For business information, annual reports, laws, ordinances, regulations and articles.

	Web Paksearch.com

THE SECOND SCHEDULE
(see Section 5)
PART I
EXEMPTIONS FROM TAX

Wealth tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee--

(1) assets in respect of which Zakat or contribution in lieu thereof has been deducted at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), in that year or during the Zakat year commencing immediately before the valuation date.
Explanation.-- "Zakat year" means year according to the Hijra Calendar for which Zakat is chargeable, commencing on the first day of Ramadhan-ul-Mubarak and ending with the last day of the following Sha'ban-ul-Moazzam;

(2) the agricultural land received by an assessee from Government in pursuance of any gallantry or merit award instituted or approved by the Federal Government;

(3) agricultural land, subject to a maximum of one million rupees in value;

(4) one dwelling house, at the option of the assessee, situated on or in the immediate vicinity of the agricultural land, owned by a person to whom sub-para (i) of paragraph (A) of Part I of the First Schedule (relating to agricultural assets) applies;

(5) the tools and implements used by the assessee for the raising of agricultural produce;
Explanation.-- For the purposes of this clause, tools and implements include tractors, tube wells and other farm machinery but do not include any plant or machinery used in any tea or other plantation in connection with the processing of any agricultural produce or in the manufacture of any article from such produce;

(6) one pick-up owned by the owner of agricultural assets and used by him for agricultural purpose and one other motor vehicle owned by such person;

(7) assets-
(i) brought or remitted by an assessee into Pakistan, or received by an assessee from outside Pakistan, in the year in which they are brought, remitted or received and the following five years;

(ii) created by an assessee out of remittances received in, or brought into Pakistan, through normal banking channels, during the period referred to in sub-clause (i):
Provided that where investment in the assets is not made entirely out of remittances received in, or brought into Pakistan through normal banking channels, the exemption shall apply in the same ratio as the foreign remittances bear to the total investment;

(iii) represented by Special U.S. Dollar Bonds Rules, 1998. For the period for which such bonds are held by the original registered owner, and in the case of the subsequent registered owners, for the unexpired period of maturity of such bonds:

Provided that any asset created out of the sale proceeds of such bonds by the original registered owner shall also enjoy exemption for an aggregate period of six years reckoned from the year in which these were converted from the Foreign Currency Accounts or deposits and the following five years.

(8) asset representing the amount deposited in a private foreign currency account held with an authorized bank in Pakistan in accordance with the Foreign Currency Accounts Scheme introduced by the State Bank of Pakistan;

(8A) Rupee amounts or assets, created out of withdrawal from foreign currency accounts or encashment of US Dollar Bearer Certificates and Foreign Currency Bearer Certificates on or after the twenty-ninth day of May, 1998, in the year of conversion or creation of assets and the following five years:

Provided that where investment in the assets is not made entirely out of the aforesaid accounts and certificates, the exemption shall apply in the same ratio as the said conversion or encashment bears to the total investment.

(9) (i) Bearer National Fund Bonds, issued under the Bearer National Fund Bonds Rules, 1985;

(ii) Special National Fund Bonds, issued under the Special National Fund Bonds Rules, 1985; [ ]

(iii) Foreign Exchange Bearer Certificates, issued under the Foreign Exchange Bearer Certificates Rules, 1985; and

(iv) Foreign Currency Bearer Certificates issued under the Three Year Foreign Currency Bearer Certificates Rules, 1997.

(10) the asset representing the amount invested in any certificate issued in pursuance of the U.S. Dollar Bearer Certificate Rules, 1991;

(11) furniture, household utensils, wearing apparel, provisions and other articles (excluding jewellery and cars) intended for the personal or household use of the assessee;

(12) (1) one residential house, owned and occupied by the assessee for purposes of his own residence, where the assessee opts to exclude such house from his assets:

Provided that such option may be exercised by either of the spouse;

Provided further that where an assessee exercises an option under this sub-clause, proviso (a) to sub-paragraph (2) of paragraph A of the First Schedule shall not apply.

(2) One shop owned and occupied by the assessee for the purposes of his own business;

(3)

(13) books and manuscripts belonging to an assessee, not intended for sale;

(14) Investment not exceeding two hundred thousand rupees or 50% of the share holding of tax payer, whichever is higher, in stocks or shares, of a public company, engaged in an industrial undertaking whose shares are subject of dealings in a registered stock exchange in Pakistan at any time during the income year and which remained listed on the stock exchange till the close of that year, acquired otherwise than by purchase or transfer from a previous holder of such stocks or shares, for a period of two years commencing from the year in which such stocks or shares are issued for public subscription.

