24.  Deductions not admissible.-

Nothing contained in section 23 shall be so construed as to authorise the allowance or deduction of-

(a)   any sum paid on account of any cess, rate or tax levied on the profits or gains of any business or profession or assessed as a percentage, or otherwise on the basis, of any such profits or gains;

(b)   any sum paid to a non-resident on account of interest, fees for technical services, brokerage or commission or any other sum chargeable under the provisions of this Ordinance, unless tax thereon has been paid or deducted and paid under section 50, as the case may be;

(c)   any sum paid to any person on account of salary, interest or profit, services rendered, brokerage or commission or rent of house property on which tax is deductible under section 50, unless such tax has been paid or deducted and paid under section 50, as the case may be;

(cc) any expenditure or allowance which results directly or indirectly in the provision of salaries of directors of a domestic company, not being a public company as defined in the First Schedule, which exceeds forty per cent of total income of the company before the charge of such expenditure or allowance:

Provided that the deduction in respect of the aggregate of such expenditure or allowance in respect of any director shall not exceed,-

(i)    where such expenditure or allowance relates to a period exceeding eleven months comprised in an income year, the amount three hundred and sixty thousand rupees; and

(ii)    where such expenditure or allowance relates to a period not exceeding eleven months comprised in an income year, an amount calculated at the rate of thirty thousand rupees for each month or part thereof comprised in that period:

Provided further that nothing contained in this clause shall apply in respect of any assessment year commencing on or after the first day of July, 1991.

(d)   any sum paid, on account of interest, brokerage, commission, salary or other remuneration, by a firm or an association of persons to any partner of the firm or any member of the association of persons, as the case may be;

(e)   any expenditure in the nature of head office expenditure, in the case of an assessee, being a non-resident, in excess of such limits as may be prescribed.

Explanation. -As used in this clause, "head office expenditure" means executive and general administration expenditure incurred by the assessee outside Pakistan for the purposes of the business or profession, including expenditure incurred in respect of-

(a)   any rent, local rates and taxes (excluding any, foreign tax corresponding to any tax leviable under this Ordinance), current repairs or insurance against risks of damage or destruction of any premises outside Pakistan used for the purposes of the business or profession;

(b)   any salary paid to an employee employed by the head office outside Pakistan for the purposes of the business or profession;

(c)   any travelling by such employee for the purposes of business or profession; and

(d)   such other matters connected with executive and general administration as may be prescribed;

(f)    any allowance in respect of expenditure on entertainment in excess of such limits and in contravention of such conditions as may be prescribed;

(ff)  any payments, made on or after the first day of July, 1998, on account of expenditure under a single account head which, in aggregate, exceed fifty thousand rupees made otherwise than through a crossed bank cheque or by a crossed bank draft except transactions not exceeding five hundred rupees or payments on account of postage or utility bills.

(fff) Notwithstanding anything contained in clause (ff), any payment made on or after the first day of July, 1998, on account of salary if–

(i)     it exceeds five thousand rupees, through a crossed cheque or transfer to the employee's bank account, or

(ii)    it does not exceed five thousand rupees, made through a bearer cheque.

(g)   any sum paid to any provident fund, superannuation fund or gratuity fund, not being a recognised provident fund, an approved superannuation fund or an approved gratuity fund;

(h)   any sum paid to any provident fund or other fund established for the benefit of employees of the assessee, unless the assessee has made effective arrangements to secure that tax shall be deducted at source from any payments made from the fund which are chargeable to tax under the head "Salary";

(i)    any expenditure incurred by an assessee on the provision of perquisites, allowances or other benefits to any employee, in excess of fifty percent of his salary excluding perquisites, allowances or other benefits:

Explanation.-As used in this clause-

(i)    "salary" means remuneration or compensation for services rendered paid, or to be paid, at regular intervals, and includes dearness or cost of living allowance and bonus or commission payable to an employee in accordance with the terms of his employment as remuneration or compensation for services but does not include the employer's contribution to a recognised provident fund or an approved superannuation or gratuity fund or any other sum which does not enter into the computation for pensionary or retirement benefits;

(ii)   "perquisite", "employee", and "employer" have the same meaning as in sub-section (2) of section 16; and

(iii)  "other benefits" does not include employer's contribution to a recognised provident fund or an approved superannuation or gratuity fund; or

(j)    any expenditure incurred on account of payment of a fine or penalty for the violation of any law or rule or regulation for the time being in force.