Tax credit for certain persons under Section 65F

Tax credit for certain persons under Section 65F

Tax credit for certain persons under Section 65F: A new section 65F was introduced in Tax Laws (Second Amendment) Ordinance 2021 dated 24.03.2021 and same has been made a part in Finance Bill 2021.

Under the said section, following persons or incomes shall be allowed a tax credit equal to one hundred per cent of the tax payable under any provisions of this Ordinance including minimum, alternate corporate tax and final taxes for the period, to the extent, upon fulfillment of conditions and subject to limitations detailed as under:

  • Persons engaged in coal mining projects in Sindh supplying coal exclusively to power generation projects;
  • Startup as defined in clause (62A) of section 2 for the tax year in which the startup is certified by the Pakistan Software Export Board and the next following two tax years; and
  • Income from exports of computer software or IT services or IT enabled services up to the period ending on the 30th day of June, 2025:

Provided that eighty percent of the export proceeds is brought into Pakistan in foreign exchange remitted from outside Pakistan through normal banking channels.

The tax credit shall be available subject to fulfillment of the following conditions, where applicable:

  1. a) Return has been filed
  2. b) withholding tax statements for the relevant tax year have been filed in respect of those provisions of the Ordinance, where the person is a withholding agent; and
  3. c) sales tax returns for the tax periods corresponding to relevant tax year have been filed if the person is required to file Sales Tax Return under any of the Federal or Provincial sales tax laws

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