Islamabad, Apr 23, 2025: In a significant policy reversal aimed at honoring its commitment to the academic community, the federal government has officially reinstated the 25% income tax concession for full-time educators and research professionals.
This follows the passage of the Income Tax (Second Amendment) Bill, 2025, which reaffirms the cabinet’s decision to support teachers and researchers with a financial incentive.
A confidential report from the federal cabinet, dated March 26, 2025, confirmed the reintroduction of the rebate.
The Revenue Division presented a formal proposal, leading to the approval, following an earlier summary dated March 16.
The cabinet endorsed the measure, legally restoring the tax relief that had previously been revoked without broader consensus.
However, despite this restoration, the Federal Tax Ombudsman (FTO) recently revealed that local tax offices had issued contradictory instructions to withhold this benefit.
A communication from the FTO’s office, dated April 21, 2025, highlighted that certain FBR field departments had dispatched directives denying the rebate, which triggered complaints from affected employees across the country.
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These actions directly violated a prior agreement made on March 10 between government authorities and the All-Government Grand Alliance of Employees, which had pledged to maintain the rebate.
Responding to the mounting discontent and based on an earlier advisory dated April 11, the FTO has now instructed the Federal Board of Revenue (FBR) to nullify all such letters sent to salary processing departments and withholding agents.
The government issued this directive to eliminate any confusion and ensure that eligible recipients promptly receive the tax benefit.
The government introduced this intervention to bring much-needed clarity and restore confidence among government employees in the education and research sectors.
The decision not only reflects the government’s commitment to honoring its agreements but also promotes fairness and transparency in tax administration.
By aligning the FBR’s actions with the cabinet’s approved amendment, the FTO’s order ensures smooth implementation of the rebate policy, helping resolve grievances while encouraging future compliance across all tax zones.
