ISLAMABAD: The government is planning to abolish 'first year allowance' available on the plant, machinery and equipment installed by any industrial undertaking set up in specified rural and under developed areas and withdraw accelerated depreciation allowed to alternate energy projects. Reliable sources told Business Recorder here on Friday that the Income Tax (Second Amendment) Bill 2021 has proposed deletion of section 23A of section 23B of the Income Tax Ordinance 2001. The government is expected to abolish these two key incentive provisions of the Income Tax Ordinance 2001 through the proposed Income Tax (Second Amendment) Bill 2021.
Under section 23A (First Year Allowance), plant, machinery and equipment installed by any industrial undertaking set up in specified rural and under developed areas or engaged in the manufacturing of cellular mobile phones and qualifying for exemption under clause (126N) of Part I of the Second Schedule] and owned and managed by a company shall be allowed first year allowance in lieu of initial allowance under section 23 at the rate specified in Part II of the Third Schedule against the cost of the “eligible depreciable assets” put to use after July 1, 2008.
Under section 23B (accelerated depreciation to alternate energy projects), any plant, machinery and equipments installed for generation of alternate energy by an industrial undertaking set up anywhere in Pakistan and owned and managed by a company shall be allowed first year allowance in lieu of initial allowance under section 23, at the rate specified in Part II of the Third Schedule against the cost of the eligible depreciation assets put to use after July 1, 2009.
Copyright Business Recorder, 2021
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