Income tax exemption to financial businesses

The Department of Revenue vide notification dated 24th of May, 2023 has provided income tax exemption to financial businesses. The notification provides that any consideration received by any of following entities for issue of shares that exceeds the face value of such shares or the aggregate consideration received for such shares as exceeds the fair market value of the shares, shall be excluded while calculating Income from other sources chargeable to income-tax:

1. Government and Government related investors such as central banks, sovereign wealth funds, international or multilateral organizations or agencies including entities controlled by the Government or where direct or indirect ownership of the Government is seventy-five percent or more;
2. Banks or Entities involved in Insurance Business where such entity is subject to applicable regulations in the country where it is established or incorporated or is a resident;