Income from poultry farming (including broilers, layers, and breeders) is treated as agricultural income and has a distinct tax status.
1. Federal Income Tax (FBR)
Taxability: Income derived from poultry farming is considered "Agricultural Income" under Section 41 of the Income Tax Ordinance, 2001.
Exemption: This income is exempt from federal income tax. You will declare this income in your federal tax return, but no federal tax will be charged on it.
2. Provincial Income Tax (Punjab)
Taxability: While exempt at the federal level, agricultural income is taxable by the provincial government. In Punjab, this is governed by the Punjab Agricultural Income Tax Act.
Tax Rates: The tax is levied based on slabs determined by the Punjab government.
Income up to PKR 400,000 is exempt (0% tax).
Income above this threshold is taxed at progressive rates.
Return Filing: You may be required to file a separate agricultural income tax return with the relevant Punjab tax authorities.
3. Sales Tax
The sale of live chickens or unprocessed poultry products from the farm is generally considered part of agricultural produce and is exempt from sales tax. However, if the poultry is processed or packaged, sales tax may become applicable.
Taxes on Running a Poultry Farm | Fintac Consultants