Second Schedule of IT Ordinance 2001: five major income tax exemptions withdrawn

The Federal Board of Revenue (FBR) has withdrawn five major income tax exemptions of the Second Schedule of the Income Tax Ordinance 2001 to generate additional revenue in 2013-2014. According to the Finance Bill (2013-14) tabled here on Wednesday, five exemptions provided in the Second Schedule to the Income Tax Ordinance 2001 are also to be withdrawn for being discriminatory, prone to misuse and causing loss of revenue.
Exemption to dividend in specie; free/concessional passage provided by transporters including airlines to its employees by virtue of their employment; taxation at reduced rate of 2.5 percent on flying allowance and submarine allowance; 75 percent reduction in the tax payable by a full time teacher or a researcher being misused by high income earners and administrators and any income of any university or other educational institution established solely for educational purposes and not for purposes of profit. The exemption limit of withholding tax for investment in National Saving Centres has also been withdrawn, Finance Bill added.