Prize bond winners in Pakistan face a withholding tax deduction of up to 30 percent on their winning amounts, according to government regulations, with the exact rate depending on whether the winner is a tax filer or non filer.
Under the rules, individuals listed on the Active Taxpayers List are required to pay 15 percent withholding tax on prize money, while non filers are subject to a 30 percent deduction.
The difference in tax rates can significantly affect the final amount a winner receives.
For example, a filer who wins the first prize of Rs3,000,000 on a Rs1,500 prize bond would have Rs450,000 deducted as tax, leaving a net amount of Rs2,550,000. A non filer winning the same prize would face a deduction of Rs900,000, receiving Rs2,100,000 after tax.
Prize bonds remain one of the most popular savings instruments among Pakistani citizens due to their combination of capital protection and profit potential.
The bonds guarantee the safety of the principal amount invested while offering holders the chance to win substantial cash prizes through draws held on a quarterly basis.
The interest free structure of prize bonds also makes them a preferred option for individuals seeking Sharia compliant savings and investment avenues, adding to their appeal as a secure and transparent financial instrument backed by the government.
