E xemptions under part i of 2nd schedule

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E xemptions under part i of 2nd schedule

  1. 1. EXEMPTIONS UNDER ND PART-I OF 2 SCHEDULE
  2. 2. EXEMPTIONS FROM TOTAL INCOME The income or classes of income, or persons or classes of persons specified in the Second Schedule shall be subject to the conditions and shall be restricted to the extent specified under each case. Where any income which is exempt from tax under any provision of the Second Schedule, such income, as may be specified in the said Schedule and subject to such conditions as may be specified therein, shall be included in the total income, however the tax shall not be payable in respect of such income
  3. 3. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE Salary Income Employees of Agha Khan Devlopment Network (Pakistan). [Clause (3) The salary income of a person working as expert, advisor, consultant or senior management staff in any institution run by AKDNP is exempt if the said person is not a citizen of Pakistan.
  4. 4. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE Salary Income of Seafarer [Clause 4] The salary income of a Pakistani Seafarer working on a vessel shall be exempt from tax if any of the following conditions is satisfied: 1. The person has worked on vessel for 183 days or more during a tax year. 2. The income is remitted to Pakistan through normal banking Channel maximum within two months of the relevant income year, if it is a foreign vessel.
  5. 5. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE Allowances etc to Person W orking Outside Pakistan [Clause 5] Any allowances and perquisites paid by the Government to a Pakistani, rendering services outside Pakistan are exempt from tax
  6. 6. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE Pension Received by a Pakistani Any amount received as pension by a Pakistani is exempt. This exemption shall be withdrawn if the retired person is re-employed by the same employer. Where a person receives more than one pension, then only one pension having higher amount will be exempt and remaining others will be taxable [Clause 8]
  7. 7. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE Pension Received by a Pakistani 1. 2. 3. 4. 5. 6. Pension received by the follwing persons is exempt from tax: Any citizen of Pakistan Members of Armed Forces of Pakistan. Employees of the Federal Government or a Provincial Government Families and dependents of public servants or members of armed forces of Pakistan died during service. Commutation of pension received from Government or under any pension scheme approved by Board. Pension received by dependents of Shuhuda and public servants died during service.
  8. 8. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE GRATUITY OR COMMUTATION OF PENSION [CLAUSE 13] . Any amount of gratuity or commutation of pension received by an employee on his retirement or his heirs upon the death of an employee is exempt from tax subject to the limits specified.
  9. 9. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE LEAVE ENCASHMENT [CLAUSE 19] . Any amount received on encashment of “leave preparatory to retirement” (LPR) is exempt, if it is received by a Government Employee.
  10. 10. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE Annuity [CLAUSE 20] . Any Income received as annuity is exempt upto Rs. 10,000 per annum if it is received from Pakistan Postal Annuity Certificate Scheme.
  11. 11. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE Amount Received From Voluntary Pension System [CLAUSE 23A] . 50% of the accumulated balance received shall be exempt from tax if the following conditions are satisfied: It is received from the voluntary pension system offered by a pension fund manager under the Voluntary Pension System Rules, 2005; and It is received by 1. 2. 1. 2. . An eligible person on his retirement or on disability rendering him unable to work or Nominated survivors on death of the eligible person
  12. 12. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE MONTHLY INSTALMENT FROM AN INCOME PAYMENT PLAN (23B) The amount received as monthly installment from an income payment plan shall be exempt from tax if the following conditions are satisfied: 1. 2. . The amount is invested out of: 1. The accumulated balance of an individual pension accounts with a pension fund manager; or 2. An approved annuity plan or another individual pension account of eligible person or the survivors pension account maintained with any other pension fund manager The accumulated balance is invested for a period of ten years.
  13. 13. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE COMPENSATORYALLOW ANCE (Clause 35) Any amount received as compensatory allowance is exempt up to 75% of the gross salary of the recipient if the following conditions are fulfilled: 1. 2. . The recipient is a citizen of Pakistan He is locally recruited in a Pakistan Mission abroad.
  14. 14. EXEMPTIONS UNDER PART-I OF 2ND SCHEDULE Perquisites [Clauses 51 to 56] 1. 2. 3. 4. 5. . Perquisites in respect of residents, conveyance and sumptuary (entertainment) allowance granted to the following persons is exempt from tax: President of Pakistan Provincial Governors Chiefs of Staff, Pakistan Armed Forces Corps Commanders Judges of the supreme court and the High Court

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