Tax collection from prize bond winners grows 8% to Rs4 billion

Shahnawaz AkhterWeb Editor

26th Jul, 2021. 02:12 pm
Tax authorities

KARACHI: The income tax collection from the winners of the prize bonds grew 8 per cent to reach Rs4 billion during the fiscal year 2020/21, official sources said on Monday.

The sources at the Regional Tax Office (RTO) Karachi, a revenue collecting arm of the Federal Board of Revenue, said the income tax collection from the prize bonds increased to Rs4 billion in the fiscal year 2020/21, compared with Rs3.7 billion in the preceding fiscal year.

The FBR collects income tax on prizes and win money under Section 156 of the Income Tax Ordinance, 2001.

According to the statute, persons paying prize on a prize bond are required to deduct tax from the gross amount paid.

The rate of income tax is 15 per cent on the amount received from the prize bond winning amount. However, the rate would be doubled to 30 per cent in case the recipient of the prize is on the Active Taxpayers List, the sources said.

The tax deducted on the prize bond winning money is the final tax liability of the person.

The sources said the revenue under this head would increase in future, as the government had started documenting all the bearer prize bonds into premium.

In this regard, the documentation of prize bonds having denomination Rs7,500 and above has been started.

The prize bonds are an alternative way of government borrowing from the general public to meet its expenditures.

Adsence 300X250