Income Tax Ordinance 2001

Sections

Short title, extent and commencement

Ordinance to override other laws

Tax on taxable income

Omitted by Finance Act 2014

Subject to this Ordinance, a surcharge payable

Super tax for rehabilitation of temporary displaced persons.

Super tax on high earning persons.

Tax on dividends

Tax on undistributed Profits.

Tan on return on investments in Sukuks.

Tax on certain payments to non-residents

Tax on payments for digital transactions in e-commerce platforms

Tax on shipping and air transport income of a non-resident person

Tax on shipping of a resident person.

Tax on profit on debt

Tax on builders

Tax on developers

Tax on deemed income.

Tax on Builders and Developers

General provisions relating to taxes imposed under sections 5, 6 and 7

Heads of income

Value of perquisites

Employee share schemes

Income from property

Deductions in computing income chargeable under the head “Income from Property”

Non-adjustable amounts received in relation to buildings.

Omitted by the Finance Act, 2006.

Income from business

Speculation business

Deductions in computing income chargeable under the head “Income from Business”

Deductions not allowed

Initial allowance

Omitted by the Finance Act, 2021.

Accelerated depreciation to alternate energy projects.

Pre-commencement expenditure

Scientific research expenditure

Employee training and facilities

Profit on debt, financial costs and lease payments

Provision regarding consumer loans

Profit on non-performing debts of a banking company or development finance institution

Transfer to participatory reserve

Method of accounting

Cash-basis accounting

Accrual-basis accounting

Long-term contracts

Capital gain on disposal of securities

Deduction of losses in computing the amount chargeable under the head “Capital Gains”

Income from other sources

Deductions in computing income chargeable under the head “Income from Other Sources”

Agricultural income

Diplomatic and United Nations exemptions

Foreign government officials

Exemptions under international agreements

Exemption under Foreign Investment (Promotion and Protection) Act, 2022 (XXXV of 2022).

President’s honours

Support payments under an agreement to live apart

Federal Governments, Provincial Government and Local Government

Foreign-source income of short-term resident individuals

Foreign-source income of returning expatriates

Omitted by Finance Ordinance, 2002

Exemptions and tax concessions in the Second Schedule

Exemptions and tax provisions in other laws

Limitation of exemption

Set off of losses

Set off of losses of companies operating hotels.

Carry forward of business losses

Set off of business loss consequent to amalgamation

Carry forward of speculation business losses

Carry forward of capital losses

Limitations on set off and carry forward of losses

Group Taxation.

Omitted by Finance Act, 2022

Workers’ Welfare Fund

Workers’ Participation Fund

Omitted by the Finance Act, 2022.

Deductible allowance for education expenses

Charitable donations

Omitted by the Finance Act, 2022.

Omitted by the Finance Act, 2022.

Contribution to an Approved Pension Fund.

Tax credit for interest paid on low-cost housing loan.

Omitted by Finance Act, 2015.

Section re-numbered as 60C

Section re-numbered as 60D

Tax credit for employment generation by manufacturers

Omitted by Finance Act, 2021

Tax credit for point of sale machine

Miscellaneous provisions relating to tax credits

Omitted by the Finance Act, 2017

Tax credit for investment

Omitted by the Finance Act, 2021

Omitted by the Finance Act, 2021

Tax credit for industrial undertakings established before the first day of July, 2011

Tax credit for certain persons

Tax credit for specified industrial undertakings

Omitted by the Finance Act, 2022.

Income of joint owners

Apportionment of deductions

Fair market value

Receipt of income

Recouped expenditure

Currency conversion

Cessation of source of income

Rules to prevent double derivation and double deductions

Disposal and acquisition of assets

Purchase of assets through banking channel

Consideration received

Non-arm's length transactions

Non-recognition rules

Resident and non-resident persons

Resident individual

Resident company

Resident association of persons

Principle of taxation of individuals

Deceased individuals

An individual as a member of an association of persons

Omitted by Finance Act, 2014

Transfers of assets

Income of a minor child

Principles of taxation of associations of persons

Omitted by the Finance Act, 2007.

Principles of taxation of companies

Disposal of business by individual to wholly-owned company

Disposal of business by association of persons to wholly-owned company

Disposal of asset between wholly-owned companies

Disposal of asset under a scheme of arrangement and reconstruction.

Change in control of an entity

Change in the constitution of an association of persons

Discontinuance of business or dissolution of an association of persons

Succession to business, otherwise than on death

Special provisions relating to insurance business

Special provisions relating to payment of tax through electricity connections

Special procedure for small traders and shopkeepers

Special procedure for certain persons

Additional tax on certain income, profits and gains.

Special provisions relating to the production of oil and natural gas, and exploration and extraction of other mineral deposits

Special provisions relating to banking business.

Special provision relating to capital gain tax.

Special provisions relating to persons not appearing in active taxpayers’ list.

