02-18-2009, 11:06 PM
Dear,
You can deduct the medical allowance at 10% even if your employer has arranged life/health insurance facility for you. See clause (139) Part I of 2nd schedule to ITO 2001. Medical allownace is not available for exemption only if employer has paid/reimbursed the actual medical treatment expenses as mentioned in the said rule. There is no mentioning of insurance facility.
Leave encashment, to my understanding does not have any exemption and is therefore taxable at the rates applicable to salary.
Contribution by employer to a gratuity fund is not taxable for employee unless it is eventually paid to him. Gratuity is taxable only when it is finally received by the employee. However, there are certain exemption to it as well. For reference see clause (13) part I of 2nd schedule to ITO 2001.
If you don't have ITO 2001 download it from
http//www.fbr.gov.pk/newdt/ITordinance/ITOrdinance2008/ITOrdnance2008.pdf
I hope you will be benefited.
Regards,
KAMRAN.
