ISLAMABAD: Persons deriving profit less than Rs500,000 on national saving schemes are required to provide a certificate in order to get reduced income tax rate at 10 percent, official sources said.
Officials at Central Directorate of National Savings (CDNS) said that at present the rate of income tax on profit from national savings scheme is 15 percent. However, the rate shall be 10 percent in case annual profit is up to Rs500,000 if a person receiving the profit provide a certificate that his return on saving schemes shall not be above the threshold.
They said that the rate of tax shall be 15 percent in case the annual profit is above 15 percent if the profit is above Rs500,000 in the said schemes. However, the rate at 15 percent is available only to persons on the Active Taxpayers List (ATL). In other case where person is not on the ATL the tax rate shall be 30 percent.
The sources said that the CDNS had circulated information about the amendments to the Income Tax Ordinance, 2001 through a letter issued early this fiscal year to all zonal heads and other concerned stakeholders.
Through Finance Act, 2020, an amendment introduced to Section 151 of Income Tax Ordinance, 2001 which related to profit on debt.
Section 151 (1)(a) explained that yield on profit (profit on debt) on account, deposit or a certificate under the National Saving Schemes or Post Office Savings Account, the rate of tax shall be 10 percent of the gross yield/profit paid on amount up to Rs500,000.
The rate of tax exceeding Rs500,000 shall be 15 percent of the gross yield / profit paid. The rate of tax on persons not appearing in the ATL, the applicable tax rate is be increased by 100 percent.
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