Income Tax Ordinance, 2001

CHAPTER-III

TAX ON TAXABLE INCOME PART X TAX CREDITS

From: 2023-07-01 - To: 0000-00-00 1[65E. Tax credit for industrial undertakings established before the first day of July, 2011.- 2[(1) Where a taxpayer being a company, setup in Pakistan before the first day of July, 2011, invests any amount, with 3[at least seventy per cent] new equity raised through issuance of new shares, in the purchase and installation of plant and machinery for an industrial undertaking, including corporate dairy farming, for the purposes of- (i) expansion of the plant and machinery already installed therein; or (ii) undertaking a new project, a tax credit shall be allowed against the tax payable in the manner provided in sub-section (2) and sub-section (3), as the case may be for a period of five years beginning from the date of setting up or commencement of commercial production from the new plant or expansion project, whichever is later.] 4[(2) Where a taxpayer maintains separate accounts of an expansion project or a new project, as the case may be, the taxpayer shall be allowed a tax credit equal to one 5[an amount as computed in sub-section (3A)] of the tax payable, including minimum tax and final taxes payable under any of the provisions of this Ordinance, attributable to such expansion project or new project. (3) In all other cases, the credit under 6[sub-section (3A)] shall be such proportion of the tax payable, including minimum tax and final taxes payable under any of the provisions of this Ordinance, as is the proportion between the new equity and the total equity including new equity. 7[(3A) The amount of a person’s tax credit allowed under sub-section (1) for a tax year shall be computed according to the following formula, namely:- A x (B/C) where- A is the amount of tax assessed to the person for the tax year before allowance of any tax credit for the tax year; B is the equity raised through issuance of new shares for cash consideration; and C is the total amount invested in the purchase and installation of plant and machinery for the industrial undertaking.] (4) The provisions of sub-section (1) shall apply if the plant and machinery is installed at any time between the first day of July, 2011 and the 30th day of June, 8[…