Exemption of Special Judicial Allowance from Deduction of Income Tax

A notification regarding Exemption of Special Judicial Allowance from Deduction of Income Tax has been issued on 29-03-2021 by the Federal Board of Revenue.

The detail of said notification in same is as under;

Exemption of Special Judicial Allowance from Deduction of Income Tax

I am directed to refer to your U.No.4(11)Rev.Bud/2020 dated 25/02/2021 and to state that in the light of the judgment of High Court of Sindh, Karachi vides Petition No. D-2019 of 2019 & dated 24.07.2020 and Judgment of Peshawar High Court in Writ Petition No. 4747-P of 2016, decided on 20th April 2017, Judicial Allowance and Special Judicial Allowance are exempt from tax not only in the cases of Superior Judiciary but also in the case of sub-ordinate Judiciary.

         The judgments of courts are in rem and applicable to all persons. Therefore, no tax is required to be collected/deducted on account of payments being made on account of Special Judicial Allowance or Judicial Allowance to the Higher and subordinate judiciary as per clause 39 of the Part-I of Second Schedule of the Income Tax Ordinance.  It is, therefore, requested that necessary instruction be issued to the AGPRs and field formations

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