Islamabad, August 25, 2025 – The Federal Board of Revenue (FBR) has announced updated withholding tax rates on prizes and winnings for the fiscal year 2025-26.
The revised rates were included in the Withholding Tax Card 2025 following amendments introduced through the Finance Act, 2025 to the Income Tax Ordinance, 2001.
According to FBR, withholding tax on prizes and winnings is collected under Section 156 of the Ordinance. Different rates apply to individuals on the Active Taxpayers List (ATL) and those who are not.
Applicable Rates for FY 2025-26
| Description | Tax Rate (ATL) | Tax Rate (Non-ATL) |
| Prize bond or crossword puzzle | 15% | 30% |
| Raffle, lottery, quiz, or sale promotion by a company | 20% | 40% |
Under Section 156, any person paying prizes on a prize bond or awarding winnings from raffles, lotteries, crossword puzzles, or promotional quizzes is required to deduct tax from the gross amount before payment.
Where a prize is not given in cash, the tax is collected based on the fair market value of the prize. Importantly, the tax deducted or collected under this section shall be treated as final tax on income derived from prizes or winnings.
FBR officials stated that these measures aim to streamline tax collection and bring greater transparency to cash and non-cash reward schemes.
The information contained in this article is based on official notifications and publicly available data from the Federal Board of Revenue (FBR). It is provided for general informational purposes only and should not be considered as professional tax advice. Individuals and businesses are advised to consult qualified tax professionals or refer to the official FBR publications for precise guidance on applicable tax laws and rates.