Withholding income tax rates on prize bonds

Withholding income tax rates on prize bonds

Federal Board of Revenue (FBR) has issued updated rates of withholding income tax on winning of prize bonds during fiscal year 2021-2022.

The withholding tax rates have been updated after incorporating changes made through Finance Act, 2021.

WITHHOLDING TAX CARD 2021-2022

The FBR collects withholding tax under Section 156 of the Income Tax Ordinance, 2001.

The withholding tax shall be collected from every person making payment on account of winning of prize on prize bond, cross word, raffle, lottery and quiz from recipient of prize or winning at the time of the prize or winnings are actually paid.

A tax rate of 15 per cent of the gross amount shall be collected on payments made for prize on prize bond and cross word. The rate shall be increased by 100 per cent if the person is not appearing on the Active Taxpayers List (ATL).

A tax rate at 20 per cent of the gross amount shall be collected on payments on winning from a raffle, lottery, prize on winning a quiz, prize, offered by companies for promotion of sale crosswords puzzles.

However, the tax rate shall be increased by 100 per cent i.e. 40 per cent if person is not appearing on the ATL.

The tax rate shall be final against tax liability of the person.

Leave a Reply

You have to agree to the comment policy.