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New withholding tax rates have been implemented on tax on prize bonds and profits from National Savings Schemes, sharply raising rates for non-filers to encourage tax compliance.
Under the revised framework, individuals listed on the Federal Board of Revenue’s Active Taxpayers List (ATL) will now pay a 15 percent tax on prize bonds winnings. In contrast, non-filers will see their tax rate doubled to 30 percent, highlighting the government’s push to widen the tax net.
This same structure also applies to profits on debt or loan interest under Section 151. Filers will be taxed at 15 percent on any interest or profit earned from loans, while non-filers will once again face a hefty 30 percent withholding tax.
Additionally, if profit on debt exceeds Rs5 million in a tax year, it will be treated as normal income and taxed according to standard business slab rates. Specifically, profits over Rs5.6 million will be taxed at 45 percent, while those below this threshold will face a 40 percent tax rate.
These updated measures around the tax on prize bonds and debt profits aim to ensure higher tax contributions from non-compliant individuals, while maintaining reduced rates for those actively filing their returns.
