Islamabad, August 20, 2025 – The Federal Board of Revenue (FBR) has officially issued the updated Withholding Tax Card for 2025-26, covering a wide range of income sources, including profit on debt under Section 151 of the Income Tax Ordinance, 2001.
The notification outlines different rates of withholding tax for taxpayers depending on whether they are listed on the Active Taxpayers List (ATL) or not.
The FBR highlighted that profit on debt is one of the most significant areas of taxation in Pakistan’s financial system, as it directly relates to returns from deposits, government securities, and sukuk investments. This mechanism is designed to bring greater compliance and ensure that those not on the ATL face higher rates of tax, thereby encouraging timely filing of returns.
According to the updated card, the withholding tax on profit on debt varies substantially. For example, yields or profit paid by banks and financial institutions on deposits are taxed at 20% for ATL filers, while non-filers face a much steeper 40%. Similarly, profit from government securities is also taxed at 20% for ATL individuals and 40% for non-filers.
The notification also details special provisions for sukuk investors. Companies holding sukuk will be taxed at 25% if they are on the ATL, but this jumps to 50% for non-filers. Individuals or Associations of Persons (AOPs) with sukuk returns exceeding Rs1 million face a rate of 12.5% for ATL status, and 25% otherwise. For smaller investors with sukuk returns under Rs1 million, the rate is 10% for filers and 20% for non-filers.
Below is a simplified breakdown of the updated rates on profit on debt:
| Category | Rate for ATL (%) | Rate for Non-ATL (%) |
| Profit on debt from banks/financial institutions | 20% | 40% |
| Profit on debt from government securities | 20% | 40% |
| Profit on debt in other cases | 15% | 30% |
| Profit on debt (sukuk) – when holder is a company | 25% | 50% |
| Profit on debt (sukuk) – individual/AOP with return > Rs1m | 12.5% | 25% |
| Profit on debt (sukuk) – individual/AOP with return < Rs1m | 10% | 20% |
The FBR emphasized that these measures are intended not only to strengthen documentation of the economy but also to ensure equitable taxation. By aligning profit on debt rates with taxpayer compliance, the government aims to discourage non-filers and boost revenue collection for fiscal year 2025-26.