The government has introduced new withholding tax rates on prize bond winnings and earnings from debt or loan interest under National Savings Schemes, with much higher rates for those not listed as tax filers.
As per the updated policy, people whose names are included in the Federal Board of Revenue’s Active Taxpayers List (ATL) will now be charged 15 percent withholding tax on any prize bond winnings.
However, those who are not part of the tax network will have to pay 30 percent, double the rate applied to filers.
This same rule also applies to any profits earned from debt or interest on loans under Section 151. Tax filers will pay 15 percent on these earnings, while non-filers will again be taxed at a much higher 30 percent rate.
In cases where the profit on debt goes beyond Rs5 million in a year, the income will be taxed under regular business income slabs.
If this amount crosses Rs5.6 million, it will be taxed at 45 percent. For annual profits below Rs5.6 million, the applicable rate will be 40 percent.