Pakistan’s tax law provides a deductible allowance for certain education expenses under Section 60D of the Income Tax Ordinance, 2001. The provision allows eligible individuals to claim an allowance for qualifying tuition fees paid during the tax year.
Who Can Claim the Education Expense Deduction?
An individual may claim the allowance where their taxable income is less than Rs. 1.5 million and they have paid tuition fees during the relevant tax year.
The allowance applies to qualifying tuition fees paid by the individual for their children.
How Much Can Be Claimed?
The deductible allowance is limited to the lowest of the following amounts:
- 5% of the total tuition fee paid during the tax year
- 25% of the individual’s taxable income
- Rs. 60,000 multiplied by the number of children
This means taxpayers cannot automatically deduct the full amount of tuition fees paid. The statutory limits under Section 60D determine the maximum allowable deduction.
Important Conditions
The allowance is subject to specific requirements under the Income Tax Ordinance. Any portion of the allowance that cannot be deducted during the relevant tax year cannot be carried forward to a subsequent tax year.
The provision also requires relevant information concerning the educational institution, including its NTN or name, when the allowance is claimed.
What Does This Mean for Parents?
Eligible parents should maintain proper records of tuition payments and educational-institution details when preparing their Tax Year 2027 income tax return.
Since the allowance is subject to income and monetary limits, taxpayers should calculate the allowable amount carefully rather than treating all education expenses as deductible.
Key Takeaway
Section 60D provides a tax deduction for qualifying education expenses for individuals meeting the prescribed income criteria. For Tax Year 2027, taxpayers should review their taxable income, tuition payments and number of children to determine the applicable allowance.
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Disclaimer
This article is provided for general informational purposes only and does not constitute legal, tax, financial or professional advice. Tax laws, rules and FBR policies may change from time to time. Readers should consult a qualified tax or legal professional regarding their specific circumstances before taking any action. Xact Legal does not accept liability for any action taken solely on the basis of this information.