prac prob

[AETISAM]

personel medical expense drawn by professional AOP r added back in net profit 2 calculate total taxxable income of AOP....this medical expense is then later on added to the income of member who drew tht medical expense...which meanz tht he'll later have to pay tax on such medical allowance drawn....my ques is tht wats da provision in income tax for such medical allowance drawn by a person,will such allowance b taxable or exempt(since 10% medical allowance is exempt for an employee)

[Abdur.Rehman]

please read clause (j) of Section 21 of income tax ordinance 2001 i.e. deductions not allowed. and why it is not given as a deduction in salary of partners of AOP. the reason is that the partners are not employees of the company, as per tax, eventhough they draw salary.