Introduction and Geographical Source of Income Chapter- 05
Income declared to be Pakistan-source [Section 101(11)] 70,000 70,000
1,345,000 62 5,000
Special cases of taxability of foreign source income
Foreign source income of a short term resident [Section 50]
An individual shall be exempt in respect of his foreign-source income which is not brought / received in
Pakistan if he is resident only by reason of his employment and he is present in Pakistan for not exceeding
3 years.
This section shall not apply
(a) on business established in Pakistan by the person being an individual.
(b) Any foreign source income brought or received in Pakistan by the person being an individual.
Foreign source Income of a returning expatriate [Section 51]
If an individual citizen of Pakistan (returning expatriate) is resident in the current tax year but was non-
resident in the 4 preceding tax years, his foreign-source income shall be exempt current tax year and in the
following tax year.
Salary earned outside Pakistan shall be exempt if a citizen of Pakistan leaves Pakistan during a tax year
and remains abroad during that tax year.
Foreign source salary of resident individuals [Section 102]
Any foreign-source salary received by a resident individual shall be exempt from tax if the individual has
paid foreign income tax on such salary or his employer has withheld from the salary and paid to the
revenue authority of the foreign country in which the employment was exercised.
A credit or exemption shall be allowed only if the foreign income tax is paid within 2 years after the end of
the tax year in which the foreign income was derived by the resident taxpayer otherwise in the absence of
double tax treaty agreement the same shall be taxable in Pakistan. [Section 103]