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Deductions in computing income chargeable under the head “Income from Other Sources”
(1) Subject to this Ordinance, in computing the income of a person chargeable to tax under the head Income from Other Sources for a tax year, a deduction shall be allowed for any expenditure paid by the person in the year to the extent to which the expenditure is paid in deriving income chargeable to tax under that head, other than expenditure of a capital nature.
(2) A person receiving any profit on debt chargeable to tax under the head Income from Other Sources shall be allowed a deduction for any Zakat paid by the person under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), at the time the profit is paid to the person.
(3) A person receiving income referred to in clause (f) of sub-section (1) of section 39 chargeable to tax under the head Income from Other Sources shall be allowed —
(a) a deduction for the depreciation of any plant, machinery or building used to derive that income in accordance with section 22; and (b) an initial allowance for any plant or machinery used to derive that income in accordance with section 23.
(4) No deduction shall be allowed to a person under this section to the extent that the expenditure is deductible in computing the income of the person under another head of income.
(5) The provisions of section 21 shall apply in determining the deductions allowed to a person under this section in the same manner as they apply in determining the deductions allowed in computing the income of the person chargeable to tax under the head "Income from Business".
(6) Expenditure is of a capital nature if it has a normal useful life of more than one year. PART VII EXEMPTIONS AND TAX CONCESSIONS
(2) A person receiving any profit on debt chargeable to tax under the head Income from Other Sources shall be allowed a deduction for any Zakat paid by the person under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), at the time the profit is paid to the person.
(3) A person receiving income referred to in clause (f) of sub-section (1) of section 39 chargeable to tax under the head Income from Other Sources shall be allowed —
(a) a deduction for the depreciation of any plant, machinery or building used to derive that income in accordance with section 22; and (b) an initial allowance for any plant or machinery used to derive that income in accordance with section 23.
(4) No deduction shall be allowed to a person under this section to the extent that the expenditure is deductible in computing the income of the person under another head of income.
(5) The provisions of section 21 shall apply in determining the deductions allowed to a person under this section in the same manner as they apply in determining the deductions allowed in computing the income of the person chargeable to tax under the head "Income from Business".
(6) Expenditure is of a capital nature if it has a normal useful life of more than one year. PART VII EXEMPTIONS AND TAX CONCESSIONS
Amendment history (8)
- The expression inserted by the Finance Act, 2025.
- The word “Card” omitted by the Finance Act, 2006.
- Inserted by the Finance Act, 2003.
- The expression “5, 6 or 7” substituted by the Finance Act, 2021.
- Sub-section (6) omitted by the Finance Act, 2002. The omitted sub-section (6)
- The words “on the profit” omitted by the Finance Act, 2003.
- The brackets, letter and word “(e) or” omitted by the Finance Act, 2003.
- Added by the Finance Act, 2002.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 98
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.