ISLAMABAD: The Federal Board of Revenue (FBR) has exempted income tax on profit on debt and capital gains from debt and debt instruments approved by the federal government, derived by any approved non-resident banking company.

The FBR has amended the Seventh Schedule (rules for computation of the profits and gains of a banking company and tax payable thereon) of the Income Tax Ordinance 2001 through a notification issued on Thursday.

Revenue shortfall may ‘force’ FBR to tax banking profits as well

According to the notification, in exercise of the powers conferred by rule 10 of the Seventh Schedule to the Income Tax Ordinance, 2001, the federal government has made further amendment in the Seventh Schedule.

Under the new sub-rule, profit on debt and capital gains from debt and debt instruments approved by the federal government shall be exempt from tax chargeable under the Income Tax Ordinance, derived by any non-resident banking company approved by the federal government for the purpose of this sub-rule, the FBR added.

Copyright Business Recorder, 2023