(1)   Subject to the provisions of section 45, an assessee (not being a company) shall be entitled to an allowance in respect of any sum invested by him in the income year in the purchase of-

(a)    Defence Savings Certificates;

(b)    Unit (Trust) certificates (not being Bearer Certificates) issued by the National Investment (Unit) Trust of Pakistan and such Government Securities (including Development Loans) as may be specified by the Central Board of Revenue in this behalf;

(c)    Certificates (other than Certificates acquired by purchase or otherwise from a previous holder thereof) of Mutual Funds issued by the Investment Corporation of Pakistan;

(d)    such shares of such Pakistani investment companies (other than shares acquired by purchase or otherwise from a previous holder thereof) as may be specified by the Central Board of Revenue for the purposes of this clause;

(e)    such debentures or debentures stock (other than debentures or debenture stock acquired by purchase or otherwise from a previous holder thereof) issued by such public companies as may be approved by the Central Board of Revenue for the purposes of this clause;

(f)    such stocks and shares (other than stocks and shares acquired by purchase or otherwise from a previous holder thereof) of such a Pakistani industrial public company as may be approved by the Central Board of Revenue for the purposes of this clause.

Explanation. -As used in this clause, and sub-section (2) of section 43, "Pakistani industrial public company" means a public company within the meaning of clauses (a) and (b) of subparagraph (2) of paragraph B of Part IV of the First Schedule which is formed for the purpose of, or is actually engaged in, the carrying on of an industrial undertaking set up in Pakistan on or after the fourteenth day of August, 1947, provided such undertaking (i) is owned by such company and (ii) fulfills the conditions specified in clauses (a), (d) and (e) of sub-section (2) of section 48; and includes any public company engaged in, or formed for the purpose of, carrying on insurance or transport business or the business of building residential houses for sale in Pakistan or any business in the case of a Government sponsored finance corporation approved by the Central Board of Revenue or the Controller of Capital Issues for the purposes of this section ;

(g)    Modaraba Certificates (other than Certificates acquired by purchase or otherwise from a previous holder thereof) of a modaraba of specific value issued by a modaraba company;

(h)    Modaraba certificates of a modaraba of non-specific value issued by a modaraba company; and

(i)     Participation Term Certificates (other than Certificates acquired by purchase or otherwise from a previous holder thereof) issued by a company.

(1A) Notwithstanding anything contained in sub-section (1), the Central Board of Revenue may, in the case of any company applying for approval, grant approval under this section before the industrial undertaking for the purpose of which it is formed is set up or has commenced commercial production or may grant approval from such date, whether preceding or following the date on which the approval is granted, as it may specify in this behalf.

(3)   Where any certificate, security, share, debenture or debenture stock (hereinafter referred to as the 'Certificate') to which clauses (a), (b), (d), (e), (h) and (i) of sub-section (1) applies and in respect of which any relief in tax has been allowed to the assessee is disposed of by sale, transfer or in any other manner within thirty-six months of the date of its purchase, then, notwithstanding anything contained in this Ordinance, the amount of tax payable by the assessee under the other provisions of this Ordinance in respect of the income year in which such Certificate was so disposed of shall be increased by an amount equal to the relief in tax allowed to the assessee in respect of such Certificate (hereinafter referred to as the 'said amount'), and the sum so arrived at or, where no tax is payable by the assessee under the other provisions of this Ordinance in respect of that income year, the said amount shall be deemed to be the tax payable in respect of that income year and all the provisions of this Ordinance shall, so far as may be, apply accordingly.

(3A) Where a company has been approved for purposes of clause (f) of sub-section (1) on the basis of an undertaking given by such company to the effect that its shares shall be made subject of dealing in a registered stock exchange in Pakistan within the period specified in the said undertaking, and it is subsequently found that the said company has not complied with the terms of the said undertaking, the Central Board of Revenue may cancel the approval already given from the date it took effect, and the amount of tax payable by an assessee under the other provisions of this Ordinance in respect of the income year in which the approval was cancelled shall be increased by an amount equal to the relief in tax allowed to the assessee in respect of the purchase of stocks and shares of the said company, and the sum so arrived at or, where no tax is payable by the assessee under the other provisions of this Ordinance in respect of that income year, the said amount shall be deemed to be the tax payable in respect of that income year and all the provisions of this Ordinance shall, so far as may be, apply accordingly.

(4)   No order under sub-sections (3) and (3A) shall be made without giving the assessee a reasonable opportunity of being heard.

(5)   The Central Board of Revenue may make rules regulating the procedure for the grant of approval under this section and any other matter connected with, or incidental to, the operation of this section.