Tax credit for certain persons

Special provisions relating to builders and developers

Special provisions relating to small and medium enterprises

Omitted by the Finance Act, 2022

Geographical source of income

Gain on disposal of assets outside Pakistan

Foreign source salary of resident individuals

Foreign tax credit

Taxation of a permanent establishment in Pakistan of a non- resident person

Thin capitalization

Restriction on deduction of profit on debt payable to associated enterprise

Agreements for the avoidance of double taxation and prevention of fiscal evasion

Transactions between associates

Report from independent chartered accountant or cost and management accountant

Transactions under dealership arrangements

Recharacterisation of income and deductions

Controlled foreign company.

Salary paid by private companies

Unexplained income or assets

Liability in respect of certain security transactions

Minimum tax on the income of certain persons.

Omitted by the Finance Act, 2016

Omitted by the Finance Act, 2016

Alternative Corporate Tax

Return of income

Business bank account

Powers to enforce filing of returns.

Restriction on economic transactions by certain persons.

Persons not required to furnish a return of income

Wealth statement

Foreign income and assets statement

Notice of discontinued business

Method of furnishing returns and other documents

Extension of time for furnishing returns and other documents

Omitted by Finance Act, 2013

Restriction of proceedings

Best judgment assessment

Amendment of assessments

Revision by the Commissioner

Revision by the Chief Commissioner

Omitted by the Finance Act, 2017

Agreed assessment in certain cases

Provisional assessment in certain cases

Assessment giving effect to an order

Powers of tax authorities to modify orders, etc.

Assessment in relation to disputed property

Evidence of assessment

Omitted by the Finance Act, 2025

Appeal to the Commissioner (Appeals)

Procedure in appeal

Decision in appeal

Appellate Tribunal

Appeal to the Appellate Tribunal

Disposal of appeals by the Appellate Tribunal

Reference to High Court

Omitted by Finance Act, 2005

Alternative Dispute Resolution

Omitted by the Finance Ordinance, 2002

Burden of proof

Due date for payment of tax

Recovery of tax out of property and through arrest of taxpayer

Recovery of tax by District Officer (Revenue)

Estate in bankruptcy

Collection of tax in the case of private companies and associations of persons

Recovery of tax from persons holding money on behalf of a taxpayer

Recovery of tax due by non-resident member of an association of persons

Non-resident ship owner or charterer

Non-resident aircraft owner or charterer

Assessment of persons about to leave Pakistan

Recovery of tax from persons assessed in Azad Jammu and Kashmir

Initiation, validity, etc., of recovery proceedings.

Tax arrears settlement incentives scheme

Assistance in the recovery and collection of taxes

Recovery of liability outstanding under other laws.

Advance tax paid by the taxpayer

Advance tax from provincial sales tax registered person

omitted through Finance Act, 2020 dated 30th June, 2020

omitted by the Finance Act, 2021

Gain arising on disposal of certain debt securities.

Payments to non-residents

Omitted by the Finance Act, 2021

Payments for goods, services and contracts

Omitted by Finance Act, 2013

Omitted by Finance Act, 2021

Export of Services

Rent of immoveable property

Prizes and winnings

Petroleum products

Omitted by Finance Act, 2020

Omitted by the Finance Ordinance, 2002

Time of deduction of tax

Exemption or lower rate certificate

Payment of tax collected or deducted

Failure to pay tax collected or deducted

Recovery of tax from the person from whom tax was not collected or deducted

Recovery of amounts payable under this Division

Certificate of collection or deduction of tax

Settlement of transactions liable to Withholding Tax by SWAPS agents

Furnishing of information by banks

Furnishing of information by financial institutions including banks

Furnishing of information by online marketplace, payment intermediary and courier service.

Priority of tax collected or deducted

Credit for tax collected or deducted

Tax collected or deducted as a final tax

Electronic processing and electronic issuance of Refunds by the Board

Additional payment for delayed refunds

Payment of refund through income tax refund bonds.-

Representatives

Liability and obligations of representatives

Power to enter and search premises

Real-time access to information and databases

Exchange of banking and tax information related to high-risk persons.

National Database and Registration Authority (NADRA)

Posting of officer of Inland Revenue.

Notice to obtain information or evidence

Assistance to Commissioner

Accounts, documents, records and computer-stored information not in Urdu or English language

Power to collect information regarding exempt income

Taxpayer’s Registration

Active taxpayers’ list

Compulsory registration in certain cases

Displaying of National Tax Number

Business licence scheme

Record of beneficial owners.

Offences and penalties

Return not filed within due date.

Exemption from penalty and default surcharge

Omitted by the Finance Act, 2010.

Omitted by the Finance Act, 2010.

Omitted by the Finance Act, 2010.

Omitted by the Finance Act, 2010.

Omitted by the Finance Act, 2010.

Omitted by the Finance Act, 2010.

