Karachi, August 4, 2025 – The Federal Board of Revenue (FBR) has announced a major tax hike targeting non-filers, with a 100% increase in tax rates on profit earned from bank deposits, effective from tax year 2026 (July 1, 2025, to June 30, 2026).
According to Income Tax Circular No. 1 of 2025-26 issued by the FBR, the tax rate on profit from debt—earned through deposits in banking companies, financial institutions, and government securities (excluding individuals earning profit from government securities)—has been raised from 15% to 20%. However, tax rates on profit from National Saving Schemes, Post Office Savings Accounts, and similar instruments remain unchanged.
The FBR clarified that this revision aligns with amendments made to Division IA of Part III of the First Schedule of the Income Tax Ordinance, 2001. Previously, under the Tenth Schedule, non-filers were subject to a 35% tax rate on profit from debt. This specific entry has now been omitted.
Instead, a blanket policy now mandates a 100% higher tax rate for non-filers compared to standard rates. This means non-filers earning income from bank deposits or similar sources will now face significantly steeper deductions.
The FBR emphasized that this move is aimed at compelling non-filers to join the tax net and improve documentation of the economy. By increasing the financial burden on non-filers, the FBR hopes to drive higher compliance and revenue generation for the state.