Index

Concepts
1. Section 1. Short title, extent and commencement..............................3
2. Section 2. Definitions........................................................................3
3. Section 9. Taxable income.................................................................6
4. Section 10. Total income.....................................................................6
5. Section 69. Receipt of income.............................................................6
6. Section 74. Tax year............................................................................7
7. Section 68. Fair market value..............................................................8
8. Section 70. Recouped expenditure......................................................9
9. Section 71. Currency conversion.........................................................9
10. Section 101. Geographical source of income......................................10
11. Section 3. Ordinance to override other laws....................................10
12. Section 4. Tax on taxable income....................................................10
13. Section 11. Heads of income.............................................................11
14. Section 41. Agricultural income........................................................12
15. Section 90. Transfers of assets...........................................................13
16. Section 66. Income of joint owners...................................................15
17. Section 67. Apportionment of deductions.........................................15
18. Section 44. Exemptions under international agreements...................16
19. Section 73. Rules to prevent double derivation and double
deductions...................................................................................................................................17
20. Section 223. Appearance by authorised representative.......................17
21. Section 2(41). Permanent establishment.................................................20
22. Section 107. Agreements for the avoidance of double
taxation and prevention of fiscal evasion....................................................................................21
23. Section 85. Associates.......................................................................22
24. Section 108. Transactions between associates.....................................24
25. Section 109. Recharacterisation of income and deductions................24
26. Section 72. Cessation of source of income........................................25
27. Section 53. Exemptions and tax concessions in the Second
Schedule......................................................................................................................................25
28. Section 54. Exemptions and tax provisions in other laws.................26
29. Section 172. Representatives...............................................................27
30. Section 173. Liability and obligations of representatives....................29
31. Section 175. Power to enter and search premises................................30
32. Section 176. Notice to obtain information or evidence.......................32
33. Section 180. Power to collect information regarding exempt
income.........................................................................................................................................33
34. Section 181. National Tax Number Certificate...................................33
35. Section 216. Disclosure of information by a public servant................34
36. Section 217. Forms and notices authentication of documents……… 37
37. Section 218. Service of notices and other documents.........................38
38. Section 206. Circulars..........................................................................39
 39. Section 237. Power to make rules........................................................39
40. Section 239. Savings............................................................................41
1. Section 1. Short title, extent and commencement.
(1) This Ordinance may be called the Income Tax Ordinance, 2001.
(2) It extends to the whole of Pakistan.
(3) It shall come into force on such date as the Federal Government
may, by notification in Official Gazette, appoint.
(1979: Sec 1)
2. Section 2. Definitions.
(29) “income” includes any amount chargeable to tax under this
Ordinance, any amount subject to collection [or deduction] of tax
under section 148, 2[150, 152(1), 153, 154, 156, 156A, 233, 233A
and], sub-section (5) of section 234, 3[any amount treated as
income under any provision of this Ordinance] and any loss of
income but does not include, in case of a shareholder of a 4[
]company, the amount representing the face value of any bonus
share or the amount of any bonus declared, issued or paid by the
company to the shareholders with a view to increasing its paid up
share capital;
(1979: Sec 2(24))
(11A) “charitable purpose” includes relief of the poor, education, medical
relief and the advancement of any other object of general public
utility;
(New)
(36) “non-profit organization” means any person other than an
individual, which is –

(a) established for religious, educational, charitable, welfare or

development purposes, or for the promotion of an amateur sport;

(b) formed and registered under any law as a non-profit

organization;

(c) approved by the Commissioner for specified period, on an

application made by such person in the prescribed form and
manner, accompanied by the prescribed documents and, on
requisition, such other documents as may be required by the
Commissioner;
and none of the assets of such person confers, or may confer, a private benefit to
any other person;
(New)
(40) “Pakistan-source income” means Pakistan-source income as
defined in section 101;
(1979: Sec 12)
(44) “prescribed” means prescribed by rules made under this
 Ordinance;
(1979: Sec 2(33))
(3) “approved gratuity fund” means a gratuity fund approved by the
Commissioner in accordance with Part III of the Sixth Schedule;
(1979: Sec 2(4))
(4) “approved superannuation fund” means a superannuation fund, or
any part of a superannuation fund, approved by the Commissioner
in accordance with Part II of the Sixth Schedule;
(1979: Sec 2(5))
(48) “recognised provident fund” means a provident fund recognised by
the Commissioner in accordance with Part I of the Sixth Schedule;
(1979: Sec 2(37))
(56) “Schedule” means a Schedule to this Ordinance;
(New)
“tax” means any tax imposed under Chapter II, and includes any penalty, fee or
other charge or any sum or amount leviable or payable under this Ordinance;
(1979: Sec 2(43))
(63) “taxable income” means taxable income as defined in section 9;
(New)
(64) “taxpayer” means any person who derives an amount chargeable to
tax under this Ordinance, and includes –
(1979: Sec 2(6))

a) any representative of a person who derives an amount

chargeable to tax under this Ordinance;
b) any person who is required to deduct or collect tax under
Part V of Chapter X and Chapter XII; or
c) any person required to furnish a return of income or pay tax
under this Ordinance;
(67) “tax treaty” means an agreement referred to in section 107;
(New)
(68) “tax year” means the tax year as defined in sub-section (1) of
section 74 and, in relation to a person, includes a special year or a
transitional year that the person is permitted to use under section
74;
(1979: Sec 2(26))
(69) “total income” means total income as defined in section 10;
(1979: Sec 2(44))
(11) “Central Board of Revenue” means the Central Board of Revenue
established under the Central Board of Revenue Act, 1924 (IV of
1924);
 (1979: Sec 2(13))
(48A) “Regional Commissioner” means a person appointed as a Regional
Commissioner of Income Tax under section 208 and includes a
Director-General of Income Tax and Sales Tax;
(65) (1979: Sec 2(37A))
(49A) “repealed Ordinance” means Income Tax Ordinance, 1979 (XXXI
of 1979);
(New)
(29A) “income year” means income year as defined in the repealed
Ordinance;
(1979: Sec 2(26))
3. Section 9. Taxable income.
(New)

The taxable income of a person for a tax year shall be the total income of the
person for the year reduced (but not below zero) by the total of any deductible
allowances under Part IX of this Chapter of the person for the year.
4. Section 10. Total income.
(1979: Sec 2(44))
The total income of a person for a tax year shall be the sum of the person’s
income under each of the heads of income for the year.
5. Section 69. Receipt of income.

Inserted by the Finance Act, 2003.

2
The figures, commas and word “153, 154 and 156,” substituted by the Finance Act, 2005.
3
Inserted by the Finance Act, 2003.
4
The word “domestic” omitted by the Finance Act, 2003.
(New)
For the purposes of this Ordinance, a person shall be treated as having received an
amount, benefit, or perquisite if it is –

(a) actually received by the person;

(b) applied on behalf of the person, at the instruction of the person or
under any law; or
(c) made available to the person.

Inserted by the Finance Act, 2003.

2
The figures, commas and word “153, 154 and 156,” substituted by the Finance Act, 2005.
3
Inserted by the Finance Act, 2003.
4
The word “domestic” omitted by the Finance Act, 2003.