FBR revises exemption certificate rules for Tax Year 2027, linking eligibility to a 90% income distribution requirement and formal approval status. ISLAMABAD: The Federal Board of Revenue (FBR) has revised the rules governing the issuance of income tax exemption certificates for Tax Year 2027, introducing new eligibility conditions for specified persons and approved not-for-profit organisations. The changes have been explained in Income Tax Circular No. 2 of 2026-27, issued to clarify major amendments to the Income Tax Ordinance, 2001 introduced through the Finance Act, 2026. According to the FBR, amendments have been made to Section 159 to streamline the issuance of exemption certificates for persons covered under clauses (99) and (99C) of Part I of the Second Schedule, as well as not-for-profit organisations approved under Section 2(36)(c) of the Ordinance. For this purpose, the FBR has introduced sub-sections (1C) and (1D) in Section 159. 90% income distribution requirement Under newly introduced sub-section (1C), a person will qualify for an exemption certificate for the subsequent tax year if they distributed 90% or more of their accounting income in accordance with clauses (99) and (99C) of Part I of the Second Schedule during the immediately preceding tax year. The requirement links eligibility for the exemption certificate to the taxpayer’s compliance with the prescribed income-distribution condition. Where a person has no preceding tax year because they have commenced business for the first time, the exemption certificate will instead be issued on the basis of an undertaking submitted to the Commissioner.…