Income tax exemption during 2019-2020: Punjab Pension Fund causes Rs1,248 million loss to kitty

ISLAMABAD: The Punjab Pension Fund established under the Punjab Pension Fund Act, 2007 and the trust established there under, caused revenue loss of Rs1,248 million to the national kitty on account of income tax exemption during 2019-2020.

According to the Federal Board of Revenue (FBR) document on tax expenditure for 2019-2020, the FBR has issued list of departments, which availed exemptions from total income.

The FBR's data revealed that Sindh Province Pension Fund established under the Sindh Province Pension Fund Ordinance, 2002, has revenue impact of Rs1,162 million during this period.

The Punjab General Provident Investment Fund established under the Punjab General Provident Investment Fund Act, 2009 (V of 2009), and the trust established thereunder, caused revenue loss of Rs181 million.

The Khyber-Pakhtunkhwa Retirement Benefits and Death Compensation Fund has revenue impact of Rs115 million during 2019-2020.

The exemption available to the Khyber-Pakhtunkhwa General Provident Investment Fund has revenue impact of Rs1,693 million during this period.

The Khyber-Pakhtunkhwa Pension Fund has revenue impact of Rs1,105 million to the national exchequer.

The pension of a former president of Pakistan and his widow under the President Pension Act, 1974 has zero revenue impact on the national exchequer.

Tax credit available for contribution to an Approved Pension Fund (eligible persons as defined in sub-section (19A) of Section 2 of Income Tax Ordinance) has revenue impact of Rs1,162 million during 2019-2020.

The pension received by a citizen of Pakistan from a former employer, employees (pensioners) caused revenue loss of Rs2,781million during this period.

The income tax exemption available to the pensions (government) employees (retired government servants and military personnel) caused revenue loss of Rs13,680 million during 2019-2020.

The Commutation of Pension Employees (pensioners) caused revenue loss of Rs18,722 million and income tax exemption on gratuities employees (recipients of gratuity payments) has revenue impact of Rs1,112 million during 2019-2020.

The voluntary participants in pension funds caused revenue loss of Rs179 million.

It covers the accumulated balance up to 50 percent received from a pension fund at the time of eligible person's- (a) retirement; or (b) disability rendering him unable to work; or (c) death by his nominated survivors.

The withdrawal of accumulated balance from approved pension fund caused revenue loss of Rs240 million during this period.

Copyright Business Recorder, 2020