(15) drawings, paintings, prints, works of art or scientific collection which are of national, scientific or historic interest, belonging to an assessee and not intended for sale;

(16) the right or interest of the assessee in any policy of insurance before the moneys covered by the policies become due and payable to the assessee;

(17) the right of the assessee to receive a pension or other life annuity in respect of past services under an employer;

(18) the amount standing to the credit of an assessee, being a salaried employee, in any provident fund maintained by his employer to which the Provident Funds Act, 1925, applies or which is a recognized provident fund within the meaning of Chapter IX of the Income Tax Act, 1922 or Part I of the Sixth Schedule to the Income Tax Ordinance, 1979;

(19) final payment of accumulations in a provident fund referred to in clause (18) and the commuted amount of pension received during the year;

(20) the tools, instruments and other apparatus necessary to enable the assessee to carry on his profession, vocation or scientific research;

(21) the rights under any patent or copyright belonging to the assessee:
Provided that these are not held by him as assets of a business, profess-ion or vocation and no income or benefit accrues to him therefrom;

(22) any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in Pakistan;

(23) the interest of the assessee in the coparcenary property of Hindu undivided family of which he is a member;

(24) Compensation Bonds issued under the West Pakistan Land Reforms (Payment of Compensation) Rules, 1961, held by an assessee not being a transfer for valuable consideration;

(25) immovable property held by the Chambers or Associations of Commerce, Trade and Industry recognised by the Federal Government;

(26) assets belonging to institutions of the Aga Khan Development Network (Pakistan), listed in Schedule I of the Accord and Protocol, dated November 13, 1994, executed between the Government of the Islamic Republic of Pakistan and Aga Khan Development Network, held on the valuation dates relevant to the assessment year 1995-96 and onwards;

(27) assets of the -
(i) Institution of Engineers, Pakistan, Lahore;
(ii) Pakistan Medical Association, Rawalpindi; and
(iii) International Irrigation Management Institute, Pakistan.

(28) in respect of wealth in Pakistan (except private immovable property situated in Pakistan) owned by--
(a) head of a mission, members of the diplomatic staff of the mission and members of their families forming part of their respective households; and
(b) consular officers, consular employees and members of their families forming part of their respective households.

Explanation.-- Premises of a mission or a consulate and the residence of the head of a mission or career head of a consular post, of which the sending state or any person acting on its behalf is the owner or lessee, shall not be treated as "private immovable property."

This exemption shall not apply to a citizen of Pakistan.

(29) Assets representing amounts deposited under Prime Minister’s Fund for National Debt Retirement.

(30)

(31) Assets owned and held by a company, in which the Federal Government and WAPDA holds, wheather jointly or severally, more than ninty-nine per cent shares, engaged in generation of thermal power, transmission or distribution of electricity, for the assessment year 1998-99, 1999-2000 and 2000-2001.

(32) The houses built on land area not exceeding six marlas (one hundred fifty square yards) or apartments with covered area not exceeding twelve hundred square feet for five years, constructed under Prime Minister's Programme for Economic Revival (Housing Sector).

(33) Any assets declared under the "Tax Amnesty Scheme, 2000" made under section 59D of the Income Tax Ordinance, 1979 (XXXI of 1979), in respect of any assessment year commencing on or before the first day of july, 1999, and subsequent assessment years.

Assets, or classes of asset, or persons or classes of persons shall be exempt from the operation of such provisions-of this Act, as are enumerated below, subject to such conditions and to the extent, specified hereunder:-

(1) The provisions of sections 18, 31B and 36 shall not apply for failure to--
(a) furnish on the due date or dates a return or returns of net wealth; or
(b) disclose an asset or assets in the return or returns of wealth; or
(c) disclose an asset fully or correctly, for any assessment year ending on or before 30th June 1995. This exempt-ion shall be available subject to the following conditions, namely:-
(i) the return for assessment year 1996-97 is filed by the due date;
(ii) tax due is paid along with the return of wealth; and
(iii) full and correct declaration of assets is made in the return for the assessment year 1996-97.

(2) The provisions of clause (d) of sub-section (1) of section 14, section 14C and section 14D shall not apply to the assets owned by companies specified in entry (31) of Part - I of this Schedule for the assessment year 1998-99, 1999-2000 and 2000-2001.

(3) The provisions of sections 14C or 14D shall not apply to any person who is registered under the Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961 (XLVI of 1961) and is approved under clause (d) of sub-section (1) of section 47 of the Income Tax Ordinance, 1979.

(4) The provisions of section 14D shall not apply to any assets owned by a technical cooperation officer, not being a citizen of Pakistan, provided in pursuance of the Memorandum of Understanding signed on the twenty-third day of August, 1992, between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Islamic Republic of Pakistan, concerning technical Cooperation and British Council Activities.

	Web Paksearch.com

Home | About Us | Contact | Information Resources