Written by Hamza Shahnawaz in Money & Banking, Taxation FBR clarifies deduction rules for profit on non-performing debts and explains how recovered amounts are treated for tax purposes. ISLAMABAD: The Federal Board of Revenue (FBR) has explained the tax treatment of profit accruing on non-performing debts of banking companies, development finance institutions, non-banking finance companies and modarabas for Tax Year 2027. According to the Income Tax Ordinance, 2001, updated up to June 30, 2026, Section 30 allows a banking company, development finance institution, non-banking finance company (NBFC) or modaraba to claim a deduction for profit accruing on a non-performing debt. The deduction is available where the profit is credited to a suspense account in accordance with the applicable Prudential Regulations issued by the State Bank of Pakistan (SBP) or the Securities and Exchange Commission of Pakistan (SECP). The provision covers non-performing debts of banking companies, development finance institutions, NBFCs and modarabas, subject…