Is the 25% tax rebate for full-time teachers and researchers still available, and did it cover tuition or medical teachers?

The reduction for full-time teachers and researchers sits in Part III of the Second Schedule to the Income Tax Ordinance, 2001, which lists reductions in tax liability. In the edition amended to 30 June 2026, clause (3A) is still printed, but its own wording limits it to tax years 2023, 2024 and 2025.

What does the law say?

The reduction. Clause (3A) provides that the tax payable by “a full-time teacher or a researcher, employed in a non-profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government research institution, shall be reduced by an amount equal to 25% of tax payable on his income from salary”.

The medical proviso. The first proviso says the clause “shall not apply to teacher of medical profession who derive income from private medical practice or who receive share of consideration received from patients”.

The time limit. The second proviso says the clause “shall be deemed to have been in force with effect from the first day of July, 2022 and shall cease to have effect after tax year 2025”. A footnote records that clause (3A) was inserted by the Finance Act, 2025.

What a tax year is. Section 74(1) makes the tax year a period of twelve months ending on 30 June, named after the calendar year in which that date falls. So the clause covered:

Tax year	Period
2023	1 July 2022 to 30 June 2023
2024	1 July 2023 to 30 June 2024
2025	1 July 2024 to 30 June 2025

Tax year 2026 (1 July 2025 to 30 June 2026) and tax year 2027 fall after the cut-off.

How does it work in practice?

Four conditions had to be met, all from the text of clause (3A):

1. Full-time. The person is a full-time teacher or researcher.
2. Employed. The person is employed by the institution, so the income is salary under section 12.
3. Qualifying institution. The institution is non-profit and recognised by the Higher Education Commission, a Board of Education or an HEC-recognised university, including a government research institution.
4. Not an excluded medical teacher. No private medical practice income and no share of patient fees.

The reduction is 25% of tax payable on salary income, not 25% of salary and not 25% of all tax.

Worked example (illustrative figures)

The amounts are invented. The tax figure is assumed, not computed from a rate table.

Mr. Kamran Yousaf is a full-time lecturer employed by a recognised non-profit university in Peshawar. For tax year 2025 assume his tax payable on salary income was Rs. 240,000.

1. Reduction under clause (3A): 25% of Rs. 240,000 = Rs. 60,000.
2. Tax after reduction: Rs. 240,000 minus Rs. 60,000 = Rs. 180,000.

For tax year 2027, assuming the same tax payable on salary of Rs. 240,000, no reduction applies under clause (3A), so the tax stays Rs. 240,000.

Now take Dr. Ayesha Malik, an assistant professor at a medical college in Karachi who also runs an evening clinic. The first proviso excluded her for every year the clause was in force, because she derives income from private medical practice.

What if …?

What if I also earned tuition income in tax year 2025? Tuition on your own account is Income from Business, not salary. The reduction was measured on “tax payable on his income from salary”. Clause (3A) does not say how tax is split between salary and other income when a person has both. The law is silent on the method, and this page does not supply one.

What if I taught at a private, for-profit academy? The clause requires a “non-profit education or research institution” with the recognition it lists. An institution run for profit does not match those words. Whether a particular institution qualified depends on its status, which the Ordinance does not list.

What if I was a part-time or visiting teacher? The clause names a “full-time teacher or a researcher”. It does not define full-time.

Common mistakes

• Claiming the reduction for tax year 2026 or 2027. The clause ceased after tax year 2025.
• Applying 25% to total tax. The reduction was 25% of tax payable on salary income only.
• Assuming all medical faculty were excluded. Only those with private practice income or a share of patient fees were.
• Reading old footnotes as current law. The footnotes of Part III reproduce earlier teacher reductions in similar words that were omitted or substituted in earlier years. They are history, not operative text.

What to check in the official text

Read clause (3A) of Part III of the Second Schedule in the official PDF of the Ordinance amended to 30 June 2026, including both provisos and the footnote showing it was inserted by the Finance Act, 2025. Read section 74 for how tax years are named. Any later Finance Act that restores or extends the reduction would appear in a newer consolidated edition than the one held in this corpus.