0- Part 22 '/@V of such income or the rate as pres-
cri0ed 0 the ,entral Aoard of Re7enue/
+c- Part 222 '/3;V of such income or the rate as pres-
cri0ed 0 the ,entral Aoard of Re7enue/9
PART I
+Specified goods manufactured in Pa!istan-
$AA*E
-----------------------------------------------------------------
S/ No/ Description
-----------------------------------------------------------------
'/ *eather and textile made ups
3/ Engineering goods including
electrical goods/
4/ Eoods specified under heading
No/(@/'= of the %ifth Schedule
to the ,ustoms Act# '(<( +2B
of '(<(-
:/ &eweller# pharmaceuticals#
sports goods# toilet linen#
including terr towels# durries#
horticulture products/
'
%irst Paragraph su0s/ 0 %/ "/ 3@@@/
247
;/ ,eramic tiles and wares
</ ,utler
)/ Engineering goods manufactured
in Pa!istan as specified in
2mport of Engineering Eoods
+,ontrol- "rder# '(=4/
=/ Wooden furniture and wooden
doors and windows
(/ Eoods specified in the following
ta0le1
$AA*E
-----------------------------------------------------------------
S/ No// Eoods specified under Description
,hapters# Heading and
Su0-Heading Nos/ "f the
Pa!istan ,ustoms $ariff/
-----------------------------------------------------------------
+i- :3/@; "ther articles of leather/
+ii- ;)/@' Hand-!notted carpets and rugs
+iii- <'/@' .en and 0os o7ercoats# Cac!ets !nitted or crocheted
+i7- <'/@3 Women and girls o7ercoats# Cac!ets !nitted or crocheted/
+7- <'/@4 .en and 0os suits# Cac!ets# trousers# shirts !nitted or
crocheted/
+7i- <'/@; .en and 0os shirts !nitted or crocheted/
+7ii- <'/@< Women and girls 0louses# shirts !nitted or crocheted/
+7iii- <'/@( $-shirts !nitted or crocheted/
+ix- <'/'3 $rac! suits# swim wear !nitted or crocheted/
+x- <4/@'# 3@@@# 4@@@# :@@@ Alan!ets# wool# cotton and ..%/
+xi- <4/@3 Aed linen# ta0le linen and !itchen linen/
'@/ $he rate of tax under this part is applica0le to Begeta0les# fresh fruits and cut
flowers also/
248
PAR$ 22
+Eoods manufactured in Pa!istan-
-----------------------------------------------------------------
S/No/ Description
-----------------------------------------------------------------
'/ Export of goods manufactured in
Pa!istan su0Cect to other pro-
7isions of this Schedule/
3/ +i- RefinedUtreated salt
+ii- Eround 0artes
+iii- Eranite 0loc!s and sla0s
+i7- Heat insulating 0ric!s
+7- .agnesite refractor/
4/ Sale in Pa!istan of goods manu-
factured in Pa!istan against an
international tender# where the
contract under which such sale
is made is appro7ed 0 the
,ommissioner of 2ncome $ax/
PART III
/'oods not covered by $art & and $art &&3
S. No. De'#ri+tio
'/ All other goods not co7ered under Part 2 and Part 22 of this Schedule;
3/ $he following goods or class of goods 8produced or manufactured9 in Pa!istan# namel#-
+i- raw cotton;
+ii- rice;
+iii- rice 0ran;
+i7- wheat 0ran;
+7- lam0 s!in; and
+7i- cotton arn; and
4/ Such other goods as ma 0e notified 0 the ,entral Aoard of Re7enue/9
249

250

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