By: Muha

xpenditure made by amalgamated tnrnad Un,

AnY e company i ar Zaka
ses maY be; s allowed §9
expen as ad 8
Legal expenses; d1Jct1on. Th
1. ese
. Financial advisory services; and
2
. Other administrative costs relating
3 to Planning
amalgamation. and 1
mplementatlon
Of

. Is used for Business [20(1A)]

An1111a
·mals which have been used for the P
If an1 urposes of th
...,nse than as stock-in-trade and have di d e business or P~ t .
othe, v•• e or become o ess,on
h purposes, the difference between the actu I permanently useless f
sue a cost to the t . or
d the amount, if any, realized in respect of the axpayer of the animals
an carcasses or animals .
deduction. ' will be allowed
as . .
Example: .
Actua.l cost of tne animals to the taxpay~r\ I

1,00,000
Less: Amount realized in respect of carcasses or animals
Amount allowed as deduction 96,000

. -\ j
I..,
. .

DEDUCTIONS NOT ADMISSIBLE [21 and other provisionss]

Following expenses are not allowed as deduction when income is calculated under the
head 'Income from Business;
Ir,~ 1a.(·
1. Anl_!ax, cess or rate levied on the profits or gains of the business. Example;
Income Tax. (Expla-Aation: Ta~~s relat~d to business are allowed expense but
. 1;.11:qse. •
I_D,£,ome tax or any other tax on income is not allowed expense.) -
r.: cttdu J. ' £. ,Ji<Pv &,yr~ Jo w-N1II fetyvi.&J /
/J C:,&f 7 f&d; (He

2· Any amount of tax deducted at source from an amount received by the person. M~f'/

! lb lf>1
~°" 'Lb ~er'r~ to
--- (AJ,v
¼{ '9t_ ~ltd. 'a...t --1. kb<-+eJ '\UM
b-e_ al~t.c/ · J'

~t.. wdl ~t-

 By: Muharnrnact lJ
1
lnt1t I
~e_.t: Y\ . .
which tax 1s required to be d
yments fro m ed~ct~~ 1
.
3. Any of the following pa I
$
a) salary,
bl rent,
cl brokerage or commission,
d) profit on debt,
e) payment to non-resident,
fl payment for services or fee paid by the person

4. Any amount of payment on wh.ich tax at source was deducted but has n~

--
paid. 1

5. Any entertainment expenditure in excess of such limits or in violation

.J conditions as may be prescribed in the la'l,, ('(] t . ol/l q_//.Ju) 'Th~ nL011.
WMWn~ ~ e . o~v 1·1.
I Mttht4k, (fJf.vwl~ ~fAit'),,.eJ- ~ . q~.JJ.
6. Any contribution made by the person to a fund that is not a recognize.9 Pro~
fund, approved pension fund, approved superannuation fund, or ap~
gratuity fund; ~r PF f4JJ he >'1."u,~),1./~
....
.,r-'( t4-Jtl be_ ~q_h le -)
7. Any contribution made by the person to any provident or other fund esta~
for the benefit of employees of the person, unless the person has made ef!
arrangements to secure that tax is deducted under sectio~ 1a1
deduction on salary) from any payments made by the fund in respect 0!1
the recipient is chargeable to tax under the head "Salary".

8. Any fine or penalty paid or paya~le by the person for the violation o~
or regulation.

9. Any pwsonal expenditure incurred by the person.

,' ,.
 By: Muhammad Umar Zaka 71

10.Any amount carried to a reserve fund or capitalized In any way. E.g: Dividends. .
;~l oJvl~ p--Ai'cl 1nt:(J'YY\R. ,-ht) l~ V,)
\\fl1 M1 .t-t..pw!-l- ~O!i Bkr'l.

11. Any profit on ~t, brokerage, commission, salary or other remuneration paid by
an association of persons (AOP) to a member of the association.
'p~hf. fcwi>U.rS ~Yllff be. F'4 ~Jc»1~ .
~eUtW
Swwe f?O ~t .
\.Any expenditure under a single account head exceeding Rs. _, 2,50,00~ in
aggregate shall be inadmissible if the payment is not made through a crossed
..
c~e_gue or a bank draft. Ho~er, this provision shall not be applicable to:

I. Utility bills. ;J~ "-"do.,_, "4 i,.,,J.

ll•~v',~~ wk1ir+
Postage. ,~ .f.-Btb !Y(WJ]f(1i()? $/,uµt_Jtf
uoY j__t!lll;"'-_
= ·~ .
Single transactions not exceeding Rs. 25,000.
.lmM.J.i
·~· UV
Payments on account of freight charges.

Travel Fare

VI. Any account credited by direct transfer to an employee's bank account for
-
reimbursement of expenses incurred on behalf of the taxpayer

VII. Payments made to discharge any statutory obligation ·(such as duties,

taxes, octroi, export tax, fines, fee, cess, etc.)
tM
Remember : Transactions having verifiability from bank statement of respective
payer and payee and done through Online transfer of payment from the business
 By: Muhamrnact lJ I.
lllat II'
1 account of the payee
886
account of the payer to the bus nrough the banking chan or thro ug~
th
shall be treated as transactions nel. Ct~

I .
13.Any salary paid or payable exceeding Twenty Five thousand I\J
lleeg
other than by a crossed cheque or direct transfer of funds to the ernp~
I,

X, 14.Expenditure of a non-resident business on account of 'Head Ofti

wh.ich exceeds the allowable limi!S. The allowable deduction on~ ''P\
office expenditure· is calculated as follow: ~ ,)
Total Head Office Expenditure x Total Tumover in Pakistan I
Total World Turnover
I ..

15 ·Any
. P1.9vis1on
· · against
. the profits of the business e g prov· .
PfL"I, J f,,J JJ/J ' . .' 1s1on for bad deai
'
16·Any donation to an ~ approved institution.

17.Any expenditure of a capital nature.. (Section 40 (6))

\·