DEDUCTIBLE ALLOWANCES

Question 1

Explain briefly about zakat.

Answer 1

(1) A person shall be entitled to a deductible allowance for Zakat paid by the person in a tax year under the
Zakat and Ushr Ordinance, 1980.
(3) An allowance for a tax year that is not fully deducted shall not be:
 refunded;
 carried forward to a subsequent tax year; or
 carried back to a preceding tax year.
Zakat paid to relatives will not be deducted because it is not considered as Zakat as per Zakat and Ushr
Ordinance, 1980.
If question is silent about Zakat, assume that Zakat is being paid under Zakat and Ushr Ordinance, 1980

Question 2

What is the Workers‟ Welfare Fund?

Answer 2

A person shall be entitled to a deductible allowance for the amount of any Workers‘ Welfare Fund paid by the
person under Workers‘ Welfare Fund Ordinance or under any law relating to Workers‘ Welfare Fund enacted by
provinces (after the 18th constitutional amendment Act, 2010):
No deductible allowance will be allowed for amount of WWF paid to Provinces by a trans-provincial establishment.

Question 3

What is the Workers‟ Participation Fund?

Answer 3

A person shall be entitled to a deductible allowance for the amount of any Workers‘ Participation Fund paid by the
person under Companies Profit (Workers‘ Participation) Act‖ or under any law relating to the Workers‘ Profit
Participation Fund enacted by Provinces (after the 18th Constitutional amendment Act, 2010)
No deductible allowance will be allowed for amount of WPPF paid to Provinces by a trans-provincial establishment.