Income from Salary

Sr. Taxable
Page |No1 Particulars Rs. Rs
1 Basic Salary (Salary per month × Number of months employed during the tax year) X
2 Bonus X
3 Commission X
4 Fees and Rewards X
5 Overtime Payment received from employer X
6 Amount received from employer for meeting any condition X
7 Amount received from employer as a condition for joining his organization X
8 Director's fee X
9 Fee's for attending BOD meetings X

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Any allowances provided by employer I cash ( other than Conveyance, House rent
and medical allowance)
• Dearness Allowance
• Milk allowance

Totally Taxable
• Cost of living allowance
• Lunch allowance
• Education allowance
• Utilities allowance
• Inducement allowance
• Entertainment allowance
Amount received as work condition supplements due to unpleasant or dangerous
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working conditions X
12 Special merit award X
13 Leave fare assistant provided by employer (OR) Air ticket reimbursed X
14 Reimbursement of personal expenses of employee provided by employer
• Utility bills of employee reimbursed by employer
• Internet usage of employee reimbursed by employer
Taxable
Totally
• Children education expenses and school fee reimbursement by employer
• Funeral expenses of employee’s parents paid by employer
• Petrol provided by employer for residential generator of employee
15 Reimbursement of expenses (Allowance received) to meet official duties
• TA/DA ( Special allowances ) received from employer
Exempt
Totally

• Conveyance allowance received to meet official duties

• Free pick and drop facilities from home to office and vice versa
• Training expense of employee reimbursed by employer
16 Obligation or liability of employee towards third party paid by employer
 • Life Insurance premium of employee paid by employer
• Annual subscription of club joined by employee paid by the employer

Taxable
Totally
• Vehicle obtained by employee on rent a car basis but rent of vehicle is paid
by the employer
• School fee paid by employer
Page |172 Obligation or liability of employee towards employer is waived by the employer
• Loan waived by employer X
18 Services of domestic servants (Housekeeper, gardener, driver) provided by employer
Salary of domestic servants borne and paid by employer X
Less: Amount given by employee to employer for domestic servants (if any) (X) X
Assets (TV, Car, House, Fridge, Furniture, Washing machine) owned by employer but
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transferred/sold to employee
FMV of asset at the date of transfer or sale to employee X
Less: Amount paid by employee for purchase of asset from employer (X) X
Assets (TV, Fridge, Furniture, Washing machine) owned by employer but given to
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employee for use only
Depreciation of the assets charged by the employer X

Accommodation
21 House rent allowance X
22 Accommodation provided by the employer (Higher of )
a) Annual letting Value
b) 45%( or 30%) of basic salary or MTS X X

Conveyance
23 Conveyance or travelling allowance X
24 Motor Vehicle Provided by employer only for official use
25 Motor Vehicle Provided by employer only for personal use
• Owned vehicle given by the employer : 10% of the cost of the vehicle to the
employer
(Or)
• Leases vehicle given by the employer : 10% of the FMV of the vehicle at the
inception of the lease X
26 Motor Vehicle Provided by employer for official and private use
• Owned vehicle given by the employer : 5% of the cost of the vehicle to the
employer
(Or)
• Leases vehicle given by the employer : 5% of the FMV of the vehicle at the
inception of the lease X
Guidelines for conveyance allowance:
• Taxable benefits of conveyance will be time apportioned if the vehicle isn’t
provided for the complete year
• If any expenditure paid by the employee connected with the conveyance
shall be deducted from the allowance provided
 Medical Allowance and Medical facility
27 Medical Allowance only
Amount received X
Page | 3 Less: 10% of the basic salary (X) X
Medical facility ( free hospitalization or medical expenses reimbursement) provided
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by the employer only
• As per terms of contract provided with the NTN number of the practitioner
(Fully Exempt)
• Not as per the terms of employment ( Totally Taxable) X
29 Medical allowance and medical facility both are provided by the employer
• Medical facility per terms of contract provided with the NTN number of the
practitioner (Fully Exempt)
• Medical allowance (Fully taxable )
(Or)
• Medical facility not as per the terms of employment ( Fully Taxable) X
• Medical allowance received X
Less : 10% of basic Salary (X) X

