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Income Tax Ordinance, 2001
CHAPTER-III TAX ON TAXABLE INCOME PART II HEAD OF INCOME: SALARY
From: 2023-07-01 - To: 0000-00-00 12. Salary.- (1) Any salary received by an employee in a tax year, other than salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head Salary. (2) Salary means any amount received by an employee from any employment, whether of a revenue or capital nature, including - (a) any pay, wages or other remuneration provided to an employee, including leave pay, payment in lieu of leave, overtime payment, bonus, commission, fees, gratuity or work condition supplements (such as for unpleasant or dangerous working conditions) 1[***] 2[***] 3[Provided that any bonus paid or payable to corporate employees receiving salary income of one million rupees or more (excluding bonus) in tax year 2010, shall be chargeable to tax at the rate provided in paragraph (2) of Division I of Part I of the First Schedule;] (b) any perquisite, whether convertible to money or not; (c) the amount of any allowance provided by an employer to an employee including a cost of living, subsistence, rent, utilities, education, entertainment or travel allowance, but shall not include any allowance solely expended in the performance of the employees duties of employment; 4[Explanation.- For removal of doubt, it is clarified that the allowance solely expended in the performance of employees duty does not include - (i) allowance which is paid in monthly salary on fixed basis or percentage of salary; or (ii) allowance which is not wholly, exclusively, necessarily or actually spent on behalf of the employer;] (d) the amount of any expenditure incurred by an employee that is paid or reimbursed by the employer, other than expenditure incurred on behalf of the employer in the performance of the employees duties of employment; (e) the amount of any profits in lieu of, or in addition to, salary or wages, including any amount received - (i) as consideration for a persons agreement to enter into an employment relationship; (ii) as consideration for an employees agreement to any conditions of employment or any changes to the employees conditions of employment; (iii) on termination of employment, whether paid voluntarily or under an…
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