Lahore 28°C
Islamabad 24°C
Principles of taxation of associations of persons
(1) An association of persons shall be liable to tax separately from the members of the association and where the association of persons has paid tax the amount received by a member of the association in the capacity as member out of the income of the association shall be exempt from tax :
Provided that if at least one member of the association of persons is a company, the share of such company or companies shall be excluded for the purpose of computing the total income of the association of persons and the company or the companies shall be taxed separately, at the rate applicable to the companies, according to their share :
Provided further that the share of a member of an association of persons having turnover of three hundred million rupees or above during the tax year or any of the preceding tax years shall not be exempt if financial statements duly audited by a firm of Chartered Accountants as defined under the Chartered Accountants Ordinance, 1961 (X of 1961), or a firm of Cost and Management Accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966) have not been filed along with return of income by the association of persons to whom he is a member:
(4A) Where the income of a limited liability partnership is exempt from tax, any amount received by a member as share from profits earned by such limited liability partnership shall be included in the income of that member. PART IV COMPANIES
Provided that if at least one member of the association of persons is a company, the share of such company or companies shall be excluded for the purpose of computing the total income of the association of persons and the company or the companies shall be taxed separately, at the rate applicable to the companies, according to their share :
Provided further that the share of a member of an association of persons having turnover of three hundred million rupees or above during the tax year or any of the preceding tax years shall not be exempt if financial statements duly audited by a firm of Chartered Accountants as defined under the Chartered Accountants Ordinance, 1961 (X of 1961), or a firm of Cost and Management Accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966) have not been filed along with return of income by the association of persons to whom he is a member:
(4A) Where the income of a limited liability partnership is exempt from tax, any amount received by a member as share from profits earned by such limited liability partnership shall be included in the income of that member. PART IV COMPANIES
Amendment history (15)
- The words, brackets, figure and comma “Subject to sub-section (2)” omitted by the Finance Act, 2007.
- Inserted by the Finance Act, 2003.
- Full stop substituted by a colon by the Finance Act, 2014.
- Added by the Finance Act, 2014.
- Full stop substituted and new proviso inserted by the Finance Act, 2024.
- Explanation added by the Finance Act, 2022.
- Explanation omitted by the Finance Act, 2026. The omitted explanation
- Sub-section (2) omitted by the Finance Act, 2007. The omitted sub-section (2)
- Sub-section (3) omitted by the Finance Act, 2007. The omitted sub-section (3)
- Sub-section (4) omitted by the Finance Act, 2007. The omitted sub-section (4)
- Sub-section (4A) inserted by the Finance Act, 2026.
- Sub-section (5) omitted by the Finance Act, 2007. The omitted sub-section (5)
- Section 93 omitted by the Finance Act, 2007. The omitted section
- The word “resident” omitted by the Finance Act, 2015
- Sub-section (3) omitted by the Finance Act 2017. Omitted sub-section reads as follows
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 159
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.