ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

The State Bank of Pakistan

Updated on October 8, 2009

The State Bank of Pakistan:

Income of the State Bank of Pakistan and the State Bank of Pakistan Banking Services Corporation is fully exempt from tax.

Gratuity, Commutation of Pension:

Any amount of gratuity, commutation of pension received by an employee on his retirement or his heirs upon the death of an employee is exempt from tax subject to the following limits:

i)          If gratuity, commutation of pension is received from:

            a)         The Government

            b)         A local authority

            c)         A statutory body or corporation. It is fully exempt from tax.

ii)         Any amount received from gratuity fund approved by the Commissioner of             Income Tax is fully exempt from tax.

iii)         Any amount received from gratuity fund approved by the FBR is exempt upto Rs. 200,000.

iv)        In case of an employee to whom sub-clause (i), (ii), (iii) do not apply. It is    exempt upto 50% of amount receivable or Rs.75,000 whichever is less.

Note:   Exemption shall not be granted if:

i)          The payment is not received In Pakistan.

ii)         The payment is received by a director (who is not a regular employee) of a            company.

iii)         The recipient is a non-resident; and

iv)        The gratuity is received by an employee who has already received a           gratuity from any other employer.

Compensatory Allowance Abroad:

Any income representing compensatory allowance payable to a citizen of Pakistan locally recruited in Pakistan Mission Abroad is exempt upto 75% of the gross salary of the employee.


Mr. Imran is a citizen of Pakistan who got immigration in last year for Saudi Arabia. Pakistani Embassy in Saudi Arabia recruited Mr. Imran as a Passport Investigator.

Point to be noted:

Mr. Imran has been recruited locally (Recruitment has not been made in Pakistan) in Pakistan Embassy, so any compensatory allowance received by Mr. Imran shall be exempt upto 75% of gross salary.

Facility of Accommodation:

The facility of rent-free accommodation provided to the following persons is not taxable:

a)         President of Pakistan;

b)         Provincial Governors;

c)         Chiefs of Staff of Pakistan Army, Navy and Air Force;

d)         Corps Commanders;

e)         Federal Government Ministers;

f)          Judges of Supreme Court and High Courts;

Facility of Conveyance and Entertainment Allowance:

The facility of conveyance provided by the government and entertainment allowance given by the government to the following persons is exempt from tax:

a)         Provincial Governors;

b)         Chiefs of Staff of Pakistan Armed Forces;

c)         Corps Commanders;

d)         Ministers of the Federal Government.


Any conveyance facility provided by the Government of the Punjab to Mr. Salman Taseer, Governor of the Punjab is fully exempt from tax. It has no concern with the value of conveyance and nature of conveyance and quantum of expenditures incurred by the Government.

In other words, all the facilities in the form of conveyance and entertainment received by the above mentioned authorities are fully exempt from tax.

Special Allowance:

Any special allowance or benefit (not being entertainment or conveyance allowance) granted to meet expenses wholly and necessarily incurred in performance of the duties of an office or employment are fully exempt.

Examples of Special Allowance:

Traveling allowance (T/A), Daily allowance (D/A)


Mr. Sheraz is a Finance Manager in Pacific Pharmaceutical Ltd. He went Islamabad to attend the Meeting of a company. Company provided him Rs.15,000 as traveling allowance (T/A) and Rs.8, 000 as daily allowance (D/A). Actual expenses incurred by Mr. Sheraz in such tour were Rs.15, 000.

Traveling allowance represents special allowance and special allowance is fully exempt from tax, although actual expenses incurred by Mr. Sheraz are less than actual amount of traveling allowance received. So, all amount received by Mr. Sheraz is fully exempt from tax.

Note: Special allowance is fully exempt from tax; it has no concern with actual      amount of expenses

Perquisites without Marginal Cost Incurred by the Employer: (Clause 53A)

The following perquisites received by an employee by virtue of his employment are fully exempt from tax.

1)         Free or concessional passage:

            Free or concessional passage provided by transporters (including airlines)            to their employees or family members or dependents of the employees is fully      exempt from tax.



            Mr. Atta Ullah is working as a flight engineer in Aero Asia Airlines. His son   visited London and company provided him free return ticket in Aero Asia Airbus.    It is fully exempt from tax; although it is perquisite by the employer to Mr. Atta    Ullah.

2)         Free or subsidized food:

            Free or subsidized food provided by hotels and restaurants to its employees          during duty hours is fully exempt from tax.


            Mr. Khalid is working as a sales manager in Marriot hotel Islamabad. He always     takes free lunch from hotel during duty hours. It is fully exempt from tax although           it is perquisite by the employer.

3)         Free or subsidized education:

            Free or subsidized education provided by an educational institution to the   children of its employees is fully exempt from tax.


            Mr. Mubashar Malik is working as a registrar in Minhaj University Lahore.    University has provided a free admission and education facility during current         year to his daughter. This is fully exempt from tax.

4)         Free or subsidized medical treatment:

            Free or subsidized medical treatment provided by a hospital or a clinic to its          employees is fully exempt from tax.


            Mr. Ahsan is working as a Neuro Surgeon in SheikhZaidHospital, Lahore.             Unfortunately, he met with serious accident. He was provided a free      medical treatment in SheikhZaidHospital. It is fully exempt from tax. It has no             concern with the amount of actual medical expenditures.

5)         Any other perquisite or benefit without marginal cost:

Any other perquisite or benefit for which the employer does not have to bear any marginal cost, as notified by the FBR shall be fully exempt from tax.


    0 of 8192 characters used
    Post Comment

    • profile image


      8 years ago


    • profile image


      8 years ago

      senior deputy chief managar

    • i imi profile imageAUTHOR

      i imi 

      9 years ago


    • nilum profile image


      9 years ago

      Really very nice post and informative


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)