Concessional Loan from Employer

30 Interest on Loan @ 10% Benchmark Rate X
Less Actual amount of interest paid to the employer (X) X
Condition for loan:
• The loan must be obtained after the 1st July 2002
• The amount of loan must be more than R. 1,000,000
• The Rate at which the interest is obtained must be less than the benchmark rate
• Where the loan benefit is extended due to waiver of interest by such employee then the loan will be
exempt
Note:
• If the loan obtained from employer is used in the purchase of asset or property or business for which the
income is chargeable under the head of income then the actual amount of interest or interest @ 10%
whichever is higher shall be allowed as deduction
• If the loan obtained from the employer is used in the purchase of property or construction of new house
then the actual amount of interest paid to the employer shall be allowed as deductible allowance under
section 64 A.

Provident Fund
31 Government Provident fund ---
32 Unrecognized provident fund
• Employee’s contribution ( No treatment) X ---
• Employer’s contribution ( Fully Exempt ) X ---
• Interest Credited ( Fully Exempt ) X ---
• Receipt of accumulated balance ( Only employer’s contribution and interest
credited shall be taxable ) X X
33 Recognized provident fund
• Employee’s contribution ( No treatment) X ---
• Employer’s Contribution X
Less : Exempt up to lower of
 i. Rs. 150,000 (or)
ii. 1/10 of ( Basic salary + Dearness allowance ) (X)
X
• Interest on recognized provident fund credited X
Less : Exempt up to higher of
i. 1/3rd of ( Basic salary + Dearness allowance ) or
Page | 4
ii. Interest credited @ 16% (X) X
• Receipt of accumulated amount under the recognized provident fund ( Fully
Exempt ) X ---

Gratuity or commutation of pension

34 Gratuity received by Govt. employees (Fully Exempt) X ---
Gratuity received by non-government employees from gratuity fund approved by the
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commissioner ( Fully Exempt ) X ---
Gratuity received by non-government employees from gratuity fund approved by the X
36 FBR
Less : Exempt up to Rs 300,000 (300,000) X
Gratuity received by non-government employees from unapproved gratuity fund X
Less Exempt up to lower of
37 1. Rs. 75,000 or
2. 50% of the amount received (X)
X
Important guideline :
Unapproved gratuity or unapproved commutation of pension shall not be exempt in the following cases:
a. Amount is not received in Pakistan
b. Amount received by the director of the company who is not regular employee of such company
c. Amount received by the non-resident person
d. Amount received by an employee who has already received an gratuity from the same or any other
employer.

Pension
38 Pension received by the citizen of Pakistan from the former employee (Fully Exempt) X ---
Important guideline:
Pension received shall be taxable if :
a. A person receive a pension works for same employer or his associate after retirement.
b. A person receives more than one pension then only one higher amount will be exempt and remaining
number of pensions will be taxable
The both conditions didn’t apply if the person is more than 60 years old.

Employee Share Scheme

39 When option ( right to acquire shares ) is obtained – Not a taxable event ---

40 When option ( right to acquire shares ) is sold / disposed off

Consideration received on the disposal of option X
Less : Incidental expenses incurred to acquire the option (X) X

41 When shares are acquired (without any restrictions )

FMV at the date of issue of the shares X
Less: Cost paid to acquire the shares (X)
Less : Cost paid to acquire the option (X) X
 When shares are acquired (with restriction on transfer) and employee retains the
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shares till the uplifting of the restriction
FMV at the date when employee have the free right to transfer X
Page | 5 Less: Cost paid to acquire the shares (X)
Less : Cost paid to acquire the option (X) X

When shares are acquired (with restriction on transfer) and employee disposes the
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shares before the uplifting of the restriction
FMV at the date when employee actually disposes of the shares X
Less: Cost paid to acquire the shares (X)
Less : Cost paid to acquire the option (X) X

44 When shares are disposed after getting the free right of disposal (C. Gain)
Consideration received on the disposal of shares X
Less: Cost paid to acquire the shares (X)
Less : Cost paid to acquire the option (X)
Less : Incidental expenses paid to disposes of the shares (X)
Less : Amount already taxed under the salary as a benefit received under the ESS (X)
Total Taxable Salary XXX