Non-ATL taxpayers will face substantially higher withholding tax rates on bank deposits, government securities and Sukuk profit under the Tax Year 2027 framework.
(more…)Tag: profit on debt
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Tax rates on profit on debt notified for Tax Year 2027
Updated Income Tax Ordinance sets withholding tax rates on bank deposits, government securities and other debt income
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Non-filers to face 40% tax on bank deposit profit
Karachi, June 11, 2025 – The Finance Bill 2025 has introduced a major increase in income tax for individuals who are not on the Active Taxpayers List (ATL), targeting the profit they earn from bank deposits.
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Finance Bill 2025 imposes 20% tax rate on bank profit
Karachi, June 11, 2025 – In a move set to impact millions of savers and investors across the country, the government has proposed a notable increase in the tax rate on profit earned from bank deposits under the Finance Bill 2025.
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Tax Collection from Profit on Debt Surges by 103% Amid Soaring Interest Rates
Karachi, November 11, 2023 – The fiscal landscape of Pakistan has witnessed a remarkable surge, with tax collection from profit on debt skyrocketing by an impressive 103 percent, propelled by the prevailing high-interest rates, according to an official report.
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Tax Rates on Bank Deposits and Saving Schemes in Pakistan Revealed
Karachi, August 3, 2023 – The Federal Board of Revenue (FBR) in Pakistan has issued an official notification revealing the tax rates on bank deposits and national savings schemes under Section 151 of the Income Tax Ordinance, 2001.
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Expenditure against profit on debt allowed
Section 28 of Income Tax Ordinance, 2001 has allowed expenses to taxpayers against profit on debt to the extent used in business purpose.
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Tax on profit on debt under Section 7B
The Federal Board of Revenue (FBR) has introduced a pivotal addition to the Income Tax Ordinance, 2001, with the incorporation of Section 7B. This section specifically addresses the taxation of profit on debt derived by individuals or non-corporate entities.
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Profit from government securities to be taxed at 15%
ISLAMABAD: The Federal Board of Revenue (FBR) has said that interest income earned from investment in federal government securities will be taxed at the rate of 15 per cent under Final Tax Regime (FTR) with effect from July 01, 2021.
In an explanation to Finance Act, 2021, the FBR said that interest income earned by all taxpayers except banking and insurance companies from investment in federal government securities shall be taxed at the rate of 15 per cent under final tax regime. This has been provided in clause (20) of Part III of the second schedule on the Income Tax Ordinance, 2001.
The FBR said that the scope of separate block taxation on interest income has been reduced. Previously, interest income up to Rs 36 million in case of individuals and Association of Persons (AOPs) was chargeable to tax at the rates ranging from 15 per cent to 20 per cent under final tax regime.
By virtue of new amendments; the interest income up to Rs5 million shall be taxed at the rate of 15 per cent under final tax regime. If the interest income is more than Rs5 million, it shall be taxed under normal tax regime.
Uniform rate of withholding tax under section 151 of the Ordinance on interest income has been introduced at 15 per cent.
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Tax collection on profit from bank deposits increase to Rs54.55bn in July – March
KARACHI: Withholding income tax collection from profit on bank deposits registered 11 percent growth to Rs54.55 billion during first nine months (July – March) 2020/2021, sources said on Monday.
The collection of withholding tax from profit on bank deposits was Rs49 billion in the nine months of the last fiscal year, officials at Regional Tax Office (RTO) –I Karachi said.
The RTO-I Karachi, is a revenue collection arm of the Federal Board of Revenue (FBR), has mandate to collect the withholding tax on profit from debt on bank deposits under Section 151 of the Income Tax Ordinance, 2001.
The rate of tax to be deduction under section is 15 percent of the yield or profit. In case person is not on the Active Taxpayers List (ATL) the tax rate shall be increased by 100 percent.
The officials attributed the rise in tax collection to massive increase in bank deposits.
The bank deposits have reached to record high at Rs17.9 trillion by end of March 2021. The deposits of banking system increased by 18.38 percent as the total deposits were at Rs15.12 trillion by end March 2020.