Income Tax Ordinance, 2001 — Section 26: Scientific research expenditure

26. Scientific research expenditure.— (1) A person shall be allowed a deduction for scientific research expenditure incurred in Pakistan in a tax year wholly and exclusively for the purpose of deriving income from business chargeable to tax.

(2)In this section “scientific research” means any 1[activity] 2[undertaken in Pakistan] in the fields of natural or applied science for the development of human knowledge; “scientific research expenditure” means any expenditure incurred by a person on scientific research 3[undertaken in Pakistan] for the purposes of developing the person’s business, including any contribution to a scientific research institution to undertake scientific research for the purposes of the person’s business, other than expenditure incurred –

(a)in the acquisition of any depreciable asset or intangible;

(b)in the acquisition of immovable property; or

(c)for the purpose of ascertaining the existence, location, extent or quality of a natural deposit; and “scientific research institution” means any institution certified by the 4[Board] as conducting scientific research in Pakistan.