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Tax Credit Limit Reduced by 50pc On Charitable Donations
Tax Credit Limit Reduced by 50pc On Charitable Donations
charitable donations
ISLAMABAD: The limit of tax credit has been reduced by 50 percent on amount
paid in cash or in kind to charitable donations, sources in Federal Board of
Revenue (FBR) said.
The sources said that under the existing provisions of the last a person is entitled to tax
credit on account of charitable donation paid in cash or in kind.
Currently such credit is allowed to the extent of lesser of: total amount donated in the
year, including fair market value of any property given; or where the person:
(i) an individual or association of person, 30 percent of the taxable income of the person
the year; or
(ii) a company, 20 percent of the taxable income of the person the year.
Deloitte Yousuf Adil, Chartered Accountants, said that the Finance Bill 2020 proposed
to reduce the limit of credit by 50 percent in case of donations made to an associate as
under:
(a) Total amount donated in the year, including fair market value of any property given;
or
(i) an individual or association of person, 15 percent of the taxable income of the person
for the year; or
(ii) a company, 10 percent of the taxable income of the person for the year.