Omitted by the Finance Act, 2010.

Prosecution for non-compliance with certain statutory obligations

Prosecution for failure to furnish information in return of income.

Prosecution for non-registration

Prosecution for false statement in verification

Prosecution for concealment of income.

Prosecution for concealment of and offshore assets

Prosecution for failure to maintain records

Prosecution for improper use of National Tax Number Certificate

Prosecution for making false or misleading statements

Prosecution for non-compliance with notice under section 116A.—

Prosecution for enabling offshore tax evasion

Prosecution for obstructing an income tax authority

Prosecution for disposal of property to prevent attachment

Prosecution for unauthorised disclosure of information by a public servant

Prosecution for abetment

Offences by companies and associations of persons

Institution of prosecution proceedings without prejudice to other action

Power to compound offences

Trial by Special Judge

Appeal against the order of a Special Judge

Power to arrest and prosecute

Procedure to be followed on arrest of a person

Cognizance of offences by Special Judges

Special Judge, etc. to have exclusive jurisdiction

Provisions of Code of Criminal Procedure, 1898, to apply

Transfer of cases

Place of sittings

Power to tender immunity from prosecution

Default surcharge

Reduction in default surcharge, consequential to reduction in tax or penalty

Income tax authorities

Appointment of income tax authorities

Jurisdiction of income tax authorities

Power or function exercised

Authority of approval

Guidance to income tax authorities

Income tax authorities to follow orders of the Board

Condonation of time limit

Power of the Board to call for records

Selection for audit by the Board

Omitted by the Finance Act, 2018

Inserted by the Finance Supplementary (Amendment) Act, 2018

Furnishing of returns, documents etc.

Disclosure of information by a public servant

Omitted by the Finance Act, 2022

Forms and notices; authentication of documents

Service of notices and other documents

Tax or refund to be computed to the nearest Rupee

Receipts for amounts paid

Rectification of mistakes

Appointment of expert

Fee and service charges

Appearance by authorized representative

Proceedings under the Ordinance to be judicial proceedings

Proceedings against companies under liquidation

Computation of limitation period

Bar of suits in Civil Courts

Reward to officers and officials of Inland Revenue

Reward of whistleblowers

Reward and benefits for certain persons

omitted through Finance Act 2019

Automated impersonal tax regime

The Directorate-General of Internal Audit

Directorate General of Training and Research

Directorate General (Intelligence and Investigation), Inland Revenue

Directorate-General of Withholding Taxes

Directorate-General of Law

Directorate-General of Research and Development

Directorate-General of Broadening of Tax Base

Directorate-General of Transfer Pricing

Directorate-General of Immovable Property.

Directorate General of Special Initiative

Directorate General of Valuation

Directorate General of Compliance Risk Management

International Centre of Tax Excellence

Tax Fraud Investigation Wing Inland Revenue

Omitted by Finance Act, 2005

Omitted by the Finance Act, 2021

Omitted by the Finance Act, 2021

Advance tax on cash withdrawal

Advance tax on private motor vehicles

Advance tax on foreign domestic workers

Omitted by the Finance Ordinance, 2002

Brokerage and Commission

Omitted by the Finance Act, 2021

Omitted by the Finance Act, 2021

Tax on motor vehicles

omitted by the Finance Act, 2021

Electricity Consumption

omitted by the Finance Act, 2021

omitted through Finance Act, 2020 dated 30th June, 2020

Telephone and internet users

Advance tax at the time of sale by auction

Omitted by the Finance Act, 2021

Advance Tax on sale or transfer of immovable Property

Advance Tax on TV plays and advertisements

Advance tax on functions and gatherings

Omitted by the Finance Act, 2020

Omitted by the Finance Act, 2016

Omitted through Finance Act, 2020

Advance tax on sales to distributors, dealers and wholesalers

Advance tax on sales to retailers

Omitted by the Finance Act, 2021

Omitted by the Finance Act, 2022

Omitted through Finance Act, 2020

Advance tax on purchase or transfer of immovable property

Omitted by the Finance Act, 2021

Omitted by the Finance Act, 2018

Omitted by the Finance Act, 2018

Advance tax under this chapter

omitted by the Finance Act, 2021

Omitted by the Finance Act, 2022

Omitted through Finance Act, 2020

omitted by the Finance Act, 2021

Omitted by the Finance Act, 2016

omitted through Finance Act, 2020 dated 30th June, 2020

Omitted by the Finance Act, 2021

Omitted through Finance Act, 2019

omitted through Finance Act, 2020 dated 30th June, 2020

Omitted by the Finance Act, 2021

Advance tax on persons remitting amounts abroad through credit or debit or prepaid cards

Bonus shares issued by companies.

Power to make rules

Electronic record

Prize schemes to promote tax culture

Transition to Federal Board of Revenue.

Reference to authorities

Removal of difficulties

Benefits of repealed provisions