Federal Tax Ombudsman Orders Discontinuation of Teacher Tax Rebate–Punjab AG Office Notification

Teacher Tax Rebate Discontinued in Pakistan: Important Update from AG Punjab:

The Accountant General Punjab (AG Punjab) has issued a significant directive impacting thousands of educators and researchers across Punjab. In a letter dated 6^th May 2025, AG Punjab highlighted the discontinuation of the income tax rebate previously available to full-time teachers and researchers under the Income Tax Ordinance, 2001. As per the official communication, the Finance Act 2022 omitted sub-clause (2) of clause (1), Part III of the Second Schedule, effectively rendering the rebate inapplicable from the tax year 2023 onwards.

This directive follows the findings of the Federal Tax Ombudsman (FTO) and emphasizes that no recovery shall be initiated at this stage, as the government is considering corrective legislative action to restore the rebate in the current fiscal year. This development holds critical financial implications for teaching professionals throughout Punjab and Pakistan.

Stay informed with timely government notifications on teacher tax rebate updates, FTO decisions, and more—exclusively on Vocal Pakistan. Please find notification:

Office Of the
ACCOUNTANT GENERAL PUNJAB
46 Office Complex, Turner Road Lahore

No.MIS-Coord Office Order/Tax Rebate Edu Deptt/1031                                                                                                                                                                Dated: 06.05.2025

The Accounts Officer
HR-Lab

SUBJECT:             GUIDELINE REQUIRED IN THE FINDINGS/RECOMMENDATION ISSUED BY THE FEDERAL TAX OMBUDSMAN WITH REGARD TO TAX REBATE FOR EDUCATION DEPARTMENT

                        Please find enclosed herewith a copy of letter No. F.NO.4(71)11-Budget/2024-50753-r dated: 22-04-2025 on the subject cited above.

2.                     It is informed in the aforemented letter that tax rebate to full-time teacher or researcher was previously admissible under sub-clasue (2) of clause (1) of Part III of Second Schedule to the Income Tax Ordiance. 2001 and this sub-clause was omitted vide Finance Act, 2022. The aforesaid omission has rendered this rebate taxable for the tax year 2023 onwar.

3.                     In light of the above, it is hereby directed that the rebate mentioned above be immediately discontinued. However, no recovery shall be initiated at this time, as the government is considering corrective measures to reinstate the rebate within the current financial year. The recovery process will be communicated accordingly

(This issues with the approval of Additional Accountant General Punjab-MIS)

Deputy Accountant General
MIS

Will the Teacher Tax Rebate Return in 2025? All Eyes on Upcoming Budget:

The discontinuation of the tax rebate for teachers and researchers has sparked considerable discussion within academic and financial sectors. While the Accountant General Punjab has directed an immediate halt to the rebate, the decision not to initiate recovery at this point hints at possible relief in the near future. There’s growing hope that the Government of Pakistan may reintroduce this rebate in the upcoming Federal Budget 2025–26, especially under mounting pressure from educational unions and policy advocates.

Educators should stay alert and monitor official announcements from FBR, the Ministry of Finance, and the Federal Tax Ombudsman regarding the legal reinstatement of this benefit. At Vocal Pakistan, we are committed to providing real-time, reliable updates on all government notifications, tax reforms, and public sector financial changes that directly affect you.

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