Tax Book 2023

Income From Salary Chapter- 07

(d) 200 liters of petrol per month.

(e) If during service, a judge dies, exemption from tax in respect of benefits and

perquisites provided to widow as mentioned in sub-clause (2) shall also be

available.

1.1 6 Perquisites by virtue of employment - clause 53A

The following perquisites received by an employee by virtue of his employment, namely;-

(i) free or subsidized food provided by hotels & restaurants to its employees during duty

hours;

(ii) free or subsidized education provided by an educational institution to the children of its

employees;

(iii) free or subsidized medical treatment provided by a hospital or a clinic to its employees;

and

(iv) any other perquisite or benefit for which the employer does not have to bear any marginal

cost, as notified by the Board.

1.1 7 Medical treatment or reimbursement received and Medical allowance – clause 139

Full amount is exempt for benefit given as free medical treatment or hospitalization or both by

an employer to his employee or reimbursement received by the employee of the medical

charges or hospital charges or both, where such provision or reimbursement is in accordance

with the terms of employment:

Provided that NTN of the hospital or clinic is given and the employer also certifies and attests

the medical or hospital bills: or

Any medical allowance received by an employee, (if free medical treatment or hospitalization or

reimbursement of medical or hospitalization charges is not provided) then 10% of the basic

salary of the employee is exempt.

REDUCTION IN TAX RATES UNDER PART II OF SECOND SCHEDULE TO THE INCOME TAX
ORDINANCE, 2001

CLAUSE PARTICULARS OF EXEMPTION

(27) Transport Facility for Civil Servants

Transport Facility for Civil Servants – clause 27

The tax on payments under the Compulsory Monetization of Transport Facility for Civil Servants in
BS-20 to BS-22 (as reduced by deduction of driver‘s salary) shall be charged at the rate of 5% as a
separate block of income.

REDUCTION IN LIABILITY UNDER PART III OF SECOND SCHEDULE TO THE INCOME TAX
ORDINANCE, 2001

CLAUSE PARTICULARS OF EXEMPTION^

(1) Flying & submarine allowance – withdrawn by Finance Act, 2022

(1AA) Total allowances by pilots of airlines - withdrawn by Finance Act, 2022

(2) Salary income of a full time Teacher or researcher

Flying and submarine allowance – clause (1) - withdrawn by Finance Act, 2022

(1) Any amount received as-

(a) flying allowance by flight engineers, navigators of Pakistan Armed Forces, Pakistani Airlines

or Civil Aviation Authority, Junior Commissioned Officers or other ranks of Pakistan

Armed Forces; and

(b) submarine allowance by the officers of the Pakistan Navy,

shall be taxed @ 2.5% as a separate block of income