Deductible Allowances

1- Zakat (Section 60)

2- Workers’ Welfare fund (Section 60A)
3- Workers’ participation fund (Section 60B)
4- Deductible allowance for Profit on debt (Section 60C)
5- Deductible allowance for education expenses
(Section 60D)

1- Zakat:
A person shall be entitled to a deductible allowance for
the amount of zakat paid by the person in a tax year
under the Zakat and Ushr Ordinance, 1980
Any allowance or part of allowance under this section
for a tax year that is not be able to deducted for the
year shall not be refunded, carried forward to a
subsequent year.

2- Workers’ Welfare fund:

A person shall be entitled to a deductible allowance for
the amount of any Workers’ Welfare Fund paid by the
person in tax year under Workers’ Welfare Fund
Ordinance, 1971
3- Workers’ Participation Fund:
A person shall be entitled to a deductible allowance for
the amount of any Workers’ Participation Fund paid by
the person in a tax year in accordance with the
provisions of the Companies Profit (Workers’
Participation) Act, 1968

4- Deductible allowance for profit on debt:

Every individual shall be entitled to a deductible
allowance for the amount of any profit or share in rent
and share in appreciation for value of house paid by
individual in a tax year on a loan where the individual
utilizes the loan for construction of a new house or the
acquisition of a house

Interest (profit, markup, rent share) paid on debt for

house loan is deductible allowance. Interest amount
eligible for deduction is lower of the amount paid or
50% of taxable income or two million rupees.

5- Education expenses (Tuition fees only):

 Individuals with taxable income less than 1.5
million Rupees are eligible for the allowance.
  Education expense eligible for the allowance is
lower of 5% of the tuition fee paid or

 25% of the taxable income or

 60,000 multiplied by number of children.

 The allowance can be claimed by either of the

parent. NTN or name of the institution must be
provided.

 Any allowance or part of an allowance under this

section for a tax year that is not able to be
deducted for the year shall not be carried forward
to a subsequent tax year.

Tax reduction for full time teacher

A reduction of 25% of tax on income from salary is
available to a full time teacher or researcher,
employed in a
 Non-profit education or research institution duly
recognized by HEC;
 A board of education or a university recognized by
HEC, including government training and research
institution.