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Incomes or classes of income, or persons or classes of persons, enumerated below, shall be liable to tax at such rates which are less than the raises specified in the First Schedule, as are specified hereunder:

(1) Rate of tax for companies engaged in exploration and extraction of mineral deposits:
In respect of such profits and gains of such company as are referred to in clause (123) of Part I, the rates of income tax and super tax, as specified in the First Schedule and as applicable to the said profits and grains of the said company accruing or arising after the expiry of the period of five years referred to in the said clause, shall be reduced by fifty per cent for a period of five years immediately next following the exemption period.

(2) Rate of tax in respect of undertakings in the Export Processing Zone.
In the case of an industrial undertaking set up in an area declared by the Federal Government to be a "Zone" within the meaning of the Export Processing Zones Authority Ordinance, 1980 (IV of 1980), the income, profits and gains of such undertaking accruing or arising after the expiry of the period of exemption under clause (126) of Part I shall be charged to tax for a period of five years thereafter at the rate equal to twenty-five per cent of the rates specified in the First Schedule [:]

Provided that nothing contained in this clause shall apply in respect of undertakings whose period of exemption under clause (126) of Part I will expire after the 30th June, 1997.

(2A) Rate of tax in respect of commission of export indenting agents etc.
The tax chargeable in respect of commission received by an export indenting agent or an export indenting agent or an export buying house
shall be an amount equal to the tax payable by the exporter on export of goods to which such commission relates.

(2AB) Rate of tax in respect of income of engineering contracting services rendered outside Pakistan.
The tax in respect of income from engineering contracting services rendered outside Pakistan shall be charged at the rate of one per cent of the gross receipts, provided that such receipts are brought into Pakistan in foreign exchange through normal banking channel.; and

(3) Income from letting out pipeline for petroleum:
Any income of persons whose profits or gains from business are computed under the Fifth Schedule to this Ordinance as is derived from letting out to other similar persons any pipeline for the purpose of carriage of petroleum shall be charged to tax at the same rate as is applicable to such persons in accordance with the provisions of the said Schedule.

(4) In the case of a resident being an individual, unregistered firm, association of persons, Hindu undivided family or artificial juridical person referred to in clause (32) of section 2, the profit on Federal Investment Bonds issued under the Federal Investment Bonds Rules, 1991, shall be liable to deduction of income tax under sub-section (2) of section 50 at the rate of ten per cent of the amount of the said profit.

(4A) in the case of a resident person the profit on Special US Dollar Bonds purchased out of any incremental deposits made in the existing foreign currency accounts on or after the 16th day of December, 1999, or out of new accounts opened on or after the said date, shall be liable to deduction of income tax under sub-section (2) of section 50 at the rate of ten per cent of the amount of the said profit;

(5) In the case of any person referred to in clause (32) of section 2, being a resident, profit on-the reinvestment or the redeposit of Khaas Deposit Certificates or Khaas Deposit Accounts made under the National Savings Scheme on or after the tenth day of November, 1991, shall be liable to deduction of income tax under sub-section (2) of section 50 at the rate of ten per cent of the amount of the said profit.

(5A) In cases of any person, being a resident, the tax from profit or interest on any National savings Scheme, shall be deducted at the rate of ten per cent of such profit or interest.

(5AA)  In case of any individual, being a resident, the tax from profit orinterest of any National Savings Schemes of Directorate of National Savings or Post OfficeSavings Account in which investment is made on, or after, the first day of July, 2001,shall be deducted at the rate of ten per cent of such profit or interest:

Provided that no tax shall be deducted from income or profits paid on-

(a) Defence Savings Certificates, Special Savings Certificates, Savings Accounts or PostOffice Savings Account, made on, or after, the first day of July, 2001, where such depositdoes not exceed three hundred thousand rupees; and

(b) investment in Monthly Income Saving Accounts Scheme of Directorate of National Savingson, or after, the first day of July, 2001, where monthly installment in an account doesnot exceed one thousand rupees.

(6) Rate of tax in respect of Lahore-Islamabad Motorway Project:
In the case of Daewoo Corporation, Seoul, Korea (hereinafter referred to as the Contractor), payments received in full or in part (including a payment by way of an advance) in pursuance of the contract agreements made with the National Highway Authority on the thirtieth day of December, 1991, for design and construction of Lahore-Islamabad Motorway shall be deemed to be the income of the Contractor and charged to tax at the rate of three per cent of such payments which shall constitute final discharge of his tax liability under this Ordinance and the Contractor shall not be required to file the return of total income under section 55.

(6A) Tax shall be collected at 3/4th of the rate applicable under sub-section (5) of section 50 on the goods imported under the Afghan Transit Trade Agreement, 1965, and subject to Notification S.R.O. 368(I)/95, dated the 2nd May, 1995.

Provided that the exemption under this clause shall not be available in respect of any incremental deposits made on or after the 16th day of December, 1999 in such accounts held by a resident person or in respect of accounts deposited in accounts opened on or after the said date by such person;

(6AA) In respect of any edible oils imported as [--], the tax under sub-section (5) of section 50 shall be collected at the rate of three per cent of the value of such edible oils as increased by customs-duty and sales tax, if any, levied thereon,

(6AB) Rate of tax in respect of certain exporters.
Tax shall be deducted under sub-section (5A) of section 50 at the rate of 0.5% from foreign exchange proceeds on account of export of-
(i) rice marketed under a brand name in five kilograms pack;
(ii) canned and bottled fish including sea-food and other food items; and
(iii) precious and semi-precious stones whether uncut, cut, or polished.

(6B)

Provided that the said persons shall deduct tax at the rate of five per cent on account of services provided in respect of goods sold in Pakistan if such sales in Pakistan are in excess of five per cent of export sales.

[ (7) ]

(7A)

(8)

(9) Rate in respect of certain Trusts falling under clause (62) of Part I:
In the case of Messrs Fauji Foundation and Army Welfare Trust, so much of the income chargeable under the head "Income from business or profession" as is not exempt under clause (62) of Part I, shall be charged to tax at the rate of 20% of such income.

(10) Rate of tax in respect of O&M contractors of private sector power projects:
In the case of a non-resident O&M Contractor payments, received in full or in part including a payment by way of an advance, for the operation and maintenance of a private sector power project and transmission line projects approved by the Federal Government shall be deemed to be the income of the said O&M Contractor and charged to tax at the rate of five per cent of such payments for a period of three years beginning with the date of commencement of company's operat-ions which shall constitute the final discharge of tax liability by the O&M Contractor under this Ordinance in respect of the said project.

(11) In the case of a non-resident, being a company, rate of deduction of tax under sub-section (3) of section 50 on dividends received from a company engaged exclusively in mining operations, other than petroleum, shall be 7.5 per cent of the gross amount of dividend.

(12) The rates of tax as specified in clause (b) and clause (c) of paragraph D of Part V of the First Schedule shall be reduced to 7.5% in case of dividends declared or distributed by purchaser of a power project privatised by WAPDA.

(13) In the case of consortium of M/s. STFA Construction Company of Turkey and M/s. JDN of Belgium (herein after referred to as the contractor) all payments received in pursuance of the contract agreement No. CEN-126/93, made with the Ormara Naval Harbour Project Board, on the Fourteen day of June, 1993, for the construction of a Naval Harbour at Omara (including off-shore and land development works), chargeable to tax in any assessment year shall be deemed to be the income of the contractor and charged to tax at the rate of three per cent which shall constitute final discharge of contractor's tax liability under this Ordinance.

(14) [omitted]

(15) [omitted]

Incomes, or classes of income, or persons or classes of persons, enumerated below, shall be allowed reduction in tax liability to the extent and subject to such conditions as are specified hereunder:-

Limit on the income tax payable:
(1) Where any person for any year-
(a) is liable to income tax and also to the Wealth-tax payable under the Wealth-tax Act, 1963 (XV of 1963); and
(b) his taxable income under this Ordinance exceeds one hundred thousand rupees; and
(c) the aggregate amount of income tax and wealth-tax payable by him exceeds seventy-five per cent of his total income, the income tax payable by him shall be reduced by the amount by which the said aggregate amount exceeds seventy-five percent of his total income.

(A1) Reduction in tax in such cases to which Universal Self Assessment Scheme applay.
The amount of tax payale under paragraph AA of Part I of the First Schedule to the Ordinance by a person qualifying for assessment under the Universal Self Assessment Scheme made unde sub-section (1) of section 59 of the Ordinance for the assessment year 1999-2000, shall be reduced by an amount of one thousand, two hundred and fifty rupees"; and

(1B) Reduction in tax in the cases of salaried tax payers.--(1) The income tax liability on income of salaried tax payers, where any income chargeable under the head "salary" exceeds 50% of total income as determined under paragraph A of Part-I of the First Schedule, shall be reduced at the following rates:--

Provide that the serial number 1 and teh entries relating there to shall not apply in respect of an assessment for the assessment year commencing on or after the 1st day July 2002.

(2) in addition to the reduction specified in sub-clause (1), the tax payable by a full time teacher or a researcher, employed in a non profit education or research institution includinggovernment training and research institution duly recognised by a Board of Education or a University or the University Grants Commission, shall be further reduced by an amount equal to 50% of the tax payable after the aforesaid reduction.

(3) The reduction in tax liability in sub-clauses (1) and (2) shall be applicable for the purposes of tax withholding under sub-section (1) of section 50 from the first day of July, 2000 and for the purposes of assessment from assessment year 2001-2002,"

(2) Reduction in tax in consequence of devaluation or revaluation of rupee:
The amount of tax payable, in a year in which the rupee is revalued or devalued, by an assessee whose profits or gains are computed in accordance with the rules contained in the Fifth Schedule to this Ordinance and who had entered with the Government into an agreement which provides for such reduction, shall be reduced to the amount that would be payable in the absence of the revaluation or devaluation of the rupee.

(3)

[ (4) ]

[ (5) ]

[ (6) ]

[ (7) ]

[ (8) ]

[(9) ]

(10)

(11) Where any company engaged in the business of distribution of cigarettes manufactured in Pakistan is required to pay minimum tax on the amount representing its turnover under section 80D, the amount of tax payable under the said section shall be reduced by eighty per cent.

[ (12) ]

[ (13) ]

[ (14) ]

[ (15) ]

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