Claims of tax exemption for judges is misleading

WhatsApp groups are being forwarded details of what is claimed to be a major tax exemption being given by the government to judges “for their service”.

The impression being given is that the government has done this to ‘reward’ the judiciary.  Fact Check Pakistan found to be misleading.

However, the fact is that the story is from 2021 and did not happen now – contrary to the impression being given through the text that is being forwarded.

The news report stated that Pakistan has introduced income tax exemptions on various allowances granted to judges of higher courts during the tax year 2024.

The Federal Board of Revenue (FBR), the country’s apex tax collection agency, has revised the Income Tax Ordinance, 2001 to facilitate this exemption.

Under the updated ordinance, judges serving in the Supreme Court of Pakistan and High Courts are now eligible for tax exemption on perquisites, benefits, and allowances received during the tax year 2024.

It said the move is aimed at recognizing the vital role played by the judiciary in upholding justice and maintaining the rule of law in the country.

In April 2021, it was reported that the FBR has exempted judicial allowances from income tax by honouring court judgements.

The tax authority had notified that the judicial allowance and special judicial allowance are exempt from tax not only in cases of superior judiciary but also in the case of subordinate judiciary.

The exemption has been given in compliance with July 2020 judgement of the Sindh High Court (SHC) and 2017 judgement of the Peshawar High Court (PHC).