As per Lawkidunya, Section 155 of the Income Tax Rules, 2002 in Pakistan deals with the allowance of a deduction for education expenses incurred by a taxpayer on their children. Here are the key provisions:
Key Provisions
1. Deduction allowed: A taxpayer is allowed a deduction from their taxable income for education expenses incurred on their children.
2. Eligible expenses: The deduction is allowed for expenses incurred on tuition fees, admission fees, examination fees, laboratory fees, library fees, and other fees related to education.
3. Limit on deduction: The deduction is limited to Rs. 60,000 per child per annum.
4. Maximum number of children: The deduction is allowed for a maximum of three children.
5. Qualifying educational institutions: The deduction is allowed for expenses incurred on education at institutions recognized by the Higher Education Commission (HEC) or the Federal Board of Intermediate and Secondary Education (FBISE).
Conditions for Claiming Deduction
1. Taxpayer must be a resident: The taxpayer must be a resident of Pakistan to claim the deduction.
2. Expenses must be incurred: The taxpayer must have actually incurred the education expenses to claim the deduction.
3. Expenses must be supported by documentation: The taxpayer must have documentation to support the education expenses, such as receipts and invoices.
Procedure for Claiming Deduction
1. Claim deduction in tax return: The taxpayer must claim the deduction in their income tax return (Form A) for the relevant tax year.
2. Attach supporting documentation: The taxpayer must attach supporting documentation, such as receipts and invoices, to their tax return.
Penalties for Non-Compliance
1. Late filing fee: A penalty of Rs. 20,000 to Rs. 50,000 for late filing of tax return.
2. Default surcharge: A penalty of up to 25% of the tax due for non-payment or underpayment of tax.
3. Prosecution: Taxpayers may be prosecuted for tax evasion or non-compliance with tax laws.
It is essential to consult with a tax professional or the Federal Board of Revenue (FBR) to ensure compliance with the tax laws and regulations in Pakistan.