Income Tax Ordinance, 2001

CHAPTER-V

PROVISIONS GOVERNING PERSONS PART I CENTRAL CONCEPTS Division III Associates

Income Tax Ordinance, 2001 CHAPTER-V PROVISIONS GOVERNING PERSONS PART I CENTRAL CONCEPTS Division III Associates From: 2024-12-29 - To: 0000-00-00 85. Associates.- 1[(1) Subject to sub-section (2), two persons shall be associates where - (i) the relationship between the two is such that one may reasonably be expected to act in accordance with the intentions of the other, or both persons may reasonably be expected to act in accordance with the intentions of a third person; (ii) one person sufficiently influences, either alone or together with an associate or associates, the other person; Explanation. - For the purpose of this section, two persons shall be treated as sufficiently influencing each other, where one or both persons, directly or indirectly, are economically and financially dependent on each other and, decisions are made in accordance with the directions, instructions or wishes of each other for common economic goal; or (iii) one person enters into a transaction, directly or indirectly, with the other who is a resident of jurisdiction with zero taxation regime.] (2) Two persons shall not be associates solely by reason of the fact that one person is an employee of the other or both persons are employees of a third person. (3) Without limiting the generality of sub-section (1) and subject to sub-section (4), the following shall be treated as associates - (a) an individual and a relative of the individual; (b) members of an association of persons; (c) a member of an association of persons and the association, where the member, either alone or together with an associate or associates under another application of this section, controls fifty per cent or more of the rights to income or capital of the association; (d) a trust and any person who benefits or may benefit under the trust; (e) a shareholder in a company and the company, where the shareholder, either alone or together with an associate or associates under another application of this section, controls either directly or through one or more interposed persons - (i) fifty per cent or more of the voting power in the company; (ii) fifty per cent or more of the rights to dividends; or (iii) fifty per…