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Charitable donations
(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 , 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 a Local Government ; or (c) any non-profit organization 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, twenty per cent of the taxable income of the person for the year :
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 C of sub-section (2) only if it was paid by a crossed cheque drawn on a bank.
(5) The 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.
(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 a Local Government ; or (c) any non-profit organization 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, twenty per cent of the taxable income of the person for the year :
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 C of sub-section (2) only if it was paid by a crossed cheque drawn on a bank.
(5) The 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.
Amendment history (13)
- Sub-section (1) substituted by the Finance Act, 2003. The substituted sub-section (1) read as
- Inserted by the Finance Act, 2021. Earlier this insertion was made through Tax Laws (Second
- The words “local authority” substituted by the Finance Act, 2008.
- The word “fifteen” substituted by the Finance Act, 2009.
- Full stop substituted by colon and thereafter new proviso added through Finance Act, 2020 dated
- Inserted by the Finance Act, 2002.
- Added by the Finance Act, 2003.
- The words “Central Board of Revenue” substituted by the Finance Act, 2007.
- Section 62 substituted by the Finance Act, 2011. The substituted section 62
- Section 62 omitted by the Finance Act, 2022. Omitted section
- Inserted by the Finance Act, 2016.
- Section 62A omitted by the Finance Act, 2022. The omitted section
- Section 63 substituted by the Finance Act, 2005. The original section 63
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 120
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.