Nature of Business Exemption Reference Conditions

Agriculture Sector

Agricultural income Agricultural income Section 41 Income would be exempt up to the

derived by a person of the amount where provincial sales tax has
shall be exempt from Income Tax been paid.
income tax. Ordinance

Investment in Mutual Funds and REIT

Investment in Total income of NIT. Second If at least federal

Securities of federal Schedule, Government securities’ 90% units are
government Part I, held by the public at year end and at
Clause least 90% of its
57(1)(i) of income of the year is distributed
the among the unit-holders.
Ordinance
Total Income of Investment in (Second If at least 90% certificates are held by
Mutual fund and Securities of federal Schedule, the public at year end and at least 90%
Investment government. Part I, of its income of the year is distributed
corporation of Clause among the certificate-holders.
Pakistan 57(1)(ii) of
the
Ordinance
Mutual fund, No income tax on any Second Any instrument of redeemable capital
investment company, income (other than Schedule, if at least 90% of
or a collective capital gain on Part I, its income is distributed among the
investment scheme or certain investments Clause unit-holders.
a Real Estate held for less than 12 57(2) of the
Investment Trust months). Ordinance).
(REIT) Scheme or
Private Equity and
Venture Capital Fund
or the National
Investment (Unit)
Trust of Pakistan
Collective No income tax on any Second If at least 90% of its
Investment Scheme or income derived by a Schedule, total profit as reduced by the amount
a REIT Scheme Collective Part I, of transferred
Investment Scheme or Clause to a mandatory reserve are
a REIT Scheme. 98 of the distributed amongst the
Ordinance shareholders.
Venture Capital profits and gains Clause 101
Company and derived between July
Venture Capital Fund 1, 2000 and June
 Investment in Sports sector

Regulation and No income tax on any Second except Pakistan Cricket Board
encouraging of major income derived by any Schedule, (PCB) which is subjected to
games board or other Part I, concessional rate of tax of 4%.
organization Clause 98
established by of the
government in Ordinance
Pakistan for the
purpose of controlling,
regulating or
encouraging
major games and
sports.

Investment in Gwadar

Taxpayer from for a period of 23 years. Clause

businesses set up in 126AA
the Gwadar Free Zone
Area
A taxpayer from an for a period of 10 years. Clause
industrial undertaking 126D
set up in
Gwadar Export
Processing Zone

Investment in Food Sector

establishing and A taxpayer, being Clause

operating halal meat company, from an 126K
production unit industrial
undertaking set up for
establishing and
operating halal
meat production unit for
a period of four years.

Taxpayer from a fruit Set-up in Baluchistan Clause

processing or province, Malakand 126H
preservation unit division, Gilgit-
Baltistan and Federally
Administered Tribal
Areas (FATA)
for a period of five
years.
 Energy and Power Sector

Renewable energy A taxpayer from an Clause 126

industrial undertaking
set up by
December 31, 2016 and
engaged in the
manufacture of
plant, machinery,
equipment and items
for generation of
renewable energy from
sources like solar and
wind for a
period of five years.
Electric power Pakistan to a foreign Clause 132 However, exemption not available to
enterprise (Clause Hub Power Co. Ltd. and oil
131(b)). fired power plants.
3.26 Profit and gains
derived by a taxpayer,
being company
not controlled by
federal, provincial or
local government,
from an electric power
generation project and
also
available to the
expansion projects of
the existing
Independent Power
Producers (IPPs).
Power Profits and gains Clause
derived by a taxpayer 136
from a coal
mining project in
Sindh, supplying coal
exclusively to
power generation
projects.
Liquefied No income tax on Second
Natural Gas (LNG) profit and gain derived Schedule,
by Liquefied Part I,
Natural Gas (LNG) Clause 141
terminal operators and of the
terminal Ordinance
owners for a period of
five years.
 Industrial Undertakings and Manufacturer of Cellular items sector
taxpayer from an A taxpayer from an Clause
industrial undertaking industrial undertaking 126L
set up in the
province of Khyber
Pakhtunkhwa and
Baluchistan for a
period of five years
A taxpayer, being set-up in Larkana Clause
company, from an Industrial Estate for a 126C
industrial period of 10 years
Undertaking
A taxpayer from an Clause
Manufacturer industrial undertaking 126N
engaged in
the manufacturing of
cellular mobile phones
for a period
of five years
Taxpayer, being for a period of 10 years Clause
company, from a 126M
transmission line
Project
Provided that exemption under this
clause shall be admissible where;
1. the industrial undertaking is
setup between the first day of
July, 2015 and 30th day of
June,2018, both days inclusive;
and
2. the industrial undertaking is
not established by the splitting
up or reconstruction or
reconstitution of an
undertaking already
inexistence or by transfer of
machinery or plant from an
undertaking established in
Pakistan at any time before 1st
July 2015.
Provided that the industrial
undertaking has been setup and
commercial production has
commenced between the first day of
July, 2015 and the thirtieth day of
June, 2017 and the industrial
undertaking is not formed by the
splitting up, or the reconstruction or
reconstitution, of a business already
inexistence or by transfer to a new
business of any machinery or plant
used in a business which was being
carried on in Pakistan
 Information Technology sector

Exports of computer Clause 133 Provided that eighty per cent of the
I.T software or IT services export proceeds is brought into
or IT enabled Pakistan in foreign exchange remitted
services up to June 30, from outside Pakistan through
2019 normal banking channels.
Explanation.- For the purpose of this
clause –
(a) ―IT Services‖ include software
development, software maintenance,
system integration, web design, web
development, web hosting, and
network design, and
(b) ―IT enabled services‖ include
inbound or outbound call centers,
medical transcription, remote
monitoring, graphics design,
accounting services, HR services,
telemedicine centers, data entry
operations 3[, locally produced
television programs] and insurance
claims processing.

Fees for technical Any taxpayer other Clause

services than company as is 131(b)
derived by him
by way of fees for
technical services
rendered outside
Pakistan to a foreign
enterprise
Startup Services Profit and gains derived Clause 143 A business of a resident individual, AOP
by a start–up as defined of First or a company that commenced on or
in clause (62A) of schedule after first day of July 2012 and the
section 2 for the tax person is engaged in or intends to offer
year in which the start- technology driven products or services
up is certified by the to any sector of the economy provided
Pakistan Software that the person is registered with and
Export Board and the duly certified by the Pakistan Software
following two tax years. Export Board (PSEB) and has turnover
of less than one hundred million in each
of the last five tax years.