Question

Please provide any reference against the 10% medical allowance exemption from the income of salaries person

Answer 1

The reference detailing the exemption of medical allowance up to 10% of the basic salary for a salaried person is found in the Second Schedule of the Income Tax Ordinance.

Specifically, the relevant provision is located in:

• Part I (Exemptions from Total Income), Clause (139)(a) of the Second Schedule.

This clause grants exemption to:

• "Any medical allowance received by an employee not exceeding ten per cent of the basic salary of the employee".

This exemption is contingent upon the condition that "free medical treatment or hospitalization or reimbursement of medical or hospitalization charges is not provided for in the terms of employment".