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Heads of income
(1) For the purposes of the imposition of tax and the computation of total income, all income shall be classified under the following heads, namely: —
(a) Salary;
(b) Income from Property;
(c) Income from Business;
(d) Capital Gains; and (e) Income from Other Sources.
(2) Subject to this Ordinance, the income of a person under a head of income for a tax year shall be the total of the amounts derived by the person in that year that are chargeable to tax under the head as reduced by the total deductions, if any, allowed under this Ordinance to the person for the year under that head.
(3) Subject to this Ordinance, where the total deductions allowed under this Ordinance to a person for a tax year under a head of income exceed the total of the amounts derived by the person in that year that are chargeable to tax under that head, the person shall be treated as sustaining a loss for that head for that year of an amount equal to the excess.
(4) A loss for a head of income for a tax year shall be dealt with in accordance with Part VIII of this Chapter.
(5) The income of a resident person under a head of income shall be computed by taking into account amounts that are Pakistan-source income and amounts that are foreign-source income.
(6) The income of a non-resident person under a head of income shall be computed by taking into account only amounts that are Pakistan-source income. PART II HEAD OF INCOME: SALARY
(a) Salary;
(b) Income from Property;
(c) Income from Business;
(d) Capital Gains; and (e) Income from Other Sources.
(2) Subject to this Ordinance, the income of a person under a head of income for a tax year shall be the total of the amounts derived by the person in that year that are chargeable to tax under the head as reduced by the total deductions, if any, allowed under this Ordinance to the person for the year under that head.
(3) Subject to this Ordinance, where the total deductions allowed under this Ordinance to a person for a tax year under a head of income exceed the total of the amounts derived by the person in that year that are chargeable to tax under that head, the person shall be treated as sustaining a loss for that head for that year of an amount equal to the excess.
(4) A loss for a head of income for a tax year shall be dealt with in accordance with Part VIII of this Chapter.
(5) The income of a resident person under a head of income shall be computed by taking into account amounts that are Pakistan-source income and amounts that are foreign-source income.
(6) The income of a non-resident person under a head of income shall be computed by taking into account only amounts that are Pakistan-source income. PART II HEAD OF INCOME: SALARY
Amendment history (8)
- Inserted by the Finance Act, 2012.
- Clause (b) substituted by the Finance Act, 2002. The substituted clause (b)
- Clause (c) substituted by the Finance Act, 2002. The substituted clause (c)
- Clause (d) substituted by the Finance Act, 2002. The substituted clause (d)
- Clause (e) substituted by the Finance Act, 2002. The substituted clause (e)
- Semi-colon substituted by the Finance Act, 2015.
- Omitted by the Finance Act, 2015. The omitted proviso
- Explanation added by the Finance Act, 2021.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 47
Unofficial reference, compiled from the FBR’s consolidated Income Tax Ordinance 2001 (amended up to 30 June 2026). Provided for general information only — not an official FBR publication and not legal or tax advice. Always verify against the official FBR text before relying on it for filing or any decision.