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Tax credit for interest paid on low-cost housing loan
(1) An individual shall be entitled to a tax credit for a tax year in respect of any profit on debt or share in rent or share in appreciation for value of house paid by the person in the year on a loan by a scheduled bank or any other financial institution regulated by the Securities and Exchange Commission of Pakistan or advanced by Government or the Local Government or a statutory body or a public company listed on a registered stock exchange in Pakistan where the person utilizes the loan for the construction (including land) or acquisition of one personal house having land area up to two thousand five hundred square feet or flat having total area up to two thousand square feet.
(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 profit on debt referred to in sub-section (1) paid by the person in the year; or (b) thirty per cent of the person‘s taxable income for the year.
(3) The person shall not be entitled to tax credit under this section for any profit deductible under section 15A.
(4) Where an individual has claimed tax credit under this section, he shall not be entitled to claim tax credit for another house or flat under this section during the subsequent fifteen tax years.
(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 profit on debt referred to in sub-section (1) paid by the person in the year; or (b) thirty per cent of the person‘s taxable income for the year.
(3) The person shall not be entitled to tax credit under this section for any profit deductible under section 15A.
(4) Where an individual has claimed tax credit under this section, he shall not be entitled to claim tax credit for another house or flat under this section during the subsequent fifteen tax years.
Amendment history (8)
- Section 63A inserted by the Finance Act, 2025.
- Section 64 omitted by the Finance Act, 2015. Omitted section
- Inserted by the Finance Act, 2016.
- Section 64A is re-numbered as section 60C by Finance Act, 2017
- Section 64AB is re-numbered as section 60D by Finance Act, 2017
- Inserted by the Finance Act, 2015.
- The figure “2018” substituted by the Finance Act, 2016.
- The word “one” substituted by the Finance Act, 2016.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 125
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.