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MAximum amount of medical allowance exempt from tax, and what is the working of House rent allownce

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Maximum percentage of medical allowance exempt from tax, and what is the working of House rent allowance

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Medical allowance and house rent allowance are taxed differently under Pakistan’s income tax law. Medical allowance is exempt up to 10% of basic salary if the terms of employment do not provide free medical treatment or reimbursement, while actual medical reimbursement or free treatment is fully exempt provided bills are certified and the hospital/clinic’s NTN is recorded; however, if both allowance and reimbursement are given, the allowance becomes taxable.
In contrast, house rent allowance paid in cash is generally fully taxable as part of salary exempt if they opt not to use government-provided housing.

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