FBR Announces 15% Holding Tax On Profits Of National Savings Schemes

The Federal Board of Revenue (FBR) has announced a 15% holding tax on the profits of National Savings Schemes (NSS).

According to the report, this tax rate will be effective from July 1, 2021.

A statement issued in this regard said that 15% would be applicable to those who are included in the list of Active Taxpayers (ATL).

On the other hand, for those who do not join the ATL, the tax rate is 30%.

Tax officials said the current withholding tax rate on national savings schemes is 10 per cent while filing income tax returns requires a 5 per cent tax return.

However, under the amendments made to the Income Tax Ordinance through the Finance Act 2021, the tax rate will now be 15% and it will not be necessary to file a tax return.

It is to be noted that the government has a high rate of interest on various savings schemes including Defense Savings Certificates, Welfare Savings Certificates, Regular Income Certificates, Special Savings Certificates, Pensioner Benefit Accounts, Martyrs Family Welfare Accounts and Short Term Savings Certificates.

It may be recalled that last month the rate of return on Martyrs Family Welfare Accounts and Pensioners Benefit Accounts was reduced from 11.52% to 11.04%.

Similarly, the profit paid on Welfare Savings Certificates was reduced from 11.52% to 11.28%.