Case scenario on Article 4 – Exempt Person

Question-

Determine from the following whether the income of following person are exempt/Taxable?

Name of Person	Status of Person
PSR	Government Entity
ABC	Government Controlled entity
ZDC Ltd	Engaged in Extractive Business
SDC Ltd	Engaged in Non-Extractive Business

Answer:

Taxability of the income of the following person are as follow:

Name of Person	Status of Person	Taxability on Income
PSR	Government Entity	Exempt
ABC	Government Controlled entity	Exempt
ZDC Ltd	Engaged in Extractive Business	Exempt
SDC Ltd	Engaged in Non-Extractive Business	Taxable

Question:- RTU (Juridical person and controlled by the government Entity) is engaged in the activity of investing fund for the benefit of exempt person (specified in Article-4). Determine whether the RTU is Exempt person?

Answer:    As per the Article-4, A Juridical person who is owned or Controlled by the exempt person specified in paragraph (a), (b), (f), and (g) of clause 1 of this article and conduct any of the following:

• Undertakes part or whole of the activity of the exempt person.
• Is engaged exclusively in holding assets or investing fund for the benefit of the exempt person.
• Only carries out the activity that are ancillary to those carried out by the Exempt person.

In given case RTU is a juridical person which is controlled by the Government entity and engaged in the activity of Investing Fund for the benefit of the Exempt person hence according the provision supra, RTU is Exempt Person.