The CBR has amended the Income Tax Ordinance 2001 to describe various provisions of Voluntary Pension Fund Rules. The Board's explanatory circular has specified that the profit or gain or benefit derived by the pension fund or the pension fund manager from the Pension Fund is exempt from tax which was granted through Finance Act, 2005.
The Securities and Exchange Commission of Pakistan (SECP) has revised the Voluntary Pension Funds Rules 2005. Therefore, certain amendments have been made in the Income Tax Ordinance, as per the revised rules.
Consequently, the following expressions have been defined in section 2 of the Ordinance: 'Approved Employment Pension or Annuity Scheme' has been described under clause 3D and 'Approved Occupational Savings Scheme' as per clause 3E of the Ordinance.
EXEMPTION FROM INCOME TAX - REAL ESTATE INVESTMENT TRUST (REIT): The Board has clarified that the REIT is a security that sells like a stock and invests in real estate directly or indirectly. The REIT has been provided exemptions from the applicability of different provisions of the Income Tax Ordinance, 2001, subject to condition that not less than 90 percent of its accounting income of that year, (as reduced by capital gains whether realised or unrealised) is distributing among the unit or certificate holders or shareholders as the case may be.
Consequent to above amendments, the following expressions have been defined in section 2 of the Ordinance and exemptions have been provided: Real Estate Investment Trust (REIT), clause 47A; Real Estate Investment Trust Management Company, clause 47B; exemption to income, (99) Part I of Second Schedule; exemption to instrument of redeemable capital, (57) Part I of Second Schedule and exemption from applicability of provision of sections ie 113 (minimum tax); 151 (Profit on debt), 233 Brokerage and Commission and section 150 dealing with dividends.
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