The amount of tax credit allowed in any one tax year shall be calculated according to the following formula:

(A / B) x C

Where:
A is the amount of tax assessed to the person for the tax year, before
allowance of any tax credit under this part;
B is the person’s taxable income for the tax year;
C is the lesser of:

1. the total contribution or premium paid by the person in the year; or
2. twenty percent of the eligible person’s taxable income for the relevant tax year; Provided that an eligible person joining the scheme at the age of forty-one years or above, during the first ten years starting from July 1, 2006, shall be allowed additional contribution of 2% p.a. for each year of age exceeding forty years. Provided further that the total contributions allowed to such person shall not exceed 50% of the total taxable income of the preceding year; or
3. (iii) five hundred thousand rupees
   

• An employee may provide a tax certificate evidencing the Contributions made during each tax year ending on June 30 to his/her employer who may then under Section 149 (1) make adjustments of tax credit admissible under Section 63 from the tax to be deducted under the head ‘salary’. The employee may claim a tax rebate depending upon the quantum of the Contributions made during that tax year and the applicable slab of that individual.
• A self-employed individual may claim the tax credit at the time of filing of his/her Return of Total Income for each tax year ending on June 30. In the computation of his/her total taxable income and tax payable, the individual may claim a tax rebate depending upon the quantum of the Contributions made during that tax year and the applicable slab of that individual.

At the selected date of retirement, all the Units of the Sub-Funds to his credit shall be redeemed at the Net Asset Value notified at close of the day of retirement, if such day is a Dealing Day and otherwise on the next following Dealing Day.

The Participant shall be given Forms listing their choices under the Rules and shall then have the option to avail the following benefits without any tax liabilities, namely:

1. To withdraw up to twenty five per cent of the amount in his Individual Pension Account as cash;
2. To use the remaining amount to purchase an Approved Annuity Plan from a Life Insurance/Takaful Company of his choice, such payment shall be made directly by the Trustee of the Fund to the Life Insurance/ Takaful Company; or
3. To Enter into an agreement with the Pension Fund Manager of his choice to withdraw from the remaining amount (Income Draw Down Plan), monthly instalments till the age of seventy-five years or as specified in the Rules.

It is clarified that any income received under annuity scheme or income payment plan may be subject to income tax/ withholding tax.

A Participant can withdraw full amount in his Individual Pension Account as cash subject to the note below.

Note: Any amount withdrawn in excess of 25% of the accumulated balance shall be subject to withholding tax.

At retirement, the Participant shall be entitled to receive:

1. Up to 25% of the accumulated balance of his/her Individual Pension Account tax free (without any deduction of (either withholding or income tax); and
2. The tax shall not to be deducted in case the remaining 75% of the accumulated balance in the Participant’s Individual Pension Account is:

a) Invested in an Approved Income Payment Plan offered by a pension fund manager;

b) Paid to a life insurance company for the purchase of an Approved Annuity Plan; or

c) Transfer of the amount to other Pension Fund manger for purchase of Approved Income Payment plan.

Note: Any amount withdrawn in excess of 25% of the accumulated balanced as lump sum would be subject to tax as mentioned below.
Further note that the payments from the Approved Income Payment Plan or Approved Annuity Plan would be subject such to tax deductions as mentioned Income Tax Ordinance, 2001 from time to time.

In the event that amount is withdrawn from the Atlas Pension Fund before retirement, or the lump sum amount withdrawn at retirement is more than the allowed amount (i.e. 25% of the accumulated balance), then the Pension Fund Manager whilst making payment from Individual Pension Account shall deduct tax at the rate specified in Section 12 (6) of the Income Tax Ordinance, 2001 from any amount:

1. Withdrawn before the retirement age.
2. Withdrawn, if in excess of 25 per cent of his accumulated balance, at or after the retirement age.

Tax Rate applicable as provided in Section 12 (6) shall be computed in accordance with the following formula:

A / B %

Where:
A is the total tax paid or payable by the person on the person’s total taxable income for the three preceding tax years; and
B is the person’s total taxable income for the three preceding tax years.