Tax Rebate for Teachers Restored at 25% by Federal Cabinet

Following intervention of the Federal Tax Ombudsman, Federal Cabinet has restored the teacher’s rebate at 25 percent. Addressing a press conference on Thursday, Khalid Javed, Registrar to FTO and Amas Ali Jovindah, Advisor Legal & Media Wing said that teachers’ tax rebate @25 percent remained admissible over decades i.e. ever since the promulgation of Income Tax Ordinance 2001. Due to the presence of above referred provision on the statute, this forum received a huge number of complaints which runs into multiple of thousands. The main grievances of these complaints were extra ordinary delays and not allowing the resultant claim of refunds based on the tax rebate. Most of times, the Salary Disbursing Authorities/Withholding Authorities over deducted tax at source from the salary payments without having regard to the tax rebate @25 percent. Accordingly, Recommendations in thousands of cases were made with the directions to the Dept/FBR Field Offices to allow refunds based on teachers tax rebate @25 percent. However of late, in November, 2024, FBR made public that teachers rebate @25 percent had been omitted vide Finance Act, 2022 and as such it was not admissible in the tax year 2023 & 2024, and thereafter. In this background the FTO Secretariat took cognizance of the issue and it surfaced up in the light of accompanying facts of issue, that the teachers rebate was still applicable, available to the teachers’ community. Resultantly, the FTO Secretariat kept deciding the complaints filed by teachers’ community by considering the teachers rebate as admissible. The FTO Secretariat, also took up the matter with the FBR management through letters by highlighting all the chronological developments and legal position of the issue. Meanwhile, the number of complaints on this issue kept piling up. The FTO Secretariat continuously interacted with the FBR through letters as well as through its orders. However, now it is matter of much satisfaction that FBR took this mater seriously and the Federal Cabinet has restored the teacher’s rebate @25 percent. This Forum has played a very crucial and important role in the resolution of this issue and also in bringing clarity to the current admissibility of the same, as in the past years. On estimate basis we have dealt with approximately five thousands complaints on this issue. However, due to above development, the county wide teacher’s community which may be in lacs, will benefit, which is point of much solace to this organization which is a premier facilitating and grievances redressal forum for the taxpayers, they added,