Section 61: Charitable donations

61. Charitable donations.—1[(1) A person shall be entitled to a tax credit in respect of any sum paid, or any property given by the person in the tax year as a donation 2[, voluntary contribution or subscription] to — (a) any board of education or any university in Pakistan established by, or under, a Federal or a Provincial law; (b) any educational institution, hospital or relief fund established or run in Pakistan by Federal Government or a Provincial Government or a3[Local Government]; or (c) any non-profit organization 4[or any person eligible for tax credit under section 100C of this Ordinance; or (d) entities, organizations and funds mentioned in the Thirteenth Schedule to this Ordinance.] (2) The amount of a person’s tax credit allowed under sub-section (1) for a tax year shall be computed according to the following formula, namely:— (A/B) x C where — A is the amount of tax assessed to the person for the tax year before allowance of any tax credit under this Part; B is the person’s taxable income for the tax year; and C is the lesser of — (a) the total amount of the person’s donations referred to in sub- section (1) in the year, including the fair market value of any property given; or (b) where the person is — (i) an individual or association of persons, thirty per cent of the taxable income of the person for the year; or (ii) a company, 1[twenty] per cent of the taxable income of the person for the year 2[: Provided that where any sum is paid or any property is given to an associate by a donor, clause (b) of component C shall be, in the case of – (i) an individual or association of persons, fifteen percent of the taxable income of the person for the year; or (ii) a company, ten percent of the taxable income of the person for the year.] (3) For the purposes of clause (a) of component C of the formula in sub- section (2), the fair market value of any property given shall be determined at the time it is given. (4) A cash amount paid by a person as a donation shall be taken into account under clause (a) of component C3[of]sub-section (2) only if it was paid by a crossed cheque drawn on a bank. 1[(5) The 2[Board] may make rules regulating the procedure of the grant of approval under sub-clause (c) of clause (36) of section 2 and any other matter connected with, or incidental to, the operation of this section.] 3[ ] 4[ ] 1[ ] 2[ ]

Effective date: 2001-09